Thursday, January 06, 2011

The Gold Price Spiked Down Again, Could This be a Double Bottom?

Gold Price Close Today : 1371.40
Change : (2.00) or -0.1%

Silver Price Close Today : 29.110
Change : (0.063) cents or -0.2%

Gold Silver Ratio Today : 47.11
Change : 0.033 or 0.1%

Silver Gold Ratio Today : 0.02123
Change : -0.000015 or -0.1%

Platinum Price Close Today : 1728.60
Change : -1.90 or -0.1%

Palladium Price Close Today : 761.10
Change : -13.30 or -1.7%

S&P 500 : 1,273.85
Change : -2.71 or -0.2%

Dow In GOLD$ : $176.32
Change : $ (0.20) or -0.1%

Dow in GOLD oz : 8.529
Change : -0.010 or -0.1%

Dow in SILVER oz : 401.83
Change : -1.08 or -0.3%

Dow Industrial : 11,697.31
Change : -31.71 or -0.3%

US Dollar Index : 80.88
Change : 0.625 or 0.8%

The GOLD PRICE traded mostly sideways today, with another spike down to $1,364.50. That could be a double bottom, or it could be "Two strikes and the next one calls you out." Can't tell yet. Comex took $2.00 away from gold for a $1,371.40 close.

The SILVER PRICE painted the same picture as gold, but with a slightly higher V-spike. Low came at 2884c. Comex closed down 6.3c at 2911c.

GOLD/SILVER RATIO is what bothers me. Once it dips under its 20 day moving average, it doesn't arise again until its plunge has ceased. Today it crossed, just barely, above 100% of its 20 DMA at 100.1%. Now, it is also just barely possible that the ratio might make one last low, but not likely.

My stroll down Mem'ry Lane yesterday overlooked a little item I needed to share with y'all. When the Dow last was at 11,722.98 on 14 January 2000, gold was not at $1,373.40 as 'twas yesterday, but at $283.90. So while the Dow in Gold Dollars yesterday stood at G$175.80 (8.504 oz), back then the DiG$ stood at G$853.59 or 41.292 oz. For stocks that's a loss of 79.4% against gold.

DOLLAR INDEX stole center stage today as it gobbled up another 62.5 basis points to close at 80.883, up 0.8%. Thus it has o'erleapt the 80.50 resistance and run slap to the next ceiling at 80.83, and cracked that. If the dollar can break free tomorrow of that 80.83, it will at least hit its 200 DMA (81.67 now). Euro is free-falling.

Stocks wavered and stumbled, dropping briskly about 11:00 and staying down most of the day. Dow gave up 245.58 points to close 11,697.31 while the S&P lost 2.71 and ended 1,273.85. Stay away, a bad surprise awaits those who put their trust in stocks.

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.