Friday, April 01, 2011

Expect Higher Gold Prices Next Week

Gold Price Close Today : 1,428.10
Gold Price Close 25-Mar : 1,419.90
Change : 8.20 or 0.6%

Silver Price Close Today : 3773.7
Silver Price Close 25-Mar : 3709.7
Change : 64.00 or 1.7%

Gold Silver Ratio Today : 37.84
Gold Silver Ratio 25-Mar : 38.28
Change : -0.43 or -1.1%

Silver Gold Ratio : 0.02642
Silver Gold Ratio 25-Mar : 0.02613
Change : 0.00030 or 1.1%

Dow in Gold Dollars : $ 179.15
Dow in Gold Dollars 25-Mar : $ 177.58
Change : $ 1.57 or 0.9%

Dow in Gold Ounces : 8.667
Dow in Gold Ounces 25-Mar : 8.591
Change : 0.08 or 0.9%

Dow in Silver Ounces : 327.97
Dow in Silver Ounces 25-Mar : 328.81
Change : -0.84 or -0.3%

Dow Industrial : 12,376.72
Dow Industrial 25-Mar : 12,197.88
Change : 178.84 or 1.5%

S&P 500 : 1,332.41
S&P 500 25-Mar : 1,310.19
Change : 22.22 or 1.7%

US Dollar Index : 75.854
US Dollar Index 25-Mar : 76.195
Change : -0.34 or -0.4%

Platinum Price Close Today : 1,768.50
Platinum Price Close 25-Mar : 1,745.50
Change : 23.00 or 1.3%

Palladium Price Close Today : 774.50
Palladium Price Close 25-Mar : 744.30
Change : 30.20 or 4.1%

In the teeth of all the week's up and down, silver and gold as well as the white metals (platinum and palladium) were net gainers on the week. So was the stock market. The US Dollar, on the other hand, is going out of this world backwards, as my father-in-law used to say.

The US DOLLAR Index today burst its chains at 76.15 and spiked to 76.61. Just as quickly, it sank like a wrench in a barrel of used motor oil, WHAM! Right down to 75.783. Right now its trading 14.6 basis points lower than this time yesterday, namely, 75.854.

Strange, almost as if the Nice Government Men had slammed down their coffee cups, gawked at their computer screens, and massively sold dollars. Whoever did it, 'twas a solid job, and leaves the dollar's fate hanging again in the balance: will it rally or continue falling to 70.70 again? Like a mirror image, the euro went the other way, down first, then rallying to close at 1.4225, up 0.41%. The yen fell off a cliff, gapping down from above 120c/Y (83.3Y/$) to 119, then crashing clean to 118, but closing at 118.98c/Y (84.05Y/$). Yen has now sunk to December low, way below its 200 DMA (119.43/83.731).

The Dow actually made a new INTRADAY high for the move today at 12,419.71. The Dow gained 56.99 to close at 12,376.72 while the S&P 500 rose 6.58 to 1,332.41. Will stocks continue to better their numbers? Fine with me if they do, but I won't be riding that horse. Stocks remain in a primary downtrend, and have another 5 years or more to run in that mode. I don't buy falling markets.

But don't listen to me, even though I think that stocks are the Edsel or Yugo in the Investment Automobile Market. Yes, an Edsel will go fast, and a Yugo is cheap, but . . . .

The GOLD PRICE presented the mirror image of the dollar. Overnight it was trading between $1,432 and $1,436, then come New York open it sank like a lump in a churn, clean straight down. This kept up until it hit $1,414.40, then gold climbed manfully above $1,425, backed off a tiny bit, and resumed its relentless upward course. On Comex gold lost $10.80 to close at $1,428.10.

For the week gold actually rose $8.20. Whoever the enemies of gold might have been, their attack failed today. Not only were they unable to drive gold below $1,410, they couldn't even prevent its rallying over $1,425. Gold's rally to higher prices -- above $1,438 -- remains in play.

It's only my opinion, but I expect gold to post higher prices next week.

The way people think always interests me: they love to buy a winner. I reckon that's what makes markets work. Now the silver-come-lately are talking about the SILVER PRICE rising to $200 by the end of next week, and somebody told me even the grandiose and melodramatic Jim Cramer has been recommending physical silver. What?!

Back when silver cost $4.02, then $5, then $8, I was begging people to buy, but most of them had clogged otic nerves. Now everybody wants to buy.

I reckon that's what drives markets.

SILVER was not intimidated today. Sure, when Comex closed it had dropped 13.5c to 3773.7c , but since it had been driven as low as 3709c today, the close looked strong, not weak.

Silver remains in the same range: above it must conquer that mountain at 3800c. Below it must not drop below 3700c.

Clearly we stand athwart a wild rally, but forward motion has stalled. Today's marginal new high in gold, followed the next day by a fall, makes the words "double top" bounce between my ears. Yet gold would also act in the same manner, attacking that $1,438 gate over and over, if it intended to move higher.

It's silver and the gold/silver ratio (made another new low today) that point gold to higher prices. I have to report the chart: it doesn't show any sign of topping. Yes, I would change my mind if silver dropped below 3640c, but barring that I expect to see much higher prices next week.

On this day in 1572 the Sea Beggars, Dutch sailors fighting for independence, landed in Holland and captured Briel. Few nations can match the glorious courage the Dutch showed in their 50 year fight to make good their independence.

MILESTONES OF AMERICAN CULTURE. On this day in 1929 Louie Marx introduced the Yo-Yo.

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.