Thursday, November 11, 2010

The Gold Price Would Be Strengthened By a Few Days Correction and Lower Prices, Gold's Primary Trend Is Up, Targeting At Least $3,130

Gold Price Close Today : 1403.10
Change : 4.00 or 0.3%

Silver Price Close Today : 27.401
Change : 0.540 cents or 2.0%

Gold Silver Ratio Today : 51.21
Change : -0.881 or -1.7%

Silver Gold Ratio Today : 0.01953
Change : 0.000330 or 1.7%

Platinum Price Close Today : 1751.30
Change : -36.50 or -2.0%

Palladium Price Close Today : 710.00
Change : 0.00 or 0.0%

S&P 500 : 1,218.71
Change : -5.17 or -0.4%

Dow In GOLD$ : $166.23
Change : $ (1.55) or -0.9%

Dow in GOLD oz : 8.042
Change : -0.075 or -0.9%

Dow in SILVER oz : 411.78
Change : -2.78 or -0.7%

Dow Industrial : 11,283.10
Change : -73.94 or -0.7%

US Dollar Index : 78.16
Change : 0.529 or 0.7%

The GOLD PRICE eased up to a high today at $1,416.60 in spikey up and down trading. Low came at 1396.95, a $20 range high to low. Since yesterday gold has traded out an uptrend, for as much as two days' trading means. Today painted a more attractive chart since gold bested yesterday's $1,410 high. However, I will remain spooked and flinched for further downside moves until gold betters that last high around $1,425. That's just a reality of life. On Comex today gold settled up $4.00 at $1,403.10.

The SILVER PRICE chart equivocates much louder than gold's (yes, that was a joke, in case y'all missed it.) Rather than tracing out an uptrend the past two days, silver has traced out a long, narrow even-sided triangle that hints not even a nod which way it will resolve, up or down. Bottom of that triangle is at 2650c, top is at 2800c. Whichever direction it breaks first will carry a good distance the same way. Today silver closed on Comex at 2740c, up 54 cents.

Both SILVER and GOLD would be strengthened by a few days correction and lower prices, to shake out some of those weak hands who have been buying in on rising prices. However, it's for the market to speak, not me. Another hint at coming events comes from availability of gold and silver physicals. Suddenly wholesalers are quoting me delays on silver products and the less expensive gold items. It's not much, but it does perk up my ears.

I need to address a couple of questions y'all keep emailing me about.

First, no, raising the margin limit on silver futures contracts did NOT kill the silver market. That happened around the close on the day silver and gold fell, but it really was nothing more than a catalyst. Remember this: futures markets are run for benefit of the market makers, not the customers. Whenever they get their toe in the wringer, they are going to stick it to the public. They always raise margin requirements in hot markets to drive away the interest, or at least to up the ante on the players. The fundamental reason the market fell is found in its overbought condition; the margin-raising was merely the catalyst. It it hadn't been that, it would have been stray dogs.

Second, the millennium has not arrived and the world is not about to adopt gold-backed money, never mind what World Bank apparatchik and Commissar Robert Zoellick said on 7 November in his Financial Times article. He wrote verbatim, "The system should also consider employing gold as an international reference point of market expectations about inflation, deflation, and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today." 'Twas a single paragraph out of 13, and peering thru the cloud of annoying and sytlistically disgusting bureaucratic smoke-blowing, he says, "The international monetary system and its players might as well adopt gold in some remote way, because it is the measuring stick markets are already using." Yes, his next paragraph stated broadly that the era of floating exchange rates had become an unworkable embarassment (my paraphrase), but it will take a long time to develop something else.

Any way you read this, nothing will happen soon. This is merely a very early bird trial balloon, like Bill Clinton's statement a year or so ago, showing that some voices in the Establishment want gold adopted back into the system, probably because they have already loaded up their own boats with it. Somebody, after all, was buying in the late 1990s and early 2000s when governments were selling under the table, and you can bet it was those with what the Spanish call enchufe, connections. In any event, action is years away. Besides, adopting gold into the system is worse than meaningless, it will only gold plate the corrupt, fraudulent monetary system to keep it alive a bit longer. No reform will answer except a return to gold and silver money along with full and complete abolition of central banks, fiat money, and fractional reserve banking, because those are the thieves of our liberty and our prosperity.

Whew! Feels better to get that bone out of my craw. These government-bureaucrat-and-central-banking weasels make we want to puke.

The US DOLLAR INDEX blew through 78 resistance today, bouncing off a 78.28 high and now at 78.163, rising 52.9 basis points (0.68%). Yes, that is another fleshy rise, fifth day running. Meanwhile the Euro continues to fall.

Dollar's six month chart has traced out a W or double bottom pattern with points at 76.14 and 75.63. Resistance at 78.28 has been tapped thrice, so next time -- tomorrow, maybe? -- should hammer through. 50 DMA stands at 78.77, and certainly is one target for this move. Will it be the ultimate target? Not judging from the dollar's recent strength. Soon the shorts will panic. Above the 50 DMA the dollar takes aim on 80, then 82. Failing at the 50 DMA will have grim implications for the dollar, and send it plunging. For now, though, that dollar chart looks strong.

Nothing could make STOCKS float today. Dow closed at 11,283.10 losing 73.94 points. S&P gave up 5.17 to close 1,213.54. Beginning to feel like stocks have topped for this move. However, the stock market turns very slowly, so that may take awhile. Dow has worked its way down to its 20 DMA at 11,203.28, tripwire for lower prices. Lots of air thereunder.

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.