Tuesday, March 09, 2010

The Gold Price Might Have Drawn a Spike Bottom Low Today at $1,108.60

Gold Price Close Today : $1122.00
Change: -1.60 or -0.1%

Silver Price Close Today : 17.318
Change 6.6 cents or 0.4%

Platinum Price Close Today: 1588.60
Change: -8.40 or -0.5%

Palladium Price Close Today: 466.15
Change: -3.85 or -0.8%

Gold Silver Ratio Today: 64.79
Change: -0.341 or -0.5%

Dow Industrial: 10,568.39
Change: 15.87 or 0.2%

US Dollar Index: 80.57
Change: 0.14 or 0.2%

This frustrating up and down, deceiving at every turn, threatening to shoot but never quite dropping the hammer: this is what everyone loves about markets in a trading range. They break out, they break down, they break up, but then never follow through.

The GOLD PRICE might have drawn a spike bottom low today at $1,108.60. It closed at $1,122 on Comex, down $1.60, but now is trading at $1,121.25. Clear resistance shows at $1,125, support at $1,108 and $1,100. Gold's 20 day moving average today reads $1,111.80, so gold must stay above that level to fight a breakdown.

It's a trading range market. Buy near the bottom of the range on declines.

SILVER hath shown itself stronger than gold lately, as seen in the Gold/Silver Ratio dropping today to 64.79. Comex closed silver today higher by 6.6c at 17.318, while gold declined $1.60. That mirrors the confusion and indecision in the market. Look at a six month chart. Silver turned up after trading on 4 February at an intraday low of 14.68, and it is trading over its 200, 20, and 50 DMA.

All of that is contained within a wider trading range bound by 14.50 and 19.50. Trading in that range is all noise until silver closes above 19.50. Yet we can make the most out of an irritating situation by accumulating silver toward the low side of that range. Silver is still trending up.

My opinion remains that we have already seen the lows in both gold and silver. The US DOLLAR INDEX has rolled over on its back, & like the fish that does the same, will sink. As long as it holds over 78 it will remain in an uptrend. Any close above 81.30 brings higher prices, below 79.60 lower. Till then, all the up and down is merely noise.

STOCKS today nosed above Dow 10,600 to 10,612, but couldn't make good the gain. By day's end stocks had surrendered most of their gains. Dow stopped at 10,568.39, adding a grandiloquent 15.87. S&P 500 ended at 1,140.28, up a loud 1.78. A turning point is due this month or next. Those who buy stocks will be as disappointed as those who trusted Bernie Madoff or Charles Ponzi.

Sorry I missed sending y'all a commentary
yesterday, but I had to take Susan to her appointment with her cardiologist, and we arrived home too late. She had an echocardiogram but we haven't talked to the doctor about the results yet. She may need a pacemaker, which she desires as a Jersey cow longs for big screen TV. Thank you for your prayers, and please don't stop.

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.