Wednesday, March 24, 2010

Right Here is Where The Gold Price Will Test Your Betting Blood

Gold Price Close Today : 1088.60
Change: -14.90 or -1.4%

Silver Price Close Today : 16.626
Change -38.6 cents or 0.5%

Platinum Price Close Today: 1578.60
Change: -28.10 or -1.7%

Palladium Price Close Today: 443.65
Change: -20.85 or -4.5%

Gold Silver Ratio Today: 65.48
Change: 0.610 or 0.9%

Dow Industrial: 10,836.15
Change: -52.68 or -0.5%

US Dollar Index: 81.97
Change: 1.07 or 1.3%

Well, right here is where the GOLD PRICE will test your betting blood. If gold has been forming an upside-down head and shoulder since December, then today should have formed the bottom of the right shoulder and the gold price is readying back for another crack at $1,132. If gold is not forming that upside-down H&S, then it will drop lower, testing $1,050 and even $970.

Today on Comex gold closed at $1,088.60, down $14.90.

Me, I would not be shorting this market and in fact would be buying.

Silver likewise could be interpreted over a range from terrifying to hopeful. The SILVER PRICE closed slightly below its 50 day moving average ($16.75) and 20 DMA ($17.02), a bad omen. On the other hand, the silver price is famous for crashing it uptrend then turning around and dashing. Two days before the last rally began (late February) silver dropped below its 20 DMA and 200 DMA.

The silver price won't keep us waiting long for a decision. 'Twill either drop sharply tomorrow or hold about here. Anything other than a sharp drop is positive and will show more positive results in a few days. The silver price closed down 38.6c at $16.626. Low was $16.51.

Interesting that I received two e-mails today castigating me because silver and gold prices weren't rising. When people throw in the towel that way it
often points to a bottom.

The dollar fooled me completely yesterday. Instead of falling overboard, it completed its little correction and rose massively today. It may sound crazy to say this now, but today probably posted a short term top for the Dollar. Not to say it might not climb more later, but after jumping up a weighty 107.4 basis points today to 81.97, it's hard to picture that folks with big profits won't rake some off the table, precipitating at least a small correction.

Try as it might the Dow couldn’t burst through 10,880 today, and as the day wore on it just kept eroding. Lost 52.68 points to close at 10,836.15, while S&P500 fell 6.45 to 1,167.72.

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.