Wednesday, June 30, 2010

Gold Price is Range Bounded, When One Side or the Other Weakens 'twill Spring a Long Way

Gold Price Close Today : 1243.50
Change: 3.80 or 0.3%

Silver Price Close Today : 18.594
Change 7.7 cents or 0.4%

Platinum Price Close Today: 1537.30
Change: -4.20 or -0.3%

Palladium Price Close Today: 445.75
Change: -6.25 or -1.4%

Gold Silver Ratio Today: 66.78
Change: -0.089 or -0.1%

Dow Industrial: 9,774.02
Change: -96.28 or -1.0%

US Dollar Index: 86.06
Change: -0.07 or -0.1%

Both gold and silver prices rose today, but modestly. Silver rose 7.7c to 18.62 while gold augmented $3.50 to $1,243.50, basis Comex close. Both are trading about unchanged in the aftermarket. Gold has drawn a V-bottom at about $1,225, then steadily risen, building a $1,235 floor. Still, it looks like a boring seismograph, oscillating here and yon to little change or purpose. 'Tis a market in tension, with beefy forces pushing from above and below. When it breaks at last, when one side or the other weakens, 'twill sprint a long way. Range bounded by $1,225 ($1,230) and $1,245 ($1,240). Y'all already know which way I expect it to break.

Like gold, silver has established a range but it's still unclear whether it is tracing out a continuation or reversal pattern in the range 18.35 - 18.75. What silver needs is to clear 19.00. Must hold 18.20.

Stockholders by now must be screaming for mercy. Dow has fallen 519,13 in the last five trading days. Oh, what a melancholy & lachrymose picture the Dow's chart drew today, as of a dying man trying one last feverish time to raise his head from the pillow, again and again in vain, and at last falling plumb off the bed and down the stairs. Dow is falling stair step fashion, a plunge with heavy momentum propelling it. Bear market rally is always possible, but don't expect one tomorrow.

Al Thomas of is talking about the coming Death Cross in stocks, when the 50 day moving average drops below the 200 DMA. As they used to say in the Tarzan movies: "Bad juju." The 5-day dollar index chart clearly shows a
double top yesterday about 86.25. Today the Samolean fell sharply from an 86.13 open to an 85.60 low, made a V-bottom there and treaded back to 86.064 now, 6.7 basis points lower than this time yesterday. For the short term the dollar's little rally-ette to 86.20 has topped and failed, yet a greater question looms: can the dollar keep floating above 85? Watch that level, & the 50 DMA (now 85.34) for a Titanic move if broken.

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.