Wednesday, December 15, 2010

Gold Price Won't Dip Lower Than $1,365 or $1,350, Buy Anywhere in There

Gold Price Close Today : 1385.70
Change : (17.90) or -1.3%

Silver Price Close Today : 29.225
Change : (0.534) cents or -1.8%

Gold Silver Ratio Today : 47.41
Change : 0.249 or 0.5%

Silver Gold Ratio Today : 0.02109
Change : -0.000111 or -0.5%

Platinum Price Close Today : 1697.10
Change : 1.30 or 0.1%

Palladium Price Close Today : 747.20
Change : -8.80 or -1.2%

S&P 500 : 1,235.23
Change : -6.36 or -0.5%

Dow In GOLD$ : $170.92
Change : $ 1.92 or 1.1%

Dow in GOLD oz : 8.268
Change : 0.093 or 1.1%

Dow in SILVER oz : 392.04
Change : -0.58 or -0.1%

Dow Industrial : 11,457.47
Change : -19.07 or -0.2%

US Dollar Index : 80.24
Change : 0.877 or 1.1%

The GOLD PRICE and SILVER PRICE answered my query from yesterday by falling hard. US Dollar avenged itself on those currencies who have been kicking sand in its face and calling it a 98 lb. weakling. Stocks, I think, broke.

Silver and gold op'ed the day in weakness and kept on getting weaker. That hints they may dip even deeper tomorrow.

In New York the GOLD PRICE dropped off a cliff at the open from 1395 to 1384 in a little more than an hour. It tried to rally but couldn't rise above 1392, then steadily eroded the day away. At Comex close gold had given up $17.90 to $1,385.70. In the aftermarket it kept on falling to $1,379.90. It's a good guess this weakness will continue tomorrow, maybe breaking the last low at $1,372 and falling to the 50 DMA at $1,368. A real scare would carry slightly through the 50 DMA to $1,350 or so.

Right now I am expecting that the present correction will not reach lower than $1,365 or $1,350, and would buy anywhere in there. Then gold may trade sideways a few days, maybe a number of days, before picking up its upward climb again. In the plainest English, I don't believe we have seen the peak of this long move yet, although that probably will not come before January.

If that's correct, the GOLD/SILVER RATIO should make a new low by a couple of points, drifting down to perhaps 45.5. I would swap silver for gold at any spot ratio between 47.50 and 45.50.

The SILVER PRICE began the day around 2940c and about NÉE open it was still at 2930c. About that time it stumbled to 2885, rose and climbed back to 2940, then fell off the rest of the day. Comex close found it 53.4c shorter at 2922.50, but the damage didn't stop there. Aftermarket dragged it below 2900c to 2880c.

What's to come? Here's a guess: silver drops tomorrow slightly below the 20 DMA at 2816 and even breaks 2800c and scares everybody to death. Then it trades sideways a while before lifting off again for the final leg up.

Today the dollar slapped the nose off the euro. Euro fell 1.01% to 1.3218, pushed below its 20 DMA and nearly to its 200 DMA (1.3126). So much for scrofulous euro replacing the scrofulous dollar.

Tuesday saw the US DOLLAR INDEX drop to 78.80 in a V-bottom, recover and shoot to 79.65. Today it launched from that pad, withstood an attack that drove it back to 79.46, then fought back and soared to a high of 80.284. Last traded at 80.244, showing a gain of 87.7 basis points, a high jump by the dollar's usual standards. Resistance to be now becomes 80.30.

Today's jump carries the dollar nearly to the last high at 80.40 and above its 20 DMA. A mere 10 basis points tomorrow carries it above that last high and breeds the assumption that the dollar has turned up again. Of course, it must confirm that. Dollar appears to be ready to rally for a time.

When I say that the Dow looks like rags hung out to dry on a line on a windy day, y'all have to see that in your mind's eye. If you look at today's charts for the Dow and S&P500 at you'll see what I mean, a ragged edge above the line here and another below there. Dow still did better than the Nasdaq and SYP500, which just fell down the hill at 11:00 and never stopped rolling. Dow lost 19.07 to end at 11,457.47 while the S&P 500 was robbed of 6.36 points to 1,235.23. Soon, soon, one day soon will come a weighty plunge that will have investors weeping, wailing, and gnashing teeth even at Christmastide. Ain't no Santa Claus on Wall Street.

Miserable weather here this evening, freezing rain has smothered everything. Mercy! Avoiding this stuff is one of the chief reasons I don't live in Minnesota, and here it is chasing me!

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.