Monday, June 28, 2010

Silver and Gold Prices Were Driven Backwards Again Today

Gold Price Close Today : 1238.20
Change: -17.60 or -1.4%

Silver Price Close Today : 18.678
Change -43.2 cents or -2.3%

Platinum Price Close Today: 1564.50
Change: -3.60 or -0.2%

Palladium Price Close Today: 467.90
Change: -9.50 or -2.0%

Gold Silver Ratio Today: 66.29
Change: 0.578 or 0.9%

Dow Industrial: 10,138.52
Change: -5.29 or -0.1%

US Dollar Index: 85.69
Change: 0.36 or 0.4%

SILVER and GOLD PRICES were driven backwards again today, paralleling last week's attack. This shouldn't surprise anyone since the gold price above $1,260 will attract buyers like incumbent politicians attract corporate donors and those charged with guarding the scrofulous dollar's value can't afford that.

The GOLD PRICE today handily fended off the attack on $1,238 support. It closed Comex down $17.60 at $1,238.20. Today's chart boasts a textbook example of a flag or pennant. It dropped from $1,262.50 high in a straight line (the flagpole), flew at half-mast (traded sideways above $1,245 in a rising wedge) then fell straight down once more to its $1,234.50 low. Rest of the day was whiled away trading sideways.

Ideally the gold price should not drop below $1,235, but ideal doesn't always happen. Let's say that gold is safe down to $1,225.

As always the attack wounded the SILVER PRICE more than gold. The silver price made a flag pattern like gold's off a $19.24 high. $18.60 held as the low. On Comex the silver price settled down 43.2c at $18.678.

Last week the silver price successfully fought off attacks down to $18.20. This week $18.50 ought to hold.

Suspicious as I am, I tend to view today's decline as an attack from our friends thebNice Government Men and their pustulous running dog lackeys in the bullion banks, but it might also have been traders coming in taking positions for the week where they thought silver and gold overbought.

Bear in mind: it is summertime, the slow season for silver and gold, plus this is the week before July 4th when nobody in the US works very hard. Thus silver and gold have about 2 more days to trade this week, as traders will be closing out positions Thursday and heading for a weekend of martinis on Long Guyland.

Over the weekend Dr. Robt. McHugh at noted that from the April decline the last two months has wiped out $1.7 trillion of market value from the stock market. Would you like to hang on to your stocks, and wait around for that number to grow?

The DOW IN SILVER OUNCES broke down out of a long narrow triangle in early May and has since traded in a broadening channel, working up its courage and determination to break down. Bottom border of that channel now is about 520 ounces, about 15 oz below today's close. The last low came in March 2009 at 492.5 oz, down from 2,566 in June 2001 (80% loss). When the DiSoz falls through that bottom boundary, it will plummet quickly to 493, then toward the center of the earth.

STOCKS today tried twice to climb to 10,200, only to be slapped back both times. Toward day's end everybody lost hope and the Dow closed down 5.29. That doesn't appear much of a loss, but the damage and weakness is far more easily seen in its failure to breach 10,200. Expect a big move earthwards.

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.