Monday, February 28, 2011

The Gold Price and Silver Price Are Going Higher, Once Gold Confirms Silver's New Highs

Gold Price Close Today : 1409.30
Change : 0.60 or 0.0%

Silver Price Close Today : 33.804
Change : 0.906 cents or 2.8%

Gold Silver Ratio Today : 41.69
Change : -1.130 or -2.6%

Silver Gold Ratio Today : 0.02399
Change : 0.000633 or 2.7%

Platinum Price Close Today : 1808.50
Change : 5.20 or 0.3%

Palladium Price Close Today : 796.65
Change : 6.10 or 0.8%

S&P 500 : 1,327.22
Change : 7.34 or 0.6%

Dow In GOLD$ : $179.34
Change : $ 1.35 or 0.8%

Dow in GOLD oz : 8.675
Change : 0.065 or 0.8%

Dow in SILVER oz : 361.68
Change : 2.74 or 0.8%

Dow Industrial : 12,226.34
Change : 95.89 or 0.8%

US Dollar Index : 76.85
Change : -0.506 or -0.7%

The GOLD PRICE and SILVER PRICE sent mixed signals today. On Comex silver claimed another 90.6 cents, climbing to 3380.4c. Gold, on the other hand, rose a massy sixty cents to $1,409.30. Now those closes made my mind itch, so I scrolled back through my closing prices and sure enough, I did recall something similar. On 7 February gold closed down seventy cents while silver rose 28.4c. Next day silver rose 92.3c and gold added $15.80. Whether that has any predictive value, I leave to y'all to work out.

Gold is the unsteadier partner. The five day chart chows a clear uptrend since last Thursday, but it's choppy and hard to parse. Today's low hit $1,404.80 while the high reached $1,416.10, not quite last Thursday's high.

No secret the GOLD PRICE still is struggling to clear $1,415 - $1,418 resistance, bulging down from that last high at $1,422.60. All will be well as long as gold doesn't stumble through today's low.

Y'all do understand the riddle here, don't you? Gold and silver are supposed to move together and confirm each other. Today was a non-confirmation, signaling that one partner or the other has got it wrong. Either silver should be rising, or gold should be flat lining. That tension will lead to a snap-back of some kind, whether higher or lower isn't clear, but since silver is behaving so garlicky, my dime is on higher prices.

The SILVER PRICE knocked so hard on 3400c today -- high was 3399c -- it liked to have blown out the top of the chart. Five day chart looks a little like a rising flat-topped triangle. Never mind, it appears ready to break through 3400c tomorrow. And what do you reckon all those croakers and critics and smart fellers with them Harvard MBAs up there on Wall Street are gonna do then? Why, they'll discover that silver is the smartest thing since sliced bread and they'll follow that trend like they always do. After 3500c, I can't even guess where silver might run. 3900c? More. Name a number higher, or it could drop like a rock tomorrow. Hot money don't hang around.

Bottom line: silver and gold are going higher. Once gold confirms silver's new highs by posting a new high itself, all the brakes will disappear.

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If y'all like surprises, you're going to love today.

US DOLLAR INDEX wasn't really a surprise, dropping 50.6 basis points (0.65%) to 76.853, on its way to lower realms. Well, hang on a minute. This makes a double bottom with the early February low at 76.88. I reckon that means the dollar index could claw and scrabble and grab hold here and rally, but I, for one, want to see it myself, before I believe anything. Otherwise the dollar will merely keep on plunging toward the November low at 75.63. The euro, trashy currency of the bureaucratic dictatorship known as the European Union, stands at the top, yea, double top of its recent range, closing today at 1.3803. It could keep on rising or it could fall from here. Flip a coin.

I bet they run through one of those industrial-sized bottles of Aspirin every day in the rooms where the Nice Government Men for the European Central Bank and for the Federal Reserve manipulate their exchange rates. I'm glad I only have to watch.,

On Friday I wrote that, correcting its 400 point fall (so far) the Dow would like rally to 12,200 today. It closed at 12,226.34, up 95.89 (0.79%). S&P rose 7.34 to 1,327.22. No surprise there.

No geniu, either, behind that prognostication, just simple mathematics. A 50% correction of a 400 point fall is 200 points. A 62.8% correction is about 248. Dow has run out of correcting steam, and should resume its fall tomorrow.

Sure, the Dow crossed above its 20 DMA today (12,175.10), and that will deceive the faithful into believing this 400 point drop was only a correction. Here's why they're wrong: if you draw a line from the 10 January low through the end- January low and extend it through today, you'll see that last Thursday's low broke that trend line. I call that "broke-down", but I will leave room for other calls. How about this one? BROADENING TOP, with higher or flat highs and lower lows resolved at last by a disemboweling plunge. Whatever you want to call it, hog or hen, the rising wedge pattern has now broken down and will probably claim 600 points from the top before it catches its breath. And the carnage will not stop there.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
Phone: (888) 218-9226 or (931) 766-6066

© 2011, 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.