Tuesday, March 22, 2011

Gold Price Must Close Clean Through $1,435, Then Advance to $1,451

Gold Price Close Today : 1427.50
Change : 1.30 or 0.1%

Silver Price Close Today : 36.271
Change : 0.269 cents or 0.7%

Gold Silver Ratio Today : 39.36
Change : -0.258 or -0.7%

Silver Gold Ratio Today : 0.02541
Change : 0.000165 or 0.7%

Platinum Price Close Today : 1740.30
Change : -6.60 or -0.4%

Palladium Price Close Today : 737.90
Change : -9.50 or -1.3%

S&P 500 : 1,293.77
Change : -4.61 or -0.4%

Dow In GOLD$ : $174.04
Change : $ (0.40) or -0.2%

Dow in GOLD oz : 8.419
Change : -0.019 or -0.2%

Dow in SILVER oz : 331.36
Change : -0.52 or -0.2%

Dow Industrial : 12,018.63
Change : -17.90 or -0.1%

US Dollar Index : 75.45
Change : 0.044 or 0.1%

As I expected, the GOLD PRICE didn't do very much today, merely moved sidewise. Sure, it gained $1.30 on Comex, and defended an attack all the way down to $1,419.90, but it snapped right back to close at $1,427.50.

That does not qualify as a rousing, unequivocal breakout over $1,425, but considering where gold was coming from in a long rise, it saved face.

Stakes are very high here. Either gold closes clean through $1,435, then advances to $1,451 (2% above the 3 January high), or it has formed a broadening top. That consists of a series of slightly higher or even highs, accompanied by slightly lower lows, so that the chart shows a megaphone opening to the right. Should that be what gold has in mind, then it has quite a correction in store. However, it would need to close below the last low, $1,308, to confirm that.

So gold is stuck in between, and we can't say whether it will rise or fall unless it closes above $1,436 or below $1,420.

If I had to guess, I'd say gold will rise, but I'm just a natural born fool, just guessing.

The SILVER PRICE added another 26.9c today to close at an altogether new high of 3627.1c. That close also took the gold/silver ratio to a new low, 39.36, marginally.

Silver above 3650c will run away like half-broke horses pulling a steel-wheeled wagon over gravel. Below 3540c silver will act like the water in your bathroom sink when you pull the plug.

Right now, the momentum favours higher prices.

Think and recall: primary uptrend. Bull market. Several more years for silver and gold to rise. Don't let go of that, no matter how markets bounce up and down.

Here's another interesting but small fact: the wholesale buy side discount on US 90% coin rose today from 75c to 70c. A tiny sign, but may prove meaningful.

Stocks aquitted themselves most raggedly today. Down as much as 36 points, the Dow in the end climbed the last of four hills to close down only 17.9 points at 12,018.63 (S&P500 lost 4.61 at 1,293.77). Yet again the Dow deals with the magical 12,000, so fraught with juju in the investment jungle.

Appears that yesterday marked the limit of stocks' recovery from the 11,555.48 low of the last downleg. Strengthen that notioning, the Dow closed below its 50 DMA (12,029), and more, volume dried up yesterday, never a good sign for a rising market. Finally, it remains below the downtrend line from the February high. This could be worse -- we could tie anchors and ploughshares about its ankles -- but it's quite bad enough as is. Only hint it might rise lies in the MACD, where the Dow may be struggling to turn up.

Imagine a lottery where not only do you have to pay for a ticket, you have to pay the winner as well. That's stocks. Stay away.

Idea keeps fidgeting in my head that the Japanese earthquake shook stock markets world-wide and they may not recover soon. Nikkei closed today at 9608, down form a 10,891 February high by almost 12%.

The Nice Government Men from many nations have put their heads together and seem to be jimmying the Yen market nicely. Eded down today 0.07% at 80.91 yen to the dollar (123.59 cents to 100 yen). They have beaten it back from the deadly 124 boundary.

THE US DOLLAR INDEX added a scootsh today, 4.4 basis points to 75.445. Here we go again. The buck stands at its November low, and will either find footing in a double bottom or sink clean thru that mark in a race toward, first, 74.23 (Nov. 2009 low) or 70.70 (2008 low).

It's ridiculous trying to forecast a currency exchange rate technically, because central banks manipulate all rates. The dollar has sunk from 120 in 2001 to 70.70 in 2008. Y'all think that happened by accident to a bank that can print or withdraw as many dollars as it pleases? It happened because somebody in the Bush (and now Obama) regime decided to let the dollar depreciate. What? You, there! Mushroom! You object to that policy? You whine that it will pauperize orphans and widows and pensioners? Quiet, mushroom! You can't make a central bank omelette without breaking eggs, and if you're not careful, we might just throw in some mushrooms, too.

On this day in 1765 the English parliament passed the Stamp Act, the first direct tax on American colonists. It was NOT popular, and parliament repealed it a year later.

Speaking of stamps, they tell a fairly accurate tale of inflation. When I was a boy, a first class stamp cost 4 c. On this day in 1981 stamps went from 15c to 18c. On this day in 2002 (I think this is National Raise Postage Rate day) the rate was raised from 34c to 37c. Today it costs 44c, and congress ain't about to repeal that.

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

- Franklin Sanders, The Moneychanger

© 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.