Monday, April 26, 2010

The Gold Price is Far More Likely to Rise From Here

Gold Price Close Today : 1153.50
Change: 0.40 or 0.0%

Silver Price Close Today : 18.337
Change 14.5 cents or 0.8%

Platinum Price Close Today: 1746.10
Change: 8.10 or 0.5%

Palladium Price Close Today: 567.25
Change: 5.75 or 1.0%

Gold Silver Ratio Today: 62.91
Change: -0.479 or -0.8%

Dow Industrial: 11,205.03
Change: 0.75 or 0.0%

US Dollar Index: 81.23
Change: 0.17 or 0.2%

The GOLD PRICE on Comex rose 40 cents to close at $1,153.50 and is trading now at $1,154.10. Friday's $10.80 jump lifted gold to $1,160 resistance again. 'Twas a strange chart, Friday's. The gold price broke $1,142.50 and levitated straight up like Captain Kirk heading for the Enterprise. Today's high was $1,158.80 but gold spent most of its day trading sideways. Must not break $1,140.

Sorry, I don't like double closes. Although in the past couple of months half of them have led to higher prices and half to lower, they still make me nervous. Nonetheless the gold price is far more likely to rise from here. That's almost a given. All indicators and moving averages support higher gold prices, but there's a certain want of enthusiasm that keeps buzzing at my attention like some annoying fat blue bottle fly. A close above $1,160 will cure my uneasiness.

Since February the SILVER PRICE has been climbing in regular stair steps -- bold, strong pattern. Today it rose 14.5c to close at $18.337 on Comex, and now is trading at $18.32, but the same discrepancy appears in silver that I alluded to above in gold.

Silver's big roadblock is $18.60, and above that the December high at $18.89. The silver price must stay above 18.10. Trend in force is up, so the silver price ought to keep climbing tomorrow.

What a photo op for stocks! Almost every other index closed down, but the Dow closes up . . . 0.75. No, that's not a typo. The Dow climbed as high as 11,258.01, but couldn't digest that extra 53 points.

Stocks are as overbought as California real estate, as overhyped as Gulf Coast condos. Stocks have risen the last eight weeks running, not to mention eight out of the last eleven weeks. The RSI looks like January 2000 and the MACD has frozen at permanently overbought. Have stocks repealed gravity, with the help of the NGM? Don't bet on it. Can't go on forever, just stay out and be patient. When the wailing and weeping begins, you will not be among the mourners.

Whoa. That US Dollar index rally not only failed to break out on Friday at 82, but also made the first half of a key reversal, namely, rising to a new high for the move only to close lower the same day. Today the Samolean painted the second half of that key reversal with a second day's lower close. Right now the dollar is trading at 81.23, down 17.3 basis points. Wait, wait, behold! the Dollar has also drawn a double top just above 82. Tomorrow the dollar should follow through by closing below its 20 day moving average (now 81.06). Once it opens that trap door at 81 it will slid to 80 fast as a roach skitters away when you flip on the kitchen light.

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.