Wednesday, October 27, 2010

Unlike the Gold Price, the Silver Price Has Traced out a Clear Uptrend off Last Friday's Low

Gold Price Close Today : 1322.20
Change : (15.80) or -1.2%

Silver Price Close Today : 23.398
Change : (0.426) cents or -1.8%

Gold Silver Ratio Today : 56.51
Change : 0.347 or 0.6%

Silver Gold Ratio Today : 0.01770
Change : -0.000109 or -0.6%

Platinum Price Close Today : 1675.60
Change : -24.40 or -1.4%

Palladium Price Close Today : 617.15
Change : -11.90 or -1.9%

S&P 500 : 1,182.42
Change : -3.19 or -0.3%

Dow In GOLD$ : $173.95
Change : $ 1.41 or 0.8%

Dow in GOLD oz : 8.415
Change : 0.068 or 0.8%

Dow in SILVER oz : 471.45
Change : -5.83 or -1.2%

Dow Industrial : 11,126.28
Change : -43.18 or -0.4%

US Dollar Index : 78.12
Change : 0.410 or 0.5%

My suspicions yesterday bore fruit today in a large gold plunge, back to the $1,320 support.

Overnight, in Asia, the GOLD PRICE hit air and fell from $1,340 with two gaps. That fall never stopped until 11:00 at $1,319.50. It rose to $1,324, then touched off $1,320 once more (double bottom?) then climbed to oscillate around $1,325. If gold ever intends to hit $1,300, or even the $1,292.50 fifty day moving average, tomorrow would be a likely time. Arguing against that is the intraday low last week at $1,315.50, which makes today's action so far a double bottom. Looks more likely to me to fall a bit further. Likewise, if gold has in mind falling much further, that aim ought to be made clear tomorrow by breaking through the 50 DMA.

Like the GOLD PRICE  the SILVER PRICE posted a gap down (only one) in Asian trading. Unlike gold, silver has traced out a clear uptrend off last Friday's low at 2280c, with rising lows at 2320c yesterday and 2355c today. That trend is accompanied by rising highs, too: 2380c on Monday and 2420c yesterday. Therefore a break below today's 2355c low would drag silver lower. The 20 day moving average, which stopped silver last Thursday at 2285, now stands at 2315c. Today's chart shows double bottoms at 11:00 and 1:30, and I have to admit that might be the point where it turned around. However, silver will have to prove that tomorrow. I think that 2250c is a number we must still keep an eye on. A close tomorrow above 2420c points to higher prices.

The US DOLLAR INDEX made good its threatened rise today, shoving 77.80 aside and touching 78.27. Now it is trading at 78.118 up 41 basis points. Clearly the dollar is rallying, most likely toward 80. That strews tacks on the road ahead of silver and gold, never mind stocks.

Saggy old Dow looks like a big bowl today, sinking down to 11,023, the rising enough to close at 11,126.28, down 43.18. S&P500 fell 3.19 to 1,182.42. They will keep stretching until finally they break. Stay away from 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.