Gold Price Close Today : 1,234.80
Gold Price Close 20-Aug : 1,227.70
Change : 7.10 or 0.6%
Silver Price Close Today : 1903.9
Silver Price Close 20-Aug : 1812
Change : 91.90 or 5.1%
Platinum Price Close Today : 1,531.00
Platinum Price Close 20-Aug : 1,514.00
Change : 17.00 or 1.1%
Palladium Price Close Today : 504.00
Palladium Price Close 20-Aug : 478.00
Change : 26.00 or 5.4%
Gold Silver Ratio Today : 64.86
Gold Silver Ratio 20-Aug : 67.75
Change : -2.90 or -4.3%
Dow Industrial : 10,108.04
Dow Industrial 20-Aug : 10,213.47
Change : -105.43 or -1.0%
US Dollar Index : 82.940
US Dollar Index 20-Aug : 83.049
Change : -0.11 or -0.1%
Hush! Let the week speak: Gold up seven bucks, stocks down 1%, US dollar index flat, and silver up -- what! 5.1%!
THE DOLLAR INDEX may have bottomed yesterday and today with lows around 82.65. Yet it also made double tops around 83.20. It managed to hold on around 82.90. In the broader view the dollar ought to begin rising again next week if it is, as I have been thinking, in a rally mode. A close below 82 would be lethal to that interpretation. Upside the last high is 83.56, so the dollar needs to pass that point.
STOCKS today tried to erase yesterday's shame, but 'twasn't too convincing. The Dow rose 122.23 to close above Magical 10,000 at 10,108.04. S&P rose 12.43 to close at 1,060.03. These are but the thrashings of the trapped. Stocks will drop more next week, perhaps much more. Please save yourself the heartache and flee stocks. Once they break through Dow 9,700, they will sink like an anchor pitched off the Empire State Building.
The little G$175 (8.466 oz) support that was holding the DOW IN GOLD DOLLARS (DiG$) in the air gave way last week, and this week the DiGS sank to G$167.09 (8.083 oz). Stocks have definitely begun the next stage of their decline against gold. Ultimate target is G$20.67 (1.000 oz).
The DOW IN SILVER OUNCES also is about to break through longstanding support at 525 ounces, on its way to an ultimate 32 ounces or less.
The GOLD/SILVER RATIO dropped off a cliff this week, beginning at 68.402 and ending at 64.856, down 5%. The story does not stop there. The fall took the ratio to the bottom boundary of the even-sided triangle it has so long been forming. One more step down and the ratio will fall out of that triangle, signalling what should prove a momentous move down. A close below the last low (64.389) will confirm that fall. Observe also that this new close places the ratio below both the 300 and 200 DMAs.
There is more. The 300 DMA had barely crossed above the 200 DMA, not what we want to see in a market in a primary downtrend. A falling ratio will pull that 200 DMA back below the 300 DMA.
I'm not finished. This week places the Ratio below its 50 DMA (66.35) and 17 DMA (66.1), which signals a market moving down.
The SILVER PRICE this week performed spectacularly. It rose 111.4c or 6.4%, from 1792.5c to 1903.9c. Where does that place it? First, it has broken through the downtrend line from the May 2010 high. Second, it is moving up when the seasonal chart says it ought to move up. Third, silver now has opportunity to challenge that May high at 1964c, but more importantly, to exceed the March 2008 high at 2068.5c. Today silver rose 6.1c to 1903.9c, and that backwardation we saw on Wednesday has not returned.
"Bull markets climb a wall of worry," saith the market proverb. A thousand fundamental reasons present themselves to doubt this rally, but technically nothing stands in the way of higher prices.
The little G$175 (8.466 oz) support that was holding the Dow in Gold Dollars (DiG$) in the air gave way last week, and this week the DiGS sank to G$167.09 (8.083 oz). Stocks have definitely begun the next stage of their decline against gold. Ultimate target is G$20.67 (1.000 oz).
The Dow in Silver Ounces also is about to break through longstanding support at 525 ounces, on its way to an ultimate 32 ounces or less.
The GOLD PRICE at the end of July pierced the uptrend line but has since splendidly recovered. It has reached $1,240 resistance but stalled there the past two days, although "stalled" feels like the wrong word after its Olympian performance jumping up on Thursday, Options Expiry, when normally it would be driven down. Today gold dropped 60c to $1,234.80. Next week it must exceed $1,240 or fall back. No equivocating here.
Once through $1,240 gold targets $1,255, the last high. Above that point it takes off into another rally, which in my ignorance looks like "the really big wave" coming. If the past week's strength has arisen solely from the passing attention of traders, then this rally will evaporate. But if it is driven by more powerful and less evanescent forces -- such as fears of sovereign debt defaults, fears of currency defaults, fears of more banking crises -- then it won't fade. This is that wall of worry that gold must climb.
Piffle! It makes no different at all to the long term, for the course is set firmly upward for both silver and gold for the next five years. This week I have been meditating on the thinness of gold and silver supply. Most folks think one can easily pick up the phone and order a million bucks worth of silver and gold, no problem. Ahh, but the market is so thin that when several large folks, or a multitude of small folks, press into the market, there's not enough supply for everybody to get some. Remember fall 2008. Those days of shortages will return. The time to buy silver and gold is before the crisis occurs.
Y'all enjoy your weekend. Argentums et aurum comparanda sunt --
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.