Friday, October 29, 2010

This Gold Price Should Reach $1,600 in January, February or March

Gold Price Close Today : 1,357.10
Gold Price Close 22-Oct : 1,324.40
Change : 32.70 or 2.5%

Silver Price Close Today : 2456
Silver Price Close 22-Oct : 2312.5
Change : 143.50 or 6.2%

Gold Silver Ratio Today : 55.26
Gold Silver Ratio 22-Oct : 57.27
Change : -2.01 or -3.5%

Silver Gold Ratio : 0.01810
Silver Gold Ratio 22-Oct : 0.01746
Change : 0.00064 or 3.6%

Dow in Gold Dollars : $ 169.12
Dow in Gold Dollars 22-Oct : $ 173.76
Change : $ (4.65) or -2.7%

Dow in Gold Ounces : 8.181
Dow in Gold Ounces 22-Oct : 8.406
Change : -0.22 or -2.7%

Dow in Silver Ounces : 452.05
Dow in Silver Ounces 22-Oct : 481.41
Change : -29.36 or -6.1%

Dow Industrial : 11,102.40
Dow Industrial 22-Oct : 11,132.56
Change : -30.16 or -0.3%

S&P 500 : 1,182.66
S&P 500 22-Oct : 1,183.08
Change : -0.42 or 0.0%

US Dollar Index : 77.120
US Dollar Index 22-Oct : 77.486
Change : -0.37 or -0.5%

Platinum Price Close Today : 1,707.80
Platinum Price Close 22-Oct : 1,674.00
Change : 33.80 or 2.0%

Palladium Price Close Today : 646.90
Palladium Price Close 22-Oct : 590.50
Change : 56.40 or 9.6%

Y'all just gaze upon the table above, remembering that the week's end is the score board, and the only thing that counts is what score you put on the board.

Who scored? Big winner for the week is palladium gaining 9.6%. Silver placed second with an amazing 143.5c or 6.2% rise. The dollar and stocks all lost ground, and the gold/silver ratio took a whopping 2 point drop.

Today poor economic news for the US sent all the wise-guys back to short more dollars. Buck fell 18.8 basis points or 0.24%. However, look at the Euro. It peaked two weeks ago at 141.51 and today is at 139.16. I would not be short-selling dollars now, because when "everybody knows" a market is going down, they've all already sold it, so whence cometh the new sellers come from to drive the price lower? The Dollar Index may fall all the way to its last low at 76.14, or even to the December 2009 low at 74.23, but remember that all those shortsellers make a sudden, sharp countertrend rally a virtual certainty. Only question is, when. However, the dollar has come close to nixing any potential for a big rally soon. If the dollar breaks 76.70, it will fall; if it breaks through 78.25, it will rally.

The Dow chart today on looks like rags hung out to dry over a fence. Clearly the market's desire was to lay down, since most activity took place below the unchanged line, with only a few little ragged blips above. At day's end the Dow closed down 11.55 at 11,102.40, not sounding as sick as it really was. S&P500 closed at 1,182.66, down 1.12. By the way, even if I thought stocks were about to rally intensely, I still wouldn't buy them. They are imprisoned in a primary down trend, and will remain in that grip for another 5 years. Never invest against the primary trend.

My biggest failing is not following my own advice. That silver today pierced 2402c and did precisely what I said it would, it shot straight up, from 2420c to 2456c at Comex close (up 68.9c) to 2474c in the aftermarket. Weekly chart is also strong as a garlic milkshake. Assuming that silver early next week exceeds the last intraday high at 2490c and so avoids making a double top, the flight skyward hath resumed.

I reckon that all those folks who rushed to sell dollars today at the same time rushed to buy gold. It broke through 1345 resistance before New York opened, shot up, wavered and retreated to 1342.50 about 9:45, meandered and then about 12:30 shot higher, but couldn't breach $1,360. A close through $1,387.10 would confirm that the correction has ended. On Comex gold today closed up $15 at $1,357.10.

Only fly in this ointment is the possibility that I have misinterpreted events and that today was not the beginning of another wave up but rather the top of a B-leg in an ABC correction, because they always look very strong. A silver close above 2490 on Monday would pick that fly out of the ointment. A sharp drop on Monday would confirm that fly really was present.

Looking farther out, I am still expecting a January, February, or March top to this rise. That should reach $1,600 gold and 3400 - 3900c silver.

On this day in 1929, Black Tuesday, a stock market crash ushered in the Great Depression. The Agricultural Depression had already been running for 8 years.

On this day in 1945 the first ball point pens went on sale in New York City for US$12.50 each, the equivalent of $152.31 today.

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.