Monday, July 12, 2010

Yes, Keep on Buying Gold and Silver on Every Price Retreat

Gold Price Close Today : 1198.50
Change : (11.10) or -0.9%

Silver Price Close Today : 17.897
Change : (0.156) cents or -0.9%

Platinum Price Close Today : 1513.00
Change : -17.80 or -1.2%

Palladium Price Close Today : 453.30
Change : -4.95 or -1.1%

Gold Silver Ratio Today : 66.97
Change : -0.036 or -0.1%

Dow Industrial : 10,216.27
Change : 18.24 or 0.2%

US Dollar Index : 84.21
Change : 0.22 or 0.3%

GOLD contradicted all its Friday progress by closing below $1,200. With a low at $1,196.15 it barely stayed above Friday's low.

About 10:45 gold's enemies struck at $1,202, selling fiercely enough to drive gold under $1,200 to $1,196. Rest of the day was spent ooching sideways between $1,200 and $1,198. Comex closed down $11.10 at $1,198.50.

Lo, silver also gave back all Friday's gains. Low came at 1776c in a V-bottom, then silver climbed to 1795c, where it remains. On Comex it closed down 15.6c at 1789.7c.

Behold, a traders' market! Up and down in expensive but essentially meaningless gyration, winding tighter and tighter in an even-sided triangle for an eventual breakout. That comes only after a suitable period of penance, another 2-3 weeks. Range is defined by 1750c and $1,185 and $1,225 and 1850c. Inbetween lies only the feeding ground of day-traders, scalping the short-sighted and fainthearted.

Yes, keep on buying gold and silver on every price retreat.

Ahh, Americans are so convinced that everything American is superior to everything foreign. Well, maybe they are right, but not the way they think. Al Thomas of www.mutualfundmagic reports that California bonds now carry a higher interest rate that Greece or Portugal. He also says only two (2) American states are in the black, so get out of municipal bonds while you still can.

Contrary to what I was thinking Friday, the US Dollar Index today appears to be impulsing upward. Unless it closed above 85.25, consider it only a short-lived countertrend rally. The faster-moving 2p0 day moving average (85.30 now) has headed down and has also crossed below the 50 DAM (85.68). That shows the dollar's momentum is downhill, but momentum changes. We will watch this rally to see how it moves this week. Dollar Index is trading now at 84.208, up 21.5 basis points and above the magic 84. Well, psychologically magic.

STOCKS may yet move higher, but day by day the chart grows further and further sideways, like a limb on a live oak. Unhappily. unlike a live oak tree, this limb conquereth not gravity.

Today stocks whipsawed badk and forth over the unchanged line all the livelong day, burning up buying power like the National Guard buring up ammon on maneuvers. Dow closed at 10,216.27, rising a magnificent eighteen point two one points. S&P500 closed at 1,078.75, up a microscopic 0.75. Beware, beware! Big drop will strike soon.

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.