Wednesday, November 17, 2010

Gold Price Targeting $1,600, No Evidence To Suggest Any Changes To The Chart Set So Long Ago

Gold Price Close Today : 1336.80
Change : (1.50) or -0.1%

Silver Price Close Today : 25.507
Change : 0.278 cents or 1.1%

Gold Silver Ratio Today : 52.41
Change : -0.637 or -1.2%

Silver Gold Ratio Today : 0.01908
Change : 0.000229 or 1.2%

Platinum Price Close Today : 1639.70
Change : -29.80 or -1.8%

Palladium Price Close Today : 659.75
Change : -8.75 or -1.3%

S&P 500 : 1,178.59
Change : 0.25 or 0.0%

Dow In GOLD$ : $170.22
Change : $ (0.03) or 0.0%

Dow in GOLD oz : 8.235
Change : -0.002 or 0.0%

Dow in SILVER oz : 431.56
Change : -0.66 or -0.2%

Dow Industrial : 11,007.88
Change : -15.62 or -0.1%

US Dollar Index : 79.08
Change : -0.132 or -0.2%

The GOLD PRICE played sideways all day, ranging from $1331.30 to $1,341.75, resolving nothing, hinting nothing. This sideways rectangular pattern can be a consolidation for reversal, or it can be a continuation pattern. Nothing tells me which, although today's slightly higher low give about a 2 degree upward bias.

Gold has struck its 50 Day Moving Average ($1,330.25), which often serves as a springboard to turn a correction around.

Recall also the seasonal pattern. 'Tis not rare but common that silver and gold correct in November, then rise through December.

The SILVER PRICE, on the other hand, has been riding its 20 DMA since last July, rather than the 50. Today that 20 DMA stands at 2541c, and silver today sort of bounced off that mark. The silver graph has pierced the 20 DMA about as much as it did back in August. If silver doesn't hold here or at lateral support of 2500c, then you have to cast your eyes down to the 50 DMA at 2335c. Right now, I don't expect that. We may have seen the low yesterday, but it's awfully early to tell. We need confirmation by silver breaking through 2600c.

These mixed closes are no fun. I feel like a bimetallic thermostat in a lukewarm room -- don't know whether to blow hot or cold. Tomorrow will explain all.

Here's one more little hint: premiums are climbing on silver bullion products. 90% coin has risen about a dime, silver bullion 30c and delayed. When premiums begin rising in a falling market, it often marks a turnaround.

Reasons abound for fear in the face of the present market. It could turn out very badly for silver and gold, but I have not yet seen that evidence that can pry me away from the target the chart set so long ago for $1,600 gold. When you are stubborn and right, they call you a genius. When you are stubborn and wrong, they call you a Demo---. No, no, wait, I didn't mean that. I meant a Keynesian. Or a Federal Reserve chairman. Or a socialist -- but I repeat myself.

It's never fun to see a market where one member rises and another falls the same day. Like trying to pick up a rabid weasel, it's almost sure to bite you whichever end you grab.

So today GOLD closed $1.50 lower to $1,336.80 while SILVER rose like a champ 27.8c to 2550.7c. What in the world do you make out of that?

The US DOLLAR INDEX today couldn't pierce that 79.40 resistance, having run through an entire leg up and entered corrective mode. It dropped 13.2 basis points (0.17%) to 79.078. Notice that the buck still hung on to that upward rung of 79. What you are watching is a normal correction within a longer move up. First sign of a break would be the dollar below 78.70. For now the dollar's bubble is a-rising.

STOCKS put in a sorry performance again today. The Dow's daily chart looks like rags hung out to dry on a board fence. Dow fell 15.62 to 11,077.88 while the S&P500 rose 0.25 to 1,178.59. There's another non-confirming market for you. All other indices rose but the Dow -- not by much, but they rose.

Markets that gainsay themselves are bewildered markets, not sure which way to jump.

Hope for the best, but buy sacks of dried beans and plenty of ammo.

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.