Friday, July 09, 2010

Both Gold and Silver Prices Made Bottoms on Wednesday and Confirmed Those Bottoms Yesterday

Gold Price CloseToday : 1,209.60
Gold Price Close2nd July : 1,207.40
Change: 2.20 or 0.2%

Silver Price Close Today : 1805.3
Silver Price Close 2nd July : 1769.8
Change 35.50 or 2.0%

Platinum Price Close Today: 1,530.80
Platinum Price Close 2nd July : 1,503.30
Change: 27.50 or 1.8%

Palladium Price Close Today: 458.25
Palladium Price Close 2nd July : 432.40
Change: 25.85 or 6.0%

Gold Silver Ratio Today: 67.00
Gold Silver Ratio Close 2nd July : 68.22
Change: -1.22 or -1.8%

Today is the 19th anniversary of our acquittal in federal court on tax charges, so we are celebrating and I must leave early. You can read about it at To God alone be the glory. If the government had had their way, nineteen years would have been my sentence -- but they didn't have their way. So dangerous am I!

Silver and gold prices struggled across the week defending their lows with alacrity and victory, and closed the week above critical support levels, just to prove their point. The Dollar has stepped into a mine shaft, and stocks are staging a zombie rally.

I am writing this before stock markets close, but expect no big difference at closing. Dow stands up 39.28 at 10,178.27 (S&P up 6.34 at 1,076.59), but it has been a cliff-hanger day. Stocks tried to rise early in the day and were whipped back to negative territory, then tried weakly several times to rally. Here around 2:30 EDT they have managed to rally to the day's high, aided, no doubt, by Nice friends in Government places. Makes no difference, as they are pounding paper money down a rat-hole. Stocks will drop much further, most likely beginning early next week.

The US DOLLAR INDEX rose today, but has been scourged the whole week. Note that today it could not climb and hold above 84, and is now trading at 83.986, up 16.2 basis points, but below psychologically critical 84.

Dollar might be positioned to rally next week, if only a short rally. Appears headed now for 82 before strong support catches it. Euro trading today at $1.2644.

Both GOLD and SILVER PRICES made bottoms on Wednesday and confirmed those bottoms yesterday. We may suffer much more range trading, but won't see those lows again, I don't believe.

All attempts to break silver and gold last week failed. Yes, that is important. The silly Bank for International Settlements announcement last week that it had swapped foreign currencies for gold from European commercial banks constitutes only another sally in the propaganda war against gold that central banks an the IMF have been waging against gold since memory runneth not to the contrary, or since 1992 at least. They make these announcements to frighten the gold market, but upon closer inspection they don't pass even the coarsest hogwash filter.

Ponder: The BIS took 349 tonnes (11.2 million ounces) of gold in exchange for currencies, but as a swap. That means that in a year or a quarter the BIS will sell the gold back to them, probably at an agreed price, and buy back the currencies. Now, exactly HOW does this closed transaction affect the open market? Does it add gold supply? Nope. O, O, O, squeak the newspapers, but what if the banks can't buy back the gold and throw it on the open market? Well, they won't, but what if they did? The London gold market trades an average of 18.3 moz per day. All the BIS swap amounts to a gigantical, colossal, gargantuan 61.2% of a single day's trading in London.

See what I mean? Can't pass the hogwash filter.

Silver today gained 20.1c to close at 1805.3c. Gold added $13.80 to close at $1,209.60 on Comex. These numbers please the psyche, above 1800c and $1,200, but technically they speak with forked tongue. To prove it has left this correction behind, silver needs to climb above 1850c then 1900c and gold must better $1,225.

Lots of folks are droning how silver and gold never rally in the summer. True, they usually don't, but where is it engraved in stone that they can't this year?

Probably more range trading awaits us, but y'all ought to use every price retreat to buy more silver and gold.

Here's a mighty irony: Holland will face Spain in the World Cup championship? Because from 1568 - 1609 the Dutch fought a War for Independence against the Spanish empire, a long & bloody war for independence. Now they meet on a bloodless field over a leather ball.

Y'all enjoy your weekend.

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.