Monday, March 15, 2010

If it Were Moving Lower, the Gold Price Would Have Broken Today

Gold Price Close Today : 1105.20
Change: 3.70 or 0.3%

Silver Price Close Today : 17.040
Change 1.6 cents or 0.1%

Platinum Price Close Today: 1613.90
Change: 7.40 or 0.5%

Palladium Price Close Today: 459.65
Change: -2.60 or -0.6%

Gold Silver Ratio Today: 64.86
Change: 0.156 or 0.2%

Dow Industrial: 10,642.15
Change: 17.46 or 0.2%

US Dollar Index: 80.23
Change: 0.40 or 0.5%

Well, I've been thinking about this silver and gold business, and my opinion is rolling over. Thursday and Friday gold took a whipping, but it didn't break. Oh, the sellers backed gold all the way to $1,100 and a hair beyond, but it never closed down there. If it were moving lower, the gold price would have broken today. Yet hark! It hath not broken, neither hath it budged, but rather hath it risen. At Comex the gold price today rose $3.70 to $1,105.20. In the aftermarket the gold price is trading around $1,108.

Now what have we on gold's chart? A series of higher, i.e., rising, lows ($1,044.80, $1,085, $1,098.80) and higher highs -- the definition of an uptrend.

The dollar has also nearly completed an upside-down head and shoulders formation that generally pours a foundation for a rally. Only a close below $1,100 could contradict that. If the gold price clears that neckline at $1,140 it will run like a scalded dog.

The silver price snoozed most of the day, with a range from 17.14 to 16.94, and a Comex close at 17.04 (up 1.6c). Silver is not rising fast, but has continued to crawl up off Thursday's 16.80 low. Mark that silver has kept in step with gold, as the gold/silver ratio shows. Silver will move up with gold, but as with gold it must not fall back below this 17.00 area.

I am watching our cagiest customers coming in to buy. What does that say to y'all? Res ipsa loquitur.

US Dollar index made a temporary bottom on Friday, and is correcting against the down trend that has been ruling the past two weeks. Today 80.40 contained it, and it is trading now at 80.227, up 40 basis points. No wonder, considering how much trouble all the other scrofulous fiat currencies are wallowing in, but that doesn't make the dollar sound, it just makes it the least scrofulous in a crowd of scabby currencies. Some distinction. The dollar has rolled over into at least an interim correction, if not steered its trend down. A break below 78.50 would confirm a trend change, a close above 81.50 would shift gears the other direction.

While the Dow Industrials rose 17.46 today to close 10,642.15 and the S&P500 rose an infinitesimal 0.52 to $1,150.51, all the other stock indices dropped today. Nawww, that's not really good news for Wall Street and the Brothels of Brokerage. Confusion and bewilderment too often prove to be a plunge in the making. Keep on staying out of stocks.

Yes, yes, it is the Ides of March, upon which in 44 BC the Roman general and would be tyrant Julius Caesar died at the hands of a group of conspirators who thought a chance remained to save the Roman republic. Rather, they hastened its demise and their own. They simply struck too late. Dead republics cannot be successfully resuscitated.

On this date in 1820 Maine became the 23rd state, having seceded from Massachusetts. Whoa! Wait. I used the S-word. Whoa, y'all keep my secret and don't breathe the S-word to our imperial masters on the Potomac. They might draw the wrong conclusion and start thinking my name is Brutus.

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.