Wednesday, March 03, 2010

The Gold Price May Take a Break Here Since It Has Risen 5 Days Running

Gold Price Close Today : 1142.70
Change: 5.80 or 0.5%

Silver Price Close Today : 17.309
Change 26.5 cents or 3.6%

Platinum Price Close Today: 1578.00
Change: 5.50 or 0.3%

Palladium Price Close Today: 448.10
Change: 8.05 or 1.8%

Gold Silver Ratio Today: 66.02
Change: -0.686 or -1.0%

Dow Industrial: 10,396.76
Change: -9.22 or -0.1%

US Dollar Index: 80.01
Change: -0.52 or -0.6%

Yesterday the GOLD PRICE made a new all-time, since-the-creation-of-the-world high against the Euro, which appeareth to be an upside breakout from E830 with a E879.50 target.

Against the dollar today the gold price added $5.80 (after adding $19.60 yesterday). Comex closed at $1,142.70. Gold now stands at the gate of escape. Last intraday high was $1,161.80, last high close was $1,150.70, so through those portals gold must pass. May take a break here since it has risen 5 days running. To all the waiters and watchers roosting in the trees, gold sprinting past these gates will signal to follow along. Will gold pass the challenge? This week will tell us, and a fractured dollar saith we most likely will.

The SILVER PRICE gained another 26.5c today to end on Comex at $17.309. After 6 straight days ascending, silver may now rest a bit. However, now that silver has o'erleapt $16.80 resistance, the next barrier lies at $17.75. (Yes, those are big gaps between resistance levels.) The gold/silver ratio is dropping very rapidly, a loud hint silver is hitching up its breeches for a dash.

Gazing upon various silver price indicators yesterday left me split-minded. Longer term indicators imply silver must do more penance. Short term indicators say silver stands ready either to fall sharply or scramble much higher fast. Recall that the burden of proof has been resting on silver's shoulders since last fall it stopped short of a new high when gold made one. Silver's goals from here are $17.75, $18.75, and the last great high at $19.50. And silver had better make it pretty quick-smart, too.

The Dollar Index sank all day. Piercing 80.20, it plunged to 79.80, & now is trading down 51.6 basis points at 80.005. Little technical genius is needed to raise suspicion that breaking 80 will break morale, too, and chase the dollar lower. Looks more and more every day as if the $USD topped about 80.30 -- once 19 February and once 1 March. Now the dollar must close above 81.50 to gainsay that conclusion.

Bear in mind that my target for this dollar rally was 81.50, but I'll settle for the high we've already witnessed. Today the $ index punctured its 20 day moving average, first warning of trouble ahead.

Stock indices sang out of harmony today, some flat, some sharp. Dow stumbled at 10,400 and fell, but clings still to its uptrend and stands higher than its 20 DMA (10,240). Low today fell dead on the 50DMA at 10,370. Doubtful. Or, as my grandmother used to say, "Juberous." Right, I didn't understand, either, until I finally figured out she meant "dubious." She spoke a very pure dialect, uniimpaired by radio, TV, or public education.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

© 2009, The Moneychanger. May not be republished in any form, including electronically, without our express permission.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.