Monday, October 25, 2010

With Gold Prices Like These, The Market is Handing You a Gift Labelled "Last Chance"

Gold Price Close Today : 1338.30
Change : 13.90 or 1.0%

Silver Price Close Today : 23.544
Change : 0.419 cents or 1.8%

Gold Silver Ratio Today : 56.84
Change : -0.429 or -0.7%

Silver Gold Ratio Today : 0.01759
Change : 0.000132 or 0.8%

Platinum Price Close Today : 1700.00
Change : 26.00 or 1.6%

Palladium Price Close Today : 609.25
Change : 18.75 or 3.2%

S&P 500 : 1,185.62
Change : 2.54 or 0.2%

Dow In GOLD$ : $172.44
Change : $ (1.30) or -0.7%

Dow in GOLD oz : 8.342
Change : -0.063 or -0.7%

Dow in SILVER oz : 472.15
Change : -0.77 or -0.2%

Dow Industrial : 11,164.05
Change : 31.49 or 0.3%

US Dollar Index : 77.13
Change : -0.282 or -0.4%

I hardly want to talk about the SILVER PRICE and the GOLD PRICE today because I can't get clear in my own mind what they intend to do. It appears to have risen off the Friday bottom in rallying mode, and to have made a peak and A-B-C correction today. Question is, has gold finished the correction that began at $1,386, or will it make one more downmove before it resumes rallying. I've watched this enough before to know that surprises await the unwary, and sometimes even the ultra-wary. Key support is 1,335, so watch that. If gold can't defend that, it will make another leg down. Up above $1,349 is the hurdle gold must breach. If it climbs over that, it will attract buyers and move higher.

Today on the Comex the GOLD PRICE closed at $1,338.30 by adding $13.90 to Friday's close. Silver added 41.9c to reach 2354.9 when Comex shuttered its doors.

With its 2280c low Friday, silver's 5-day chart looks much like gold's. The SILVER PRICE has traced out new support at 2340c, so tomorrow must hold that level or sink. Above silver has been stopped by 2380c, then 2400c. Another down day tomorrow wouldn't surprise me, now would another strong up day. Until silver breaches 2400c, the picture isn't clear.

Does it really matter? At these prices or at lower the market is handing you a gift labelled "Last Chance".

The US DOLLAR INDEX must have enjoyed a wild weekend because it was hung over today. The dollar broke 76.85, which could signal that it will drop further. It touched 76.70 today, enough to break 76.85, but maybe not enough to change the trend, that is, to break down. Dollar actually spent the whole day climbing in the US market, and ended the day down only 28,.2 basis points at 77.131. That 77 line is beginning to feel important -- not bad performance that the Dollar closed higher than that 77. For now, the dollar is wallowing in a deep swamp and odds slightly favour it sinking.

The DOW JONES INDUSTRIAL AVERAGE tried to clear 11,200 today but failed wretchedly at day's end. Sure, it rose 31.49 to 11,164.05 (S&P500 clumb 2.54 to 1,185.62), but that doesn't shine any shoes when you learn that the high was 11,247.60.

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.