Thursday, June 17, 2010

Silver and Gold Prices Proved Their Breakout Today with Strong Rises

Gold Price Close Today : 1247.50
Change: 18.20 or 1.5%

Silver Price Close Today : 18.767
Change 33.5 cents or 1.8%

Platinum Price Close Today: 1576.30
Change: 6.90 or 0.4%

Palladium Price Close Today: 480.35
Change: 6.30 or 1.3%

Gold Silver Ratio Today: 66.47
Change: -0.221 or -0.3%

Dow Industrial: 10,366.83
Change: -42.63 or -0.4%

US Dollar Index: 85.67
Change: -0.42 or -0.5%

A reader writes me that the great Richard Russell of Dow Theory Letters had to undergo an emergency appendectomy, and urged me to pray for him. I'll gladly do that, as I have learned so much at his hand through his newsletters.

After yesterday's final kiss good-bye, SILVER and GOLD PRICES proved their breakout today with strong rises.

Gold rose $18.20 to $1,247.50. That is a new all-time high, besting the 8 June close at $1,244. Since triple tops don't exist, we can expect gold to burst the bonds of earth tomorrow and begin flying. By the way, it gapped up today, and that most likely
is a "breakaway gap."

SILVER rose 33.5c to 18.767. Okay, that's not quite 18.80, but I reckon close enough, and that rise confirms gold's, although it certainly doesn't reach a new all time high. Ratio stands at 66.473, and must drop to confirm the rally.

As I said, "buy the breakouts" is a sound strategy in bull markets. You either buy the dips to support, or the breakouts.

A close by gold below $1,228.00 and silver below 18.30 would gainsay the rally I expect, but I doubt that will happen. Gold right now is targeting $1,375 and silver $30.00.

That 85.90 support for the DOLLAR INDEX gave way today after the buck tried to rise to 86.52 overnight. Sellers jumped on that like a duck on a squash bug, and from 3 a.m. EDT to 6 a.m. the dollar relentlessly rolled down hill, stopping at last at 85.60. Around 10 a.m. it tried to rally but reached 85.90, which had been support but then became resistance, and was slapped again. Now trading at 85.665, down 41.8 basis points, and destined for yet more investigation of "SUDA", Sudden Unexplained Downside Acceleration. First support here remains at 85 - 85.40.

STOCKS fell today, the Dow by 42.63 to 10,366.83 and the S&P500 by 4.92 to 1,109.69. Stocks are at a watershed, and could rally much higher or fall at once, but long term
they are a corpse already. Get away, & stay away, let the dead bury the dead.

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.