Tuesday, March 01, 2011

Gold Price Made a New All Time Intraday High at $1,432.56, Silver Blasted Into New High Ground, I Have No Idea What It Might Reach?

Gold Price Close Today : 1430.70
Change : 21.40 or 1.5%

Silver Price Close Today : 34.416
Change : 0.612 cents or 1.8%

Gold Silver Ratio Today : 41.57
Change : -0.120 or -0.3%

Silver Gold Ratio Today : 0.02406
Change : 0.000069 or 0.3%

Platinum Price Close Today : 1840.10
Change : 10.80 or 0.6%

Palladium Price Close Today : 816.25
Change : -23.90 or -2.8%

S&P 500 : 1,306.33
Change : -20.89 or -1.6%

Dow In GOLD$ : $174.22
Change : $ (5.10) or -2.8%

Dow in GOLD oz : 8.428
Change : -0.247 or -2.8%

Dow in SILVER oz : 350.36
Change : -4.95 or -1.4%

Dow Industrial : 12,058.02
Change : -168.32 or -1.4%

US Dollar Index : 77.02
Change : 0.131 or 0.2%

At long last the GOLD PRICE broke through resistance around its 3 January top at $1,422.60, and scooted. The SILVER PRICE, thankful for the confirmation, blasted into new high ground. This is a "Get Out Of The Way Day".

The GOLD PRICE has been fighting that resistance for the last five days, and today smashed through. Overnight gold crouched below $1,415, then about 6:00 a.m. (Eastern time) burst to $1,419, traded sideways to build strength, then bulled its way through to 1423. It backed off a little to get a running start, then beat down the $1,425 gate and made a new all time intraday high at $1,432.56. Comex close came at $1,430.70, up $21.40, a good sign since it backed off very little from its intraday high.

Thinking on targets, it's hard to imagine gold stopping short of $1,500, maybe $1,550, before this run ends. Tomorrow it might back off a little, but as long a it doesn't close lower than $1,422.60 it intends to hold on to its gains.

On the five day chart since Thursday the SILVER PRICE has made the same sort of stubborn, steady, uninterrupted advances that it has been pursuing since last July. It demolished resistance at 3400c, never to be repaired. My feeble old memory says that back in 1979-1980 -- we have to dig back that far to find silver trading at these heights -- that a jiggle of trading stands at $34.50 and another jiggle at $39.50. By "jiggle" I mean a short interruption of an otherwise vertical rise. That is ANCIENT support/resistance, but those things have a way of avenging themselves even over long years, like Scotch-Irish nursing a grudge. The jiggling was all on the coming-down side, not the going-up.

Not any point in talking about 3450c, since silver's high today was 3467c, and it closed on Comex up 61.2c at 3441.6c. Looks like silver can deal with that one. Up above that leaves 3950c.

The GOLD/SILVER RATIO might give us some guidance. A 40:1 ratio and a 3950c silver high takes gold to $1,580 -- plausible. Gold at $1,500 with a 40:1 ratio yields silver at 3750c, and yes, there is also an ancient jiggle peak there, too.

Over the course of this bull market silver has usually topped in February, March, or May. If this rally runs into May, well, I have no idea what it might reach. I warn y'all, however, to view this soberly. Everybody loves a Fun Run, but nobody likes the clean-up, and when this rally ends there will be one huge mess to clean up. Silver will take a big hit, and so will gold, and the market will be slow and disappointing for months afterward.

But why throw ice-water on the party-goers? Y'all go ahead, dance, have a good time. Just keep your shoes on and keep listening for that midnight bell.

Rally will continue as long as GOLD does not close below $1,422.60 or SILVER below 3400c.

Now I begin to wonder if markets aren't coming right-side up again after hanging so long upside down. Gold and silver are supposed to move together and opposite the US dollar OVER THE LONG TERM, while stocks ought to run contrary to silver and gold, although for the past many months they have been running with metals. Of course, over the very short term, a few days or weeks, anything can happen.

'Twas a bad day for stocks and for the Nice Government Men who run the Stock Levitation Department. The Dow gave up 168.32 points to wind up at 12,058.02, which I believe I remember was last week's low close. A break through 12,000 will look like an avalanche beginning in the Alps.

While the Dow lost 1.57% the S&P500 lost 1.97% today, off 20.89 points at 1,306.33. I know it's ill-mannered to say, "I told y'all so", but can I get away with Veritas filia temporis -- truth is the daughter of time? For your financial health's sake, stay away from stocks. In the World of Investment Nutrition, they are the Big Mac with fries fried in GMO canola oil and a Jacuzzi-sized diet drink.

US DOLLAR INDEX rose 13.1 basis points to 77.020. I've been reading today about an accounting change the Federal Reserve slipped through for its balance sheet lately. Seems that it shoves all its losses on assets it holding -- like bonds or mortgage securities -- off into a category other than Capital. This is pretty neat, since it means that its balance sheet can NEVER become insolvent.

Now what does that tell you? Think. Y'all remember about 5 or 6 years ago the Fed stopped reporting M3 Money Supply. Suspicious soul that I am, I figured they were "burying the corpse in advance." That is, they KNEW they were going to puff up the money supply, so they pulled M3 to make it impossible to compare NOW with THEN. Now why would they be gussying up their balance sheets with tricks to hide insolvency unless. . . You tell me. Couldn’t be they foresee a need for significantly more inflating?

Disheartening is that they are arrogant enough to believe that wet cardboard tricks will do to fool the public, and generally they do. Mercy! The Fed itself is a wet cardboard trick. Poke your finger at it and it pushes clean through.

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.