Thursday, December 02, 2010

Gold Price Traded Sideways to Lower, Might Be Double Top With Wednesday at $1,398.30, Target Still $1,600

Gold Price Close Today : 1388.50
Change : 1.20 or 0.1%

Silver Price Close Today : 28.542
Change : 0.154 cents or 0.5%

Gold Silver Ratio Today : 48.65
Change : -0.222 or -0.5%

Silver Gold Ratio Today : 0.02056
Change : 0.000093 or 0.5%

Platinum Price Close Today : 1709.80
Change : 25.20 or 1.5%

Palladium Price Close Today : 760.05
Change : 27.80 or 3.8%

S&P 500 : 1,221.53
Change : 15.46 or 1.3%

Dow In GOLD$ : $169.16
Change : $ 1.46 or 0.9%

Dow in GOLD oz : 8.183
Change : 0.071 or 0.9%

Dow in SILVER oz : 398.09
Change : 3.71 or 0.9%

Dow Industrial : 11,362.41
Change : 106.63 or 0.9%

US Dollar Index : 80.24
Change : -0.475 or -0.6%

The GOLD PRICE today traded sideways to lower, posting what might be a double top with Wednesday at $1,398.30. Maybe this is just a breath-catcher after such a long hard run. No doubt in my little mind that $1,400 is the barrier wearing gold out, but as long as gold remains above $1,380 it can still clear $1,400. I have to say that my target for this long move remains $1,600.

At the Comex settlement gold had risen a non- committal $1.20 to $1,388.50 while silver added a meager 15.4c to 2854.2c.

Looking at the SILVER PRICE chart I am inclined to think that silver's slowing momentum has been born of its nearness to the last peak at 2933c (intraday), and that once it jumps that resistance fencing it in, it will head for the hills like your cocker spaniel when he discovers his radio-controlled shock collar is broken. On the other hand, I know what a double top looks like, too. I still think it's odd that silver and gold have slowed so much in the face of dollar weakness, when they were soaring against dollar strength. When something doesn't smell right, it usually means it's gone off.

Long and short: silver must not venture below 2800c and to reach escape velocity must clear 2900c.

Did y'all ever ride in a train? How do you know when the train is coming to a stop? You can feel it slowing down, maybe it jerks some, and the trees aren't flying by so fast. That's the way silver and gold feel. They've slowed down the past few days, largely (I suspect) as resistance builds to gold at $1,400 and sellers line up there. But let me think about the scrofulous dollar first.

The US DOLLAR INDEX fell again today, shedding 47.5 basis points (0.61%). Right now it's trading at 80.238, after bouncing off 80.062. Since the dollar also bottomed at the same place on Monday, that appears to be a parking place with some support. It coincidentally happeneth that a 50% correction of the move from 78 - 81.44 lands at 79.67, while the last high kicks in lateral support at 79.46. As long as the dollar doesn't break 76.50, it's still rallying, although in a brief correction. The equally scrofulous yen and euro couldn't make up their minds today. Yen dropped 0.35% while the euro rose 0.84%. One day soon the dollar will turn around and when it does, 'twill scratch the smile off those complacent souls who believe trend following is an easy way to make a living.

Stocks rallied today. The Dow stole another 106.63 points to close at 11,362.41 and S&P500 rose 15.46 to 1,221.53. I don't care, I wouldn't buy stocks with y'all's money if you gave it to me.

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.