Tuesday, April 06, 2010

Gold Price Closed Barely Above its Downtrend Line (from the January and March tops)

Gold Price Close Today : 1135.10
Change: 2.20 or 0.2%

Silver Price Close Today : 17.917
Change -18.7 cents or -1.0%

Platinum Price Close Today: 1697.50
Change: -5.70 or -0.3%

Palladium Price Close Today: 505.20
Change: 3.10 or 0.6%

Gold Silver Ratio Today: 63.35
Change: 0.776 or 1.2%

Dow Industrial: 10,969.99
Change: -3.56 or -0.0%

US Dollar Index: 81.37
Change: 0.27 or 0.3%

Recall that I was alertly watching the Dow in Gold Dollars last week because it had reached the upper limit of the range, and threatened to climb over, proving that gold is no longer in a bull market and stocks are a good buy after all. Well, that didn't happen. DiG$ has been falling to below G$200 today, G$199.99 in fact (9.675 oz). This shouts that Gold's winter has passed, and stocks', notwithstanding the time of year, have entered their winter.

Amongst the metals, this was one of those dreaded days where the market blew hot and cold out of both sides of its mouth: The GOLD PRICE rose and silver fell. Confusion. Bewilderment. After a strong day on Monday (up $7.80), gold climbed again today by $2.20 to $1,135.10 at Comex close. Backing away for a longer term view, this $1,135 baffled and stymied gold in March. Yet technically by a couple of bucks gold closed barely above its downtrend line(from the January and March tops). This is an upside breakout from an even-sided triangle, but gold must confirm that with a higher close tomorrow. RSI and MACD leave plenty or room for gold to climb higher. Are y'all really surprised gold would meet heavy resistance here? Shouldn't be. Manipulated or not, it's an obvious obstacle on the chart.

The SILVER PRICE tried to break through $18.10 yesterday and today, but was thrown back. Comex closed today at $17.917, down 18.7c. Yet how ever you look at the chart, the silver price has broken out above its downtrend line from the December and January highs. This remains true as long as silver remains above $17.60. The silver price must not break $17.80. The rule of thumb says, "A trend in force remains in force until violated." Therefore, unless the silver price closed below $17.60 or the gold price below $1,130, the uptrend remains in force.

US DOLLAR INDEX bottomed last week on Thursday at 80.70 and Friday jumped to 81.30. Wonder who was trading on Good Firday? Yesterday Monday) the scrofulous Samoleon traded sideways to lower from 81.30 to 81.90. Early in the morning Tuesday (New York time) the dollar started climbing at a high at 81.64 today. Then it backed off to is present 81.368, up 27.4 bps. Whither the dollar? My best guess is that the dollar in a corrective downtrend that began eight days ago at 82.24 intraday high. It dropped to hit the 20 day moving average (80.79). What you are seeing now is the bounce off that 20 DMA, preparatory to another fall. Target for this move is still 79.50 to 79. A close above 82.24 would change my mind.

Stocks indices today were strangely mixed. The Dow made a new 52 week high but closed down 3.56 at 10,969.99. S&P, on the other hand, rose 2 points to 1,189.44. What in the world does that say? Five day chart shows the Dow wrestling with 10,990 and being thrown. Is this a top or a continuation? Dow may yet reach 11,100 but the presidential cycle is bearing down on it like an 18 wheeler on a reckless armadillo, namely, fast, as April passes away.

I hope y'all had an Easter celebration as wonderful as ours was here. On top of everything else the weather was picture-perfect and the entire congregation sang parts in perfect harmony. For the feast my daughter Liberty prepared roast lamb crusted with parsely, garlic, sea salt, lemon juice, mustard & olive oil. As food goes, this lamb was heaven.

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.