Thursday, June 24, 2010

If the Gold Price Fails to Advance Tomorrow or Monday Above $1245, it Will be Forced to March in Place a While

Gold Price Close Today : 1245.50
Change: 11.40 or 0.9%

Silver Price Close Today : 18.731
Change 27.7 cents or 1.5%

Platinum Price Close Today: 1567.30
Change: -2.70 or -0.2%

Palladium Price Close Today: 476.50
Change: 3.30 or 0.7%

Gold Silver Ratio Today: 66.49
Change: -0.380 or -0.6%

Dow Industrial: 10,152.80
Change: -145.64 or -0.8%

US Dollar Index: 85.77
Change: 0.03 or 0.0%

Options expiry didn't work out very smoothly for the manipulating crown. The GOLD PRICE rose from its $1,237.80 open to a $1,248.35 high, then hovered around $1,245 rest of the day. Comex closed up $11.40 at $1,245.50. Ending the day above $1,240 was great success for gold. Yet the five day chart still looks rangebound by $1,225 - $1,240. If the gold price fails to advance tomorrow or Monday above $1245, it will be forced to march in place a while.

The SILVER PRICE was driven down (passive voice obscures the actor) as low as 18.17 overnight but popped up from the opening to 18.80 and closed Comex up 27.7c at 18.731. Range now established is narrow, 18.35 to 18.80. The big hurdle above silver is 19.00. If it doesn't break out in the next few days, it will be doomed to tread water till August.

Yesterday the Federal Open Market Committee, the commissars charged with alternately strangling the economy and making it smoke crack, met and whined and moaned and didn't touch interest rates. They are prisoners of their own Keynesian orthodoxy and their own manipulation. Now they can do no other than keep interest rates low, because raising them risks a catastrophe. Wonder if they have a saddle for that tiger?

You have to wonder how a great nation, filled with practical, energetic, and fairly intelligent people, was ever made the slave of such a moronic system as the Federal Reserve and government control of the economy. There was a big hole somewhere, in education or understanding or character.

The US DOLLAR INDEX failed yesterday at 86.40 and ran off like a whipped puppy to hide beneath 86. It is now trading at 85.76, up 2.5 basis points. Three days ago the dollar index bounced off 85. In the next few days it ought to rise as part of an Up-Down-Up correction. Therefore don't let a dollar rally in the next few days steam your glasses, because another down leg lieth ahead.

STOCKS continue painfully to decay. Today the Dow closed at 10,152.80, down 145.64. That is below the 20 day moving average (now 10,200), threshold of a trend change. The Dow is already below its 200 DMA (10,354) & 50 DMA (10,537). Soon the 50 DMA will drop below the 200 DMA, a sure signal of lower prices to come. Deadly. S&P today closed down 18.35 at $1,073.69.

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.