Thursday, December 30, 2010

Gold Price Closed Today at $1405.06, Behold! It Held on to $1,405 Support

Gold Price Close Today : 1405.60
Change : (7.50) or -0.5%

Silver Price Close Today : 30.488
Change : (0.191) cents or -0.6%

Gold Silver Ratio Today : 46.10
Change : 0.043 or 0.1%

Silver Gold Ratio Today : 0.02169
Change : -0.000020 or -0.1%

Platinum Price Close Today : 1747.10
Change : -12.10 or -0.7%

Palladium Price Close Today : 787.90
Change : -6.05 or -0.8%

S&P 500 : 1,257.88
Change : -0.52 or 0.0%

Dow In GOLD$ : $170.15
Change : $ 0.89 or 0.5%

Dow in GOLD oz : 8.231
Change : 0.043 or 0.5%

Dow in SILVER oz : 379.48
Change : -0.04 or 0.0%

Dow Industrial : 11,569.71
Change : -1.90 or 0.0%

US Dollar Index : 79.52
Change : -0.275 or -0.3%

The GOLD PRICE failed to break through the $1,415 ceiling and spent most of the day atoning for its gall. Comex lost $7.50 to close at $1,405.60. Behold! It held on to $1,405 support.

The SILVER PRICE backed off today. After trading up to 3100c (in fact, 3090c) in overnight trading (4 - 6 a.m. New York time) silver eroded to a low of 3030c around noon. Comex closed at 3048.8c, losing 19.1c. Expect one more thrust up, then a fall to about the same low or a little lower, and then another push upward begins. Trading through 3100c would end that expectation. Expect it not to do much tomorrow, but Monday or Tuesday of next week the fireworks will be lit.

As with the SILVER PRICE, the GOLD PRICE will see a little correction lasting a day or two, then begin its rise again. I have to say that the rise will be spectacular and probably short-lived.

The minority opinion in my head yesterday turned out to be right as silver and gold took a rest today. Dollar Index turned a little weaker than I expected, but still held on to crucial support. Stocks piddled.

The Euro bounced up strongly above its 20 DMA (1.3228) to close today up half a percent at 1.3291. Looks like a rally driven by short-covering since the Euro has been imprisoned in a down trend since early November.

Dollar Index made a low at 79.428, cracking crucial support but not breaking it. Trading now at 79.521 down 27.5 basis points (0.35%) but above 79.50 support. Dollar Index's 50 DMA stands at 79.06, but dipping that far before reversing would change the pattern the Dollar Index has shown since November of skiing atop its 20 DMA. Whatever this is, it's not strength and other indicators point down. Dollar had better perk up quick.

STOCKS over the past month have flattened out like those long limbs on a live oak tree. Other trees don't have the tensile strength, however, of live oaks, so when they try grow that way, their limb falls off. Stocks will, too. This is not a happy chart pattern, sort of a long narrow upward wedge, which stocks have formed below. Resolves toward the center of the earth, i.e., down. Dow today closed at 11,569.71, down 1.9. S&P500 dropped 0.52 to 1,257.88. Sounds like nobody was home on Wall Street.

A reader wrote me about the correlation between the GOLD/SILVER RATIO ratio and the S&P500. Right, it's a fairly well-known correlation: they move together. About the time the gold/silver ratio peaks you can expect stocks to peak, too. With a ratio peak due soon, what does that say about stocks' future?

During the Twelve Days of Christmas (Christmas thru Epiphany, 6 Jan) our office will be working only four hours a day. Please be patient, leave a voice mail or send us an email at [email protected]

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

© 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.