Thursday, January 20, 2011

The Gold Price Lost $23.70, a New Low for the Move

Gold Price Close Today : 1346.50
Change : (23.70) or -1.7%

Silver Price Close Today : 27.459
Change : (1.333) cents or -4.6%

Gold Silver Ratio Today : 49.04
Change : 1.447 or 3.0%

Silver Gold Ratio Today : 0.02039
Change : -0.000620 or -3.0%

Platinum Price Close Today : 1810.50
Change : -24.50 or -1.3%

Palladium Price Close Today : 812.55
Change : -1.85 or -0.2%

S&P 500 : 1,280.26
Change : -1.66 or -0.1%

Dow In GOLD$ : $181.51
Change : $ 3.12 or 1.7%

Dow in GOLD oz : 8.780
Change : 0.151 or 1.7%

Dow in SILVER oz : 430.56
Change : 0.12 or 0.0%

Dow Industrial : 11,822.80
Change : -2.49 or 0.0%

US Dollar Index : 78.82
Change : 0.176 or 0.2%

The GOLD PRICE lost $23.70 to close at $1,346.50, a new low for the move, and lower that the previous low, $1,353. Once that former $1,362 low was broken a few days ago, it became very likely gold would fall lower, in spite of the last few days' rally.

Gold lost 1.7% today and silver skidded 4.6% [sic] That fall typifies the reaction off a GOLD/SILVER RATIO low (3 January). Give it room, 'twill carry further, but 'twill also stop. Be ready.

Remember that a downtrend is defined as a series of lower highs and lower lows. Bear in mind also that a "trend in force remains in force until broken." At the very least, a trend change requires a higher low, a little higher high, even to hint of a beginning. Just watch. Be patient. My targets for gold range from $1,330 to $1,280. Problem with telling y'all that is that you get the idea that I EXPECT to see that lower number. I don't, I just recognize it as a possibility. Every day you have to look at the chart again to see whether it has changed its mind. Maybe at $1,330, or $1,315, or $1,295 it will show that mind-change. I won't know till it happens.

For the nonce, $1,345 support held for gold. From here gold has lots of trading back and forth all the way to $1,315. Below that, not so much till you reach $1,260. In fact, I don't expect this to be a brutal, major correction, but fairly short and shallow.

But there's no sign of relief yet.

The SILVER PRICE fell off a cliff at 2820c at NY open, and never hit bottom till 2740c. By the time Comex closed silver had shed 133.3c to close at 2745.9c. This took silver below its 50 DMA, 2853c, portent of more downside to come.

A good place to stop would be 2650c, but the 200 DMA, which silver oft revisits on corrections, stands at 2187c. Most likely seems 2240c, but what do I know?

Paid Moneychanger subscribers can pick up the January edition by logging in at Sorry I missed sending a commentary yesterday, but I was busy finishing up the monthly Moneychanger.

Day before yesterday, I would bet if I were a betting man, marked the top in the Dow and S&P. Today's stock market momentum was heavily down until noon, then climbed gradually toward the close. Help from the NGM? Who knows, but it doesn't matter because stocks have built that huge fatal rising wedge on the chart and the vicious break coming will overwhelm all manipulation. Days of pain approach: seek cover.

The US DOLLAR INDEX bounced off 78.50 support after yesterday's low at 78.30, and climbed 17.6 basis points from yesterday to end trading at 78.816, up 0.23%. Five day chart shows an inverse head and shoulders or V-bottom that ought to mark the reversal. Dollar needs to push cleanly up through 79 now, to prove a turnaround. I'm still expecting a strong dollar for the first quarter or half.

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.