Tuesday, December 14, 2010

Gold Price Barely Pierced it's 20 DMA and Bounced Up, Closing Up at $1,403.60

Gold Price Close Today : 1395.80
Change : 6.30 or 0.5%

Silver Price Close Today : 29.759
Change : 0.160 cents or 0.5%

Gold Silver Ratio Today : 46.90
Change : -0.041 or -0.1%

Silver Gold Ratio Today : 0.02132
Change : 0.000018 or 0.1%

Platinum Price Close Today : 1707.90
Change : 12.10 or 0.7%

Palladium Price Close Today : 760.55
Change : 4.55 or 0.6%

S&P 500 : 1,241.59
Change : 1.13 or 0.1%

Dow In GOLD$ : $169.02
Change : $ (0.04) or 0.0%

Dow in GOLD oz : 8.177
Change : -0.002 or 0.0%

Dow in SILVER oz : 385.65
Change : 1.59 or 0.4%

Dow Industrial : 11,476.54
Change : 47.98 or 0.4%

US Dollar Index : 79.40
Change : 0.112 or 0.1%

Both the GOLD PRICE and the SILVER PRICE show five day charts that clearly depict a five wave advance from the Friday low -- one that topped early today. Rest of today was passed in an A-B-C correction, but whether the C finished or not, I can't make up my mind.

Looking at a longer term chart doesn't clear much up. Silver hammered at 30, but has it really done enough penance to be released to run wild again? And here's something spooky. Since the beginning of October silver has been cycling from low to low every 8 to 11 days. Looks odd, awfully regular. Don't know what that means.

Back to what we do know. The SILVER PRICE bounced off its 20 day moving average (now 2800c) and has climbed from that 2797c intraday low to 2975.9c on today's Comex close, adding another 16c today. Yesterday it added 102.3c!

Proportionately the longer term GOLD PRICE chart doesn't charm me quite as much as silver's, but it's strong, too. Gold barely pierced its 20 DMA (1378.65 today), and bounced up. Today the Comex bogged down and closed up $6.30 to $1,403.60, hitting that $1,405 resistance area we all know and love.

The Spot GOLD/SILVER RATIO remains below my 47.5 target, closing today at 46.90, but you won't get very close to that trading physicals because wholesalers are discounting the silver, especially 90% coin. It's hard for me to swallow that the Ratio's indecision will last much longer, because it simply never does at peaks. Either it will rise or fall another jump, maybe to 45.5. If so, that says silver and gold will rise further before they peak. All this clearly reveals -- without details of course -- a sort of controlled panic behind the scenes, people quietly packing up their money and leaving the fiat dollar, euro, and yen behind. Serious money is pouring into silver and gold.

The US Dollar index crawled and scratched to just over 80 (80.08) on Friday, but on Monday promptly fell 76 basis points, puking back it gains and much more besides. Today it recovered 11.2 basis points to reach 79.396, but this inspireth no one.

The mere propinquity of the 200 DMA (79.76) was enough to make the Dollar faint. Now the scrofulous dollar has established a down trend with lower highs, one lower low, and what appears to be another shortly arriving. 50 DMA lies at 78.33, and one might conceive (if one were the sort who draws to inside straights) that the dollar might stop there. It had better, or twill drop to 78, maybe 76 or lower. Euro fell today but chart has the look of a rally.

STOCKS today rose again. The Dow somewhere found 47.98 points to close 11,476.54. S&P 500, by no means as enthusiastic, added 1.13 to 1,241.59.

No doubt there are many (considering what they pay them on Wall Street) who are predicting a recovery in stocks. And they are right, if you are willing to wait long enough, say 5 to 8 years. All I can see is a double top, and what might be the first half of a key reversal, with today's break into a new high for the move and rather dramatic fall off to a lower close. Yet that doesn't QUITE qualify as a Key Reversal, because it didn't close lower than yesterday. Still, it's weak. Stocks, remember, are to investments as deadly nightshade is to gift bouquets.

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

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

© 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.