Thursday, August 12, 2010

Without Doubt Gold and Silver are Spreading their Wings.

Gold Price Close Today : 1214.50
Change : 17.00 or 1.4%

Silver Price Close Today : 18.053
Change : 0.163 cents or 0.9%

Platinum Price Close Today : 1533.00
Change : 15.00 or 1.0%

Palladium Price Close Today : 472.00
Change : 5.00 or 1.1%

Gold Silver Ratio Today : 67.27
Change : 0.337 or 0.5%

Dow Industrial : 10,319.95
Change : -58.88 or -0.6%

US Dollar Index : 82.61
Change : 0.323 or 0.4%

Looky, looky! The US DOLLAR INDEX raised the ante again today, climbing 32.3 basis points after yesterday's huge 165 bps gain. Trading now at 82.613. My friend Bob the Technical Genius called today to impress upon my mind the picture that I have been suspecting: the US dollar is headed much higher.

That's not as nuts as it sounds. Maybe the chart is telling us that the yen and Euro will be flying apart. But will a rising dollar hurt silver and gold? No, a decoupling has begun and is unrolling, a decoupling that is making silver and gold function as alternative currencies to all the bogus fiat currencies. And after today in silver and gold? Well, I'll speak to that below.

STOCKS paused today as they hit a ledge on the face of that cliff they fell off of yesterday. Owch! They still lost 58.88 to close at 10,319.95, and S&P500 lost 5.86 to end at 1,083.61. Don't take my word for the bear market in stocks. Get a ten year chart of the Dow Jones Industrial Average, pin it up on the wall, then step back eight feet. Now, look at it: which way is it headed, consistently? Right: down. That's what a primary trend looks like, and it lasts 15 to 20 years. So while all the stock pimps on Wall Street and in the financial media and in Washington tell you it's all right for the long term, just you remember those angler fish in the deep ocean. They have a tongue with a luminescent appendix, a jiggler, and when they're hungry they stick out that tongue and jiggle it in the dark. When the unwary fish approach to partake of what they believe is a free and shiny lunch, they become lunch themselves. Don't believe those jiggling tongues, unless you aspire to become lunch, too.

The GOLD PRICE hit that $1,205 resistance immediately after opening at $1,199, cleared $1,210, and in ten minutes stood at $1,215, then traded tightly sidewise the rest of the day, from $1,212 to $1,215. Comex gold closed up $17.00 [sic] at $1,214.50. To keep up the advance, gold tomorrow must close above $1,218, then above $1,225-$1,232. The gold price now has climbed above all its moving averages, so the momentum is up. Overbought/Oversold indicators show the gold price has plenty more room to climb.

The SILVER PRICE also climbed above psychological resistance at 1800c to end its day on Comex up 16.3c to 1805.3c. In the aftermarket its trading higher at 1810c.

SILVER did not show gold's drama today, but merely rose steadily and stayed above 1800c all day. Silver needs to make up that difference. Some resistance lurks at 1810, but chiefly at 1840 to 1860c. Until silver crosses that mark, nobody will believe it has shed its cocoon and become a mighty butterfly. Fact is, that 2000c mark above is the real goal.

But both metals put in a good performance the last two days. It wasn't exactly, but has the feel of a key reversal, a unquestionable turnaround. I don't know how much longer silver and gold will tarry before flying away, but without doubt silver are gold are spreading their wings.

Wait no longer to buy. Buy more on a silver close above 1860c.
On this date in 1896 gold was discovered on the Klondike River at Dawson.

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.