Thursday, August 26, 2010

Gold Gave up $4.10 to Close at $1,235.40, Again, Strong in the Teeth of Options Expiry

Gold Price Close Today : 1235.40
Change : (4.10) or -0.3%

Silver Price Close Today : 18.978
Change : (0.044) cents or -0.2%

Platinum Price Close Today : 1536.00
Change : 4.00 or 0.3%

Palladium Price Close Today : 504.00
Change : 7.00 or 1.4%

Gold Silver Ratio Today : 65.10
Change : -0.065 or -0.1%

Dow Industrial : 9,985.81
Change : -74.25 or -0.7%

US Dollar Index : 82.90
Change : -0.319 or -0.4%

Options Expiry today did not manage to do much damage after all.

In the teeth of Options Expiry the SILVER PRICE lost only 4.4c to close below 1900 at 1897.8c. Tough. Wiry. Resilient.

Assuming silver presses through 1900c tomorrow, which I do assume, it will move immediately to knock a hole in that 1970-2000c ceiling. Here silver need only avoid doing something stupid, like closing below 1860c. Otherwise a wild rampage lies ahead.

Gold gave up $4.10 to close at $1,235.40, again, strong in the teeth of Options Expiry. The gold price must push clean through $1,240 tomorrow and work toward that last high at $1,255. A close below $1,230 would change the picture.

The US dollar bounced off its 50 DMA (83.18) today and fell back 31.9 basis points to 82.90. That's not encouraging but not deadly, either. Dollar ought to hold at 82.50 anyway, and certainly not fall lower than the 20 DMA at 82. Dollar smells questionable here.

STOCKS left no question what they are doing. Dow dropped below the Magical Mystical 10,000 point. Dow lost 74.25 to close at 9,985.81. S&P lost 8.11 and ended at 1,047.22.

That doesn't nearly tell the tale. Dow muddled around up 40 points until 11:00, when it sprang a leak. By 2:30 the leak had become a flood. It closed only 18 points off the 9,968 low.

Falling through 10,000 will bring painful attention on stocks as investors' morale breaks. Lower prices ahead.

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.