Friday, December 03, 2010

Gold Price Leapt Straight Up to $1,415, Can Fall to $1,390 Without Damaging Uptrend

Gold Price Close Today : 1,405.40
Gold Price Close 24-Nov : 1,376.00
Change : 29.40 or 2.1%

Silver Price Close Today : 2924.1
Silver Price Close 24-Nov : 2752.8
Change : 171.30 or 6.2%

Gold Silver Ratio Today : 48.06
Gold Silver Ratio 24-Nov : 49.99
Change : -1.92 or -3.8%

Silver Gold Ratio : 0.02081
Silver Gold Ratio 24-Nov : 0.02001
Change : 0.00080 or 4.0%

Dow in Gold Dollars : $ 167.42
Dow in Gold Dollars 24-Nov : $ 168.07
Change : $ (0.65) or -0.4%

Dow in Gold Ounces : 8.099
Dow in Gold Ounces 24-Nov : 8.130
Change : -0.03 or -0.4%

Dow in Silver Ounces : 389.25
Dow in Silver Ounces 24-Nov : 406.40
Change : -17.15 or -4.2%

Dow Industrial : 11,382.09
Dow Industrial 24-Nov : 11,187.28
Change : 194.81 or 1.7%

S&P 500 : 1,224.71
S&P 500 24-Nov : 1,198.36
Change : 26.35 or 2.2%

US Dollar Index : 79.147
US Dollar Index 24-Nov : 79.790
Change : -0.64 or -0.8%

Platinum Price Close Today : 1,729.80
Platinum Price Close 24-Nov : 1,655.50
Change : 74.30 or 4.5%

Palladium Price Close Today : 764.25
Palladium Price Close 24-Nov : 693.30
Change : 70.95 or 10.2%

Yesterday I was fretting about the slow-down in SILVER PRICE and GOLD PRICE, but today they slapped all detractors About the time Comex opened in New York gold jumped straight up like a crazed armadillo. (Yes, an armadillo's chief defense is to jump straight up, not a great defense in mid-road when a car is barrelling down on you.) Similes aside, gold leapt straight up and by 11:00 had reached that resistance at the last high close, $1,409. Then it pulled another armadillo and leapt to $1,415, and there it remaineth still. Comex closed earlier, when gold stood at a mere $1,405.40, up only $16.90. Wild as a march hare.

The SILVER PRICE actually out-armadilloed GOLD PRICE. At 8:00 a.m. EST it stood just under 2860c, then about 8:30 leapt straight into the air and never stopped until it hit 2930c. It backed off a bit, traded sideways between 2925 and 2905c, then leapt again to 2940c. Comex rose 69.9c to 2924.1c.

Earlier this morning the GOLD/SILVER RATIO hit 48.05, mighty close to our 47.5 ratio. We will probably execute that trade early next week.

Yesterday's cloud over silver and gold has not altogether dispelled. Yes, it split and the sunbeams streamed down, but it didn't vanish. Both silver and gold manifest what might become double top formations. Today silver put in a higher closing high than the last top on 9 November, but barely the same intraday high. Gold's intraday high at $1,415.35 fell shy of the 9 November $1,424 high, and the closing high didn't quite match the previous $1,409.80.

And there's no way to know what they will do except to play spectator and watch the market unfold. They certainly appear to have the bit in their teeth, but that can change any time. Overhead gold must pierce $1,424 and silver 2940c to extend their advance. Down below silver can meander as low as 2850c, gold to 1390, without damaging the uptrend.

When is the last time y'all remember silver gaining 6.2% in a single week? Or the gold/silver ratio falling 4% in one week? Or, for that matter, gold rising 2.1% in one week, or palladium leaping 10.2%? That was the week. Clearly the dollar's fall (it was much higher last Friday) pitched in its share.

The US dollar index has sunk three days running, from an 81.44 intraday high near the 200 day moving average to the 20 DMA at 79.14. Today the dollar index fell into the sewer and swept out to sea, losing 115.6 basis points (1.49%) to 79.147.

Today's price marks a 39.4% decline from the intraday high. It also hints that the rally we have seen from 75.63 on 5 November was only the countertrend variety, and not the harbinger of a higher rally. Dollar's next support lies at 78.25 and 78.

Too early to say whether the dollar will springboard off its 20 DMA or keep on sinking. I remind y'all that gold is NOT responding merely to the falling dollar. Rather, you are witnessing a world-wide revulsion against all fiat currencies. Gold has recently reached new all-time highs against both the scrofulous yen and euro.

STOCKS had a big time this week. Dow added 194.81 points, up 1.7% to close 11,382.09 today. Big rises came Wednesday (250 points) and Thursday (107 points), while today the Dow rose only 19.68 points. (S&P rose 3.13 to 1,124.71).

My-Oh-my this is the greatest thing since sliced bread --- or is it? Stocks are merely tracing out the final leg of a deadly double top. Dow may reach 11,450, but stocks will then head down again. If you are clever, you will treat stocks the same way you would treat a mangy dog -- don't touch 'em.

It's been a wild week, folks. Just remember never to get too elated or too downcast in victory or defeat. We have several years of these wild upmoves ahead of us, although this particular one is showing lots of gray at its temples.

We spend way too much time studying and commemorating the deeds of politicians and other parasites, and far too little remembering the real benefactors of mankind.

Y'all enjoy your weekend, and give thanks for all God's blessings.

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.