Tuesday, December 21, 2010

All the Gold Price Needs To Do Is Not Drop, That Shows it's Planning Another Advance

Gold Price Close Today : 1388.20
Change : 2.70 or 0.2%

Silver Price Close Today : 29.376
Change : 0.041 cents or 0.1%

Gold Silver Ratio Today : 47.26
Change : 0.026 or 0.1%

Silver Gold Ratio Today : 0.02116
Change : -0.000012 or -0.1%

Platinum Price Close Today : 1723.60
Change : 12.70 or 0.7%

Palladium Price Close Today : 754.50
Change : 12.50 or 1.7%

S&P 500 : 1,254.60
Change : 7.52 or 0.6%

Dow In GOLD$ : $171.74
Change : $ 0.50 or 0.3%

Dow in GOLD oz : 8.308
Change : 0.024 or 0.3%

Dow in SILVER oz : 392.60
Change : 1.87 or 0.5%

Dow Industrial : 11,533.16
Change : 55.03 or 0.5%

US Dollar Index : 80.69
Change : 0.064 or 0.1%

The GOLD PRICE really wasn't stirring itself up to do much of anything today, snoozing ahead of the Christmas holidays. It couldn't pierce that roughly $1,388 resistance, but it did bolt one time today to $1,392, right on the open, then just as speedily was slapped winded, plumb to $1,381.50 in about 10 minutes. Comex closed at $1,388.20, up $2.70. In the aftermarket it edged down about $3.

This doesn't inspire cheering celebrations in the street, but it is adequate for gold. Yes, all it needs to do right now is not drop, and that shows it is correcting sideways and planning another advance. Gold must remain above $1,360, and overhead must clear resistance at $1,392 and $1,406. I don't expect much to happen between now and St. John's Day (Monday, 27 Dec). Unless the natives on the trading floor get restless the week after Christmas and want to scalp some easy profits by running the market up and then down, next week promises quiet as well.

The SILVER PRICE is treading water like gold. Now, since last Thursday it has established an uptrend (higher lows) but has also stalled at 2950c. Today it traded range-bound between 2940c and 2920c, with the exception of a very brief high spike to 2955c and a very brief low spike to 2905c.

This suffices. 'Tis enough, for the time being, for silver merely to avoid stumbling, and to rest for another footrace. It merely needs to avoid closing below 2920c. If it clears 2955c it will run again at the 3000c door.

I continue to expect that silver and gold have one more rally leg up that will top by end-January. Yes, keep on accumulating silver and gold.

GOLD/SILVER RATIO today gave us no opening to execute swaps out of US 90% silver coin into gold, but I expect that ratio will drop when the rally starts and give us the chance to execute the swaps at a little lower rate. That takes the sting out of the large discount on US 90% right now.

For those of y'all who believe in Santa Claus, the stock market broke to a slight new high today. The Dow added 55.03 to end at 11,533.16. S&P500 gained 7.52 and ended 1,254.60.

The Dow has drawn out what is either an ascending wedge, building for a downside break out, or a flat-topped triangle, which breaks out upside. I don't know which way it will break out, but will tire y'all out by re-iterating how little I trust stocks, since (1) they are locked in a bear market for at least another 3 years, and (2) there is no economic reason to justify buying them since the depression is far from over.

But if y'all just want to watch your money evaporate, go ahead and buy 'em.

The US DOLLAR INDEX underwent a tough day. It pushed against 80.40 resistance and dropped as low as 80.243. Every time it tried to climb to its knees, somebody knocked it down again, but with one foot on an 80.243 low and one on an 80.28 low, the buck roused itself, grabbed the ladder, and climbed rung by rugn to 80.823. End of the day found it at 80.692, up only 6.4 basis points, but clearly that little increase doesn't reflect the dollar's resilience today.

Yes, it's still scrofulous, but it is rallying. For the nonce.

EURO closed below its 200 day moving average today, greatly increasing the pull of gravity.

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Thanks for your understanding.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
Phone: (888) 218-9226 or (931) 766-6066

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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.