Friday, November 05, 2010

The Gold Price Will Move Higher, Higher Than You Can Think or Imagine Right Now. Near Term Target is $1,600

Gold Price Close Today : 1,397.30

Gold Price Close 29-Oct : 1,357.10
Change : 40.20 or 3.0%

Silver Price Close Today : 2674.4

Silver Price Close 29-Oct : 2456
Change : 218.40 or 8.9%

Gold Silver Ratio Today : 52.25

Gold Silver Ratio 29-Oct : 55.26
Change : -3.01 or -5.4%

Silver Gold Ratio : 0.01914
Silver Gold Ratio 29-Oct : 0.01810
Change : 0.00104 or 5.8%

Dow in Gold Dollars : $ 169.31
Dow in Gold Dollars 29-Oct : $ 169.12
Change : $ 0.19 or 0.1%

Dow in Gold Ounces : 8.190
Dow in Gold Ounces 29-Oct : 8.181
Change : 0.01 or 0.1%

Dow in Silver Ounces : 427.91
Dow in Silver Ounces 29-Oct : 452.05
Change : -24.14 or -5.3%

Dow Industrial : 11,444.08
Dow Industrial 29-Oct : 11,102.40
Change : 341.68 or 3.1%

S&P 500 : 1,225.85
S&P 500 29-Oct : 1,182.66
Change : 43.19 or 3.7%

US Dollar Index : 76.602
US Dollar Index 29-Oct : 77.120
Change : -0.52 or -0.7%

Platinum Price Close Today : 1,767.50

Platinum Price Close 29-Oct : 1,707.80
Change : 59.70 or 3.5%

Palladium Price Close Today : 684.45

Palladium Price Close 29-Oct : 646.90
Change : 37.55 or 5.8%

The GOLD PRICE gained another $14.60 today, closing Comex at $1,397.30 for another new all-time high, etc., etc., etc. High was $1,397.50, nearly $1,400. Think on that. Think. Looks like a small gold leg peaked yesterday, then corrected today. Gold dropped as low as $1,374.50 at the NY open, then climbed above $1,395 and remained there most of the day.

The SILVER PRICE backed off its overnight low at 2655c, falling to 2590c at the open, then climbing straightway to 2688c and moving sideways. When Comex closed silver had added 70.5c to 2674.4c. In the after market it's trading at 2670c.

To my poor eyes, both silver and gold appeared to have made a little (not major) peak on Thursday and put in two legs of an ABC correction today. That leaves room for one more little leg down, then another up week next week.

Stocks, silver, and gold make me exceedingly nervous. Sure, everyone loves these huge gains, but they ain't natural. This cannot be sustained forever, and when the bust hits -- and it may hit sooner or it may hit later -- it will come weasel fast and razor-toothed. Don't take on leveraged positions, because that dollar can stage a bear market rally at any time.

All that said, lift up your eyes to the horizon. The SILVER PRICE and The GOLD PRICE remain in a primary uptrend (bull market) that will last another 5 years at least. They will move higher, higher than you can think or imagine right now. Near term target is $1,600 by January, February, or March 2011 with 3400c (minimum) silver.

The week's scoreboard can hardly be digested: Silver up 8.9%, palladium up 5.8%, gold up 3%, gold/silver ratio down 5.8%. The Fed's announced intention to attempt fixing the economy (which they broke in the first place) by inflating the dollar (a.k.a. devaluing the dollar) is driving markets, but woe betide all the unwary if the dollar reverses and rallies.

Yesterday the US DOLLAR INDEX bottomed about 75.60. It looked to be breaking down, and indeed made a new low for the move. However, maybe that was the last leg down because the dollar turned after that Thursday V-bottom and climbed all day today, adding 72 basis points (0.93%) to reach 76.602. Or maybe that rise was born of traders closing out their shorts before the weekend. But hark! If that's so, why does that look like a one day island reversal top on the Euro? Did the Euro turn down today, and did the US $ turn up?

Can't say yet. But if the dollar clears 76.60 and then the more important 76.90, you can bet your friends a can of snuff that the dollar has begun rallying. On the other hand, if it violates 75.60 next week, then take that jug of dimes and quarters you've been saving down to the grocery store and buy yourself some candy, because the dollar will be dropping much further. From here the dollar appears to have turned up -- conditionally, provisionally, and maybe.

Investing in stocks must be like having a schizophrenic girl friend: one day she loves you, next day she loathes you. Today stocks spent all but an hour or so underwater, but miraculously [right] popped up 9.24 points right as the doors were shutting. Dow ended at 11,444.08 while the S&P500 ended up 4.79 at 1,225.85.

Stay out of stocks. The Fed's attempt to resurrect that corpse will end badly.

Obama and Bernanke and their corrupt predecessors, especially all those Republicans, have sailed the economic ship into uncharted waters. Who knows what will happen? But the arrogance and the blind Keynesian ideology of Quantitative Easing 2 resemble a captain boring holes into the bottom of his own wooden ship. Y'all better hunker down, learn to swim, and look for some flotsam to hang onto.

"Remember, remember, the Fifth of November, Gunpowder, treason, and plot!" Today is Guy Fawkes Day in England, celebrating the discovery of the 1605 Gunpowder Plot to blow up parliament and King James I. 'Twould have been a shame had he blown up parliament.

Y'all enjoy your weekend.

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.