Tuesday, December 28, 2010

Gold Price Headed Higher, Must Close Above $1,416 Must Not Drop Below $1,385

Gold Price Close Today : 1405.20
Change : 22.80 or 1.6%

Silver Price Close Today : 30.297
Change : 1.062 cents or 3.6%

Gold Silver Ratio Today : 46.38
Change : -0.905 or -1.9%

Silver Gold Ratio Today : 0.02156
Change : 0.000413 or 2.0%

Platinum Price Close Today : 1757.20
Change : 21.60 or 1.2%

Palladium Price Close Today : 786.50
Change : 17.35 or 2.3%

S&P 500 : 1,258.51
Change : 0.97 or 0.1%

Dow In GOLD$ : $170.29
Change : $ (2.48) or -1.4%

Dow in GOLD oz : 8.238
Change : -0.120 or -1.4%

Dow in SILVER oz : 382.07
Change : 0.54 or 0.1%

Dow Industrial : 11,575.54
Change : 20.51 or 0.2%

US Dollar Index : 80.37
Change : 0.007 or 0.0%

I hope each of you had an unforgettable Christmas, and wish you all a merry Christmastide (there are 9 days left) and a good slide into the New Year.

The reasons given for today's SILVER PRICE and GOLD PRICE jump by the official state news agency -- Whoops! Sorry, sorry, I meant the US corporate media -- was that when China raised interest rates over the weekend (remember those government surprise parties I mentioned last week) silver and gold were supposed to go down. Yesterday they were flat, but today, in the absence of their fall, all the shorts (who had sold gold anticipating the Chinese interest rate reduction would pull the rug out from under gold) got caught, well, short. By the time a much bruised Comex closed, gold had risen $22.80 to $1,405.20 and silver to 3029.7c, up 106.2c.

Where does that leave us? Gold merely rose to the resistance ceiling at $1,406, but not to the last high at $1,415 (6 Dec). Silver, however, smashed its 7 Dec high of 2974.80 to reach a new all-time high for this bull market at 3029.7c. GOLD/SILVER RATIO fell to a new low for this move at 46.38.

The Nice Government Men must be sweating bullets and razors. They like tidy endings to years, because so many calculations are made from those year-end figure, and it appears that instead of keeping gold as low as possible to year end, the correction may have ended and silver and gold will rise -- are rising -- immediately.

Options also expired today, another force moving metals upward.

On the five day chart the GOLD PRICE has clearly broken out to the upside, from a double-bottom base at $1,370 last Thursday and over the weekend, and cleared all resistance between $1,385 and $1,406. Can't say anything about that except, "Headed higher." Of course, gold must confirm by closing above $1,416 and must not drop below $1,385, but other than that, "Headed higher."

The SILVER PRICE 5-day chart mirrors gold, but with different numbers. It broke through resistance at 2950c and ran to a new high at 3029.7c. Rising 106.2c in a day pretty well points to a strong breakout. 3400c is my next target, and might mark the top for the move, which points to a $1,475 - $1,530-ish target for gold.

It appears that the correction has ended for silver and gold and that the last leg up I have been expecting for this intermediate move (NOT ultimate move for the bull market) has arrived. Peak should hit sometime from mid- to end-January.

Chinese interest rate reduction announcement did nothing to the US dollar index. It barely moved today, up 7 basis points to 80.373.

Stocks are piddling, or more likely, stalling. Dow closed up 20.51 points today at 11,575.54 while the S&P500 rose a gigantic 0.97 to 1,258.51. This is as good as it gets for stocks. After the new year begins, sobriety and reality will once again take hold, and that can't bring joy to Wall Street.

Readers have asked me why I quote silver as I do, in cents rather than dollars. Answer? Because that's the way the Comex quotes it. If it makes you queasy, just move the decimal point left two places.

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.