Thursday, September 30, 2010

Much More of This Advance in the Gold Price Lies Ahead of Us, and No Great Correction Looms

Gold Price Close Today : 1307.80
Change : (0.70) or -0.1%

Silver Price Close Today : 21.798
Change : (0.131) cents or -0.6%

Platinum Price Close Today : 1656.00
Change : 21.00 or 1.3%

Palladium Price Close Today : 564.80
Change : 3.05 or 0.5%

Gold Silver Ratio Today : 60.00
Change : 0.326 or 0.5%

Dow Industrial : 10,788.05
Change : -47.23 or -0.4%

US Dollar Index : 78.95
Change : -0.387 or -0.5%

The GOLD/SILVER RATIO remains below 60:1. Watch that, watch that! Behold, many clever sellers -- too clever by half -- stand above 2200c ready to sell SILVER. Today the SILVER PRICE reached a high at 2205c early, and they clubbed it down. Low came around 11:30 at 21.56, but the silver price rebounded to 2185c and closed Comex at 2179.8c, giving up 13.1c from yesterday. So far, there's no weakness here, only the give and take of normal market action tugging back and forth in an advance. We ought to be thankful, yea, grateful in the extreme, for any opportunity to buy on even shallow dips.

The GOLD PRICE dropped 70c on Comex to close at $1,307.80. Sounds dull, but it wasn't if you were watching. The gold price was attacked on the open at its high, $1,315.50, dropped to $1,295.85 in a V, then picked its way right back up to $1308 and hung around there the rest of the day. Clearly strong support awaits from $1295 - $1308, and now resistance to beat is at $1,315.

I know I sound crazy, but much more of this gold price advance lies ahead of us, and no great correction looms. Gold in euros is hovering around the 50 DMA, which suggests its correction has ended.

At some breaking point probably nearby, the silver and gold markets will run out of sellers. Then we will see the muscle behind this rise. Scepticism remains, and that doubt is motivating sellers to cash out as if we were seeing significant highs. That will prove a mistake.

Okay, maybe I went overboard yesterday since one of my readers wrote describing that commentary as a "homily." Y'all see what reading newspapers and watching TV news does to me. Once you come out of the coma and grasp that that propaganda is what keeps most people in a coma, it's tough not to sound a bit preachy. However, in describing the "FDA Food Safety Modernization" Act, S.510, I remained modest, calm and understated, and stayed far from describing exactly how despicable it is or how gravely it will damage American's health, the economy, and small, local farmers. Within its scrofulous, slimy, loathsome body it embodies everything wrong with the US: corporate-government rule, suppression of competition under the self- righteous guise of salvation by government, poisoning the public with cardboard food, suppressing economic freedom, murder by government, destruction of common law rights, and all wrapped in the hypocritical toga of the rule of law.

Y'all still wondering how I feel about S. 510? Link for US senators contact information is Put in your state or zip code and get contact info. By the way, they count a mailed letter more significant than an email, but deluge them with emails anyway.

If you were caring for a dying patient when suddenly he half sat up, mumbled, then lay back down, would you conclude that they were healed? Just so the US DOLLAR INDEX today. It rose 8.3 basis points and is now trading at 78.774. Daily chart shows a little V bottom at 78.4 that likely represents the last push down of the last wave down. If so the dollar will rally slightly, maybe to 79.80 even, and then resume its plunge to 72 - 74.

STOCKS have a flat tire, and it is spinning in a mudhole. Dow today lost 47.23 to close 10,788.05. S&P 500 fared no better, losing 1.15 to stop at 1,141.20. One begins to sniff the tang of decay, the whiff of corruption, the puff of rot that hints the run is over and next comes the plunge.

Today the Dow in Gold Dollars (DiG$) closed at the bottom of that G$170 - G$175 (8.223 - 8.466 oz) range that has held it captive for several weeks. Dow in Silver (DiSoz) remains at the last big low, 496.46 oz, ready to dive over the cliff.

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.