Tuesday, August 31, 2010

Silver and Gold Prices are Performing Exactly as You Would Expect if They Intended to Burst Through Old Resistance

Gold Price Close Today : 1248.30
Change : 11.40 or 0.9%

Silver Price Close Today : 19.382
Change : 0.372 cents or 2.0%

Platinum Price Close Today : 1528.00
Change : -2.00 or -0.1%

Palladium Price Close Today : 505.00
Change : 6.00 or 1.2%

Gold Silver Ratio Today : 64.41
Change : -0.661 or -1.0%

Dow Industrial : 10,014.72
Change : 4.99 or 0.0%

US Dollar Index : 83.11
Change : -0.028 or 0.0%

Today's tale is soon told: stocks wallowed, dollar equivocated, SILVER and GOLD PRICES soared like eagles above the mundane worries and cares of this sublunary globe.

SILVER and GOLD PRICES must have heard my warning yesterday and heeded it, because both took to their heels today. The SILVER PRICE added 37.2c to reach 1938.2c at Comex close, gold added $11.40 to end at $1,248.30. Today's close brings silver, sweet silver, back to the top of the range we have been fighting since May, no, since 2008. Now, now, silver dig in the spurs and ply the whip and race ahead!

The GOLD PRICE also finds itself smack against resistance at $1,250, really the last high close, $1,255. Oh, what fireworks, what pyrotechnics, what groaning of croakers and doubters who have been predicting gold's demise when gold smashes through that $1,255 mark!

Be still, my beating heart, and look at the other hand. If silver and gold were going to fail, this would be the place. Always must bear in mind that nothing is a given with markets until after it happens. Yet in answer I must add that silver and gold prices are performing exactly as you would expect if they intended to burst through old resistance.

If silver and gold prices close through that resistance tomorrow, close your eyes and buy all you can stand.

US Dollar index continues to refuse to commit itself to any direction. Oh, choppy, choppy was today's action. It did come up off that double bottom from Thursday and Friday at 82.65, and climbed (clomb? Clamb?) as high as 83.342. Alas, the dollar's nose then began bleeding, and it pursued a zig-zag course down to 82.877. Now it's trading at 83.106, down only 2.8 basis points from yesterday, so y'all can see it recovered at least that much. Dollar is headed higher, but faces a tremendous headwind.

Now why would investors be so prejudiced against the Almighty Dollar? Maybe they don't speak Bernankese, either.

STOCKS painted about as miserable a picture today as one might long to see. Dow began the day by plunging 70 points, then climbed above unchanged about 11:00 a.m. fought back and forth toward 10,076, up about 65 points, then collapsed as the day threatened to close at 2:30, but Whoops! Looky there! It close up 4.99 points at 10,014.72. S&P followed suit, up 0.41 to 1,049.33. This is pitiful. Perhaps it will satisfy the hoi polloi who listen once a day and know only that stocks rose or fell, but look at the inward performance, and you must despair of stocks. Stay out of stocks.

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.