Tuesday, April 20, 2010

The Gold Price Now Needs to Top $1,146

Gold Price Close Today : 1138.60
Change: 3.40 or 0.3%

Silver Price Close Today : 17.815
Change 9.0 cents or 0.5%

Platinum Price Close Today: 1714.00
Change: 19.00 or 1.1%

Palladium Price Close Today: 551.90
Change: 17.20 or 3.2%

Gold Silver Ratio Today: 63.91
Change: -0.133 or -0.2%

Dow Industrial: 11,117.29
Change: 25.24 or 0.2%

US Dollar Index: 81.03
Change: 0.09 or 0.1%

The SILVER PRICE advanced today 9c on Comex to close at $17.855. $18.00 stopped its advance, no surprise that. Tomorrow it needs to hold $17.80 and burst through $18.00, but that may take another day. A close below $17.50 turns the outlook down. The silver price remains within an uptrend.

Early in the day the GOLD PRICE tried to scale the parapet at $1,146 but bailed and fell back as low as $1,135.40. On Comex it closed $3.40 higher at $1,138.60 and now is trading at $1,140.90. If tomorrow the gold price holds $1,130, then today's slackness is only resting and part of the penance for that big collapse on Friday. For credibility, the gold price now needs to top $1,146, and one way or the other must keep working on that target.

But, as economists are fond of saying, on the other hand today and yesterday might have been mere dead cat bounces, although I doubt that. Tomorrow will make that plain.

Ogling the 5-day Dow chart I face a great movement -- in a circle. From Friday's 11,150 to Friday's 10,970 to skips to a double bottom at 10,980 on Monday, then yesterday and today floats once again to 11,140, closing today at 11,117.24, adding 25.24 (S&P500 augmented 9.66 to 1,207.18).

Now if you drove your big Mercedes round and round in great circles, what at last would happen? You would run out of gas. So, too, will stocks. No definitive sign of a top yet, but that it draweth night is obvious from this slowing and struggling.

Today climbed the US DOLLAR INDEX above 81, yea, even unto 81.28, but was not quite stout enough to clutch gains that large, so lapsed back to 81.033, higher by a mere 8.8 basis points. Today's high barely reached the downtrend line, yet curb thine arrogance! The Dollar might already three days ago have seen completion of its correction from 82.24, the March high. Thus the dollar stands wavering at a crossroad: will it now resume rallying, or will it turn down to enter an even longer correction or even a trend change in cooperation with gravity? Remember that last week the dollar fell outside and below its uptrend line ("violated" it) so now must clamber above 81.75 to sneak back into the window of that uptrend channel. Short term downtrend remains in force till that happens.

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.