Thursday, July 08, 2010

Keep on Buying Toward the Low Side of The Trading Range, 17.85 and $1,185

Gold Price Close Today : 1198.60
Change: 3.80 or 0.3%

Silver Price Close Today : 17.979
Change 14.6 cents or 0.8%

Platinum Price Close Today: 1518.00
Change: -5.40 or -0.4%

Palladium Price Close Today: 446.35
Change: -2.30 or -0.5%

Gold Silver Ratio Today: 66.67
Change: -0.333 or -0.5%

Dow Industrial: 10,018.28
Change: 274.66 or 2.8%

US Dollar Index: 83.97
Change: -0.11 or -0.1%

Gold and silver are oversold, but nothing says that oversold can't get more oversold. Metals whipsawed me this morning, dropping early in the day. Whipsaws are typical of trading ranges.

Most pertinent observation here is that silver has touched its 200 day moving average, a frequent destination -- and stop -- to silver corrections. Today for the umpteenth time silver fended off an attack on the lows at 1771, but was in turn beaten back at 1815c.

Gold defended $1186.90, but fainted at $1,207.66. Comex closes came in at 1785.2c, down 12.7c, and $1,195.80, down $2.80. Keep on buying toward the low side of thee trading range, 1785c and $1,185.

The DOW today reached its 20 Day Moving Average (10,135.36) 7 likely will climb a bit higher, maybe 10,200, before it turns & runs from success. Do not be seduced, this is merely a bear market rally. The bear aims to raise the hopes of the doomed, the better to maul them later.

The Death Cross -- stocks' 50 DMA crossing below the 200 DMA-- happened yesterday. That means that momentum is pointed straight down. Still the Dow -- conveniently, wink, wink -- closed up 120.71 at 10,138.99 while the S&P500 gained 9.98 to close at 1,070.25.

You'd think the US dollar index would at least stage a little rally to save face, but not yet. The dollar has now knocked 3 times on the trap door at 83.70. Usually three knocks suffices to open the door so it can fall through. The dollar has pointed its face toward 82 and most likely will reach it. Today the euro is trading at 1.2691, up 0.4 basis point.

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.