Wednesday, April 07, 2010

The Rally Remains On Track as Long as the Gold Price Stays Perched Above $1,130

Gold Price Close Today : 1152.30
Change: 17.20 or 1.5%

Silver Price Close Today : 18.185
Change 26.8 cents or 1.5%

Platinum Price Close Today: 1705.50
Change: 8.00 or 0.5%

Palladium Price Close Today: 507.90
Change: 2.70 or 0.5%

Gold Silver Ratio Today: 63.37
Change: 0.012 or 0.0%

Dow Industrial: 10,897.52
Change: -72.47 or -0.7%

US Dollar Index: 81.59
Change: 0.20 or 0.2%

Did y'all notice that a higher dollar today slowed down SILVER and GOLD PRICES not a whit?

The GOLD PRICE burst the chains of $1140 resistance and ran up to $1,153.13. Closed on Comex up $17.20 at $1,152.30, proving that that tee-tiny breakout yesterday was genuine, indeed. Yet the gold price stalled just above $1,150. That looks great because it lies above the March intraday high at $1,144.80, but the gold price needeth yet to beat January's $1,161.80. The gold price has risen 5 days running, so it may take a breather the next few days. Never mind, the rally remains on track as long as gold stays perched above $1,130.

The SILVER PRICE breached $18.10 without even slowing down and climbed to $18.23 before closing on Comex up 26.8c at $18.185. Since 22 March the silver price has climbed from $16.70 to $18.25. It could also use a rest, but on the other hand very little resistance opposes silver between here and $18.90.

Today the Dow answered my question of yesterday -- was it topping or consolidating -- by plunging 72.57 to close at 10,897.52. (S&P dropped 6.99 to 1,182.45). 'Twould be a bit odd if the Dow bounced back from this. It has dropped down out of a long rising wedge, itself a very bearish formation. Let's see how the Dow handles its 20 day moving average, now at 10,801 tomorrow. Falling through that would signal lower prices as the next course served. RSI and MACD are so overbought and overdue for correction they make my nose bleed just looking at them. We probably have seen the peak in stocks -- not certain yet, but strong suspicion.

US DOLLAR INDEX may have run out of gas today. It rose 20 basis points to 81.587, about the top of the last 7 days' trading range. Sure, there's a chance it may climb to re-visit 82.24 and post a flashing double top, but probably not. Still, close above 82.24 would re-open the dollar rally.

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.