Wednesday, April 28, 2010

The Gold Price has Broken Through $1160

Gold Price Close Today : 1171.30
Change: 9.60 or 0.8%

Silver Price Close Today : 18.107
Change -1.2 cents or -0.1%

Platinum Price Close Today: 1706.90
Change: -10.70 or -0.6%

Palladium Price Close Today: 539.60
Change: -11.40 or -2.1%

Gold Silver Ratio Today: 64.69
Change: 0.573 or 0.9%

Dow Industrial: 11,045.27
Change: -213.04 or -1.9%

US Dollar Index: 82.33
Change: 0.18 or 0.2%

One reader asked me to comment on the congressional Goldman-Sachs hearings. Okay, here's my comment: theater, pure theater. Standard cover-up procedure. A bunch of senators who know nothing about a very complicated business appear to ask piercing questions to arrogant Goldman Sachs traders and executives. Did you know the mortgage market would tank? Huh? Us? Why, why, we were just selling what people wanted. Meanwhile they have GS interoffice emails smirking about what doomed trash these CDOs were.

But watch the walnut with the pea under it! This is merely theater to build momentum to pass (what my friend Al Thomas calls) the Financial Deform bill, 1200 pages nobody will read. They will only discover later that it was loaded with treats and goodies that benefit whom? The Goldman Sachs of the world.

Get this straight, folks: the Wall Street establishment owns and runs the US government for its own benefit. Any idea that the US government answers to taxpayers and voters expired 150 years ago.

Oh, what a stinky day! Something just doesn't smell right here. I don't know if it's a financial catastrophe lurking around the corner or merely the Nice Government Men up to their usual tricks, but it all just doesn't quite meld.

Main chance says the US dollar index has broken out to the upside. Right now its trading at 82.327, up 18.1 basis points. However, this is one of those not-yet-clear situations, so dollar could be faking us all out preparatory to plummeting to the center of the earth. But the main chances says it will rise higher.

Dow Jones Industrial Average today rose 53.28 to 11,045.27 (wink! Wink!). S&P skittered up the ladder 7.65 points to 1,191.36. Nasdaq Comp & other indices were flat. While it's always possible stocks might raise their head one last time, it's doubtful. Down is the trajectory, down, down, down.

Heard something titillating from a wholesaler friend who does a lot of business in Europe. Seems that the Greek crisis, which I providentially misspelled as "Greed" yesterday, is driving European investors out of the Euro (rhymes with "burro") and into gold. Thus European wholesalers have no gold coins to send to the US. That hasn't yet raised premiums on gold coins, but if it keeps up it will.

This day's trading in gold leaves the mind in a quandary. It rose $9.60 to close on Comex at $1,171.30, but now in the aftermarket is trading $1,165.90. Chart has a sort of choppy corrective look the last two days. Still, gold has broken through $1,160 resistance and marched ahead, so it certainly ought to keep climbing. But why today's weakness? Natural, or induced by the NGM who don't want to see gold shooting out of sight in a brewing crisis? Who can tell any more? Might be the market's stomach churning over some crisis foreseen.

The SILVER PRICE performed poorly today, not counting its heroic defense of 17.80 again. Reminds me of somebody in a swimming pool trying to hold a basketball underwater. Wait! Don't say it, don't say it! No, can't help it: looks like some NGM might be selling off silver trying to scare people out of gold. (I hate it when my lips do that, just take off and speak without asking me.)

Staying above 18.00 after being driven to 17.80 on Friday and today in fact is strong, and probably completes the correction from Friday's high. Of course, if silver closed lower than 17.80, that would gainsay my interpretation, but as long as it stays above 18.00 'twill be all right. If gold takes off, silver will not lag far behind. What worries me most is that silver's high Friday was lower than the 18.60 high on 12 April, while gold's analogous high was higher. This needs to be cured quickly, or it will cause trouble.

On this day in 1881 escaped from the jail in Lincoln County, New Mexico Billy the Kid, killing two deputies on guard. On 14 July he was ambushed and killed by Sheriff Pat Garrett.

On this day in 1770 Captain James Cook in Endeavour landed at Botany Bay in Australia. His men celebrated by throwing another kangaroo on the barbie. Cook was the first European to reach Australia's eastern coast.

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.