Thursday, January 27, 2011

Gold Price and Silver Price Continue to Fall, Both Metals Still In Primary Uptrend

Gold Price Close Today : 1318.40
Change : (14.60) or -1.1%

Silver Price Close Today : 27.045
Change : (0.087) cents or -0.3%

Gold Silver Ratio Today : 48.75
Change : -0.382 or -0.8%

Silver Gold Ratio Today : 0.02051
Change : 0.000159 or 0.8%

Platinum Price Close Today : 1780.60
Change : -31.00 or -1.7%

Palladium Price Close Today : 803.45
Change : -9.55 or -1.2%

S&P 500 : 1,299.54
Change : 2.91 or 0.2%

Dow In GOLD$ : $187.99
Change : $ 2.15 or 1.2%

Dow in GOLD oz : 9.094
Change : 0.104 or 1.2%

Dow in SILVER oz : 443.33
Change : 0.18 or 0.0%

Dow Industrial : 11,989.83
Change : 4.39 or 0.0%

US Dollar Index : 77.75
Change : -0.147 or -0.2%

GOLD PRICE and SILVER PRICE completed in European trading last night (for us) the upward reaction begun yesterday. Mercy there was none once they began falling.

Wow. 'Twas a short-lived silver and gold rally, no?

The GOLD PRICE dropped from a high of $1,347 to $1,310.30. Comex gold gave up $14.60 and ended at $1,318.40. Aftermarket saw it trading near the low at $1,311.40.

The SILVER PRICE held up a little better than gold, but still took a rough beating with a knobbly club. Peaked last night at 2780c, then dropped to 2725c around 4:00 a.m., while Wall Street executives and traders were still wrapped in their beds, with visions of felonies danced in their heads. Silver then danced along that level, even rallied a bit. From the New York open it rallied to 2770c again at 10:30, then staged a Niagara Falls clean down to 2674c by 11:30. Comex silver closed down only 8.7c to 2704.5c.

On both charts today's action looks like a kind of cattywampus key reversal. That is, they tried to break into new high ground, then closed lower -- much lower -- than the day before. That stage-whispers that tomorrow will see more grief, wailing, and lower prices.

Although -- I hasten to emphasize -- both SILVER and GOLD remain in a primary uptrend (bull market) that will last another 3 to 10 years, this present correction has not yet played out. Gold has virtually locked in a further correction to $1,300 - $1,290, maybe the 200 day moving average at $1,279.50 (right now). Silver, too, will fall further, likely heading to 2500c or even to the 200 DMA, now standing at 2209c.

An alternative reality will follow if I am misreading these charts and both metals roar back, but I most strongly doubt that. You would have first warning shot of that if gold climbed over $1,345 and silver over 2800c.

About now y'all will have to prove your mettle, and whether you are a bunch of geese that panic at every breeze, or whether you understand the primary trend and why you must hold on. More than that, you must grasp that the market is about to offer you -- at the bottom of this move -- a colossal buying opportunity.

While the US dollar index continues to wallow and sink like a torpedoed garbage scow, other parts of the world make no more economic sense. Stocks rise, on the hope that a US and world economy will re-materialize out of the speculative mists. Right, they will appear right on the heels of Santa Claus, the Easter Bunny, and the Tooth Fairy. Everything's possible, some things just ain't too likely.

Specifically, the dollar index fell 14.7 basis points today to 77.751. Chart looks like the EKG of somebody on cocaine, up, down, all over the place. Maybe it found some sort of bottom today at 77.60, but I sure wouldn't swing over hell using that for a rope. Falling wedge buildeth still, arguing that an upside move will come. Ahh, but when?

STOCKS measlied along again today, Dow gained 4.39 (Be still, my beating heart!) to 11,989.83. S&P packed in a monstrous 2.91 points to 1,299.54. I don't know who is buying, but I have some fine development land in a Florida swamp I'd like to sell them. Rising wedge will eventually wreak its vengeance and gut the optimists, sadly.

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.