Friday, April 30, 2010

The Gold Price Has Broken Out Into a New Rally

Gold Price Close Today :1,180.10
Gold Price Close 22nd April: 1,142.30
Change: 37.80 or 3.3%

Silver Price Close Today : 18.611
Silver Price Close 22nd of April: 18.006
Change 60.50 cents or 3.4%

Platinum Price Close Today: 1,739.40
Platinum Price Close 22nd of April: 1,743.00
Change: 52.70 or 3.1%

Palladium Price Close Today: 551.55
Palladium Price Close 22nd of April: 565.50
Change: -13.95 or -2.5%

Gold Silver Ratio Today: 63.41
Gold Silver Ratio 22nd of April: 63.44
Change: -0.03 or -0.0%

Dow Industrial: 11,008.61
Dow Industrial 22nd of April: 11,134.29
Change: -125.68 or -1.1%

US Dollar Index: 81.896
US Dollar Index 22nd of April: 81.573
Change: 0.32 or 0.4%

Let's look at the week: who gained, who lost? The US dollar index probably peaked for a while this week, but showed a 32 basis point gain in spite of its weakness late in the week. Stocks fell significantly, turned back by unconquerable resistance and their own improbability. Platinum and palladium had their sails lightly trimmed, while SILVER and GOLD PRICES leapt more than 3%, proving they have begun a new rally.

Yesterday I wrote, "What would comfort my wearied apprehension? The GOLD PRICE smashing definitively through $1,170, silver topping $18.80, and the Gold/Silver ratio dropping through 62:1. That would erase all the ambiguity."

Today silver and gold met most of my requirements. The gold price rose $11.70 to close on Comex at $1,180.10. The SILVER PRICE rose 6.2c to close at $18.611, besting the last big high, although not $18.80. That will come Monday. Finally, the gold/silver ratio edged closer to 62:1, but remains 1.4 points above. Not everything, but a lot.

The gold price has broken out into a new rally. Clearly it is meeting lots of disbelieving sellers as it rises. Don't join them, because the gold price is headed much higher in May: much higher. Beneath them, the gold price must hold $1,160 and the silver price $18.50. As long as they hang on there, they're all right. This rally should raise the gold price to $1,300 or higher and the silver price to a new high above $20.68.

Buy the breakouts. Of course, you don't have to. You can wait to buy until the gold price reaches $1,300 and the silver price reaches $25.00.

The US dollar index made a higher high this week, but last three days has been struggling to remain afloat, and today sank beneath the waves at 82. Right now it's trading down 10.7 bps at 81.896. "Below 82" breaks the magic, and the morale. This week the dollar tried to break through 82 and even reached 82.71 intraday, then failed shamefully. Now it's only 65 bps above its 20 day moving average, but also remains above its 200 week moving average. Next week looks tough for the dollar and it may visit 78 before it visits 88.

This week the Dow on Monday made a new high close for the move at 11,205.03. Sounds great, huh? But . . . Next day it sank 213 points, rose 53 on Wednesday, rose another 122 yesterday, then vomited up nearly all that gain today with a 158.71 point fall to 11,008.61. S&P fared worse, losing 20.09 to close at 1,186.69.

Sorry, I must say it: Dow's five day chart looks most emphatically double-toppy. The Bridge over the River Plunge now stands at 11,000, and once the Dow breaks that the rats will begin running for the jungle. I believe y'all have seen the top in stocks for the rally that began in March 2009. As I have begged you all before I now beg again, for your own sakes, for your families' sakes, get out of stocks.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

© 2010, 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.