Thursday, March 25, 2010

USD Dollar Will Sag Soon, and When It Does Silver and Gold Prices Will Come Roaring Back.

Gold Price Close Today : 1092.70
Change: 4.10 or 0.4%

Silver Price Close Today : 16.727
Change 10.1 cents or 0.6%

Platinum Price Close Today: 1608.00
Change: 29.40 or 1.9%

Palladium Price Close Today: 450.05
Change: 6.40 or 1.4%

Gold Silver Ratio Today: 65.33
Change: -0.150 or -0.2%

Dow Industrial: 10,841.21
Change: 5.06 or 0.0%

US Dollar Index: 82.18
Change: 0.34 or 0.4%

All right, GOLD and SILVER PRICES didn't blast off today, but they sparkled, and that's all they needed to do.

The GOLD PRICE today rose $4.10 to close on Comex at $1,092.70. That's no colossal rally, but gold didn't need that. It only needed to show itself able to hold on above $1,085. It can bump along there for a few days, as long as it doesn't close below $1,085. Holding the line here tends to prove that the upside-down head and shoulders I am seeing really is there. This looks more and more like a buying opportunity. Number for gold to beat tomorrow is $1,095, where all the selling took place today.

The SILVER PRICE clung to $16.52 support today, but couldn't climb over $16.80 resistance. Closed on Comex up 10.1c at $16.727. In a fight like this, crossing that lower line brings a brutal tumble, but silver seems to be holding its own. One thing is sure: lower prices have bought buyers back into the market with enthusiasm and deep pockets.

Don't get short metals here, i.e., do not sell. Buy some, but don't sell. That dollar will sag soon, and when it does silver and gold will come roaring back.

US DOLLAR INDEX poked its head up today again, climbing a large 34.2 basis points to stop at 82.18. Dollar is approaching at least a short term top, but might sprint to 83 before it ends. Uptrend still in progress.

Someone wrote to ask me today what was keeping the US dollar up? Two things. First, the Federal Reserve has been slowing the rate of money growth, so that means fewer dollars sloshing around the world. Not that they've stopped inflating, they're just inflating more slowly. Second, the Euro has been under fire because it appears that the EU will have to bail out Greece or Portugal, or Greece and Portugal and Ireland and Spain and maybe Grand Tortugas as well, which would mean they will print more Euros and debase them. So the dollar is doing well for the same reason a poor man at a car lot buys a clunker: better some ride than none at all.

All stock indices except the Dow Jones Industrial Average dropped today. DJIA rose 5.06 to 10,841.21, but after rising to new high ground -- not quite a key reversal, but a stinking performance anyway. S&P dropped 1.99 to 1,165.73. Dow in Gold Dollars has reached G$205.36 (9.934 oz) and is trying to punch through all that resistance above it. It must be near its maximum for this move.

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.