Tuesday, April 05, 2011

Gold Price Chart Points to a $100 Rise to $1535

Gold Price Close Today : 1451.80
Change : 19.60 or 1.4%

Silver Price Close Today : 39.175
Change : 69.1 cents or 1.8%

Gold Silver Ratio Today : 37.06
Change : -0.156 or -0.4%

Silver Gold Ratio Today : 0.02698
Change : 0.000113 or 0.4%

Platinum Price Close Today : 1794.40
Change : 9.40 or 0.5%

Palladium Price Close Today : 788.75
Change : 4.95 or 0.6%

S&P 500 : 1,332.75
Change : -0.15 or 0.0%

Dow In GOLD$ : $176.47
Change : $ (2.49) or -1.4%

Dow in GOLD oz : 8.537
Change : -0.120 or -1.4%

Dow in SILVER oz : 316.37
Change : -0.22 or -0.1%

Dow Industrial : 12,393.75
Change : -6.28 or -0.1%

US Dollar Index : 75.88
Change : -0.035 or 0.0%

The GOLD PRICE slapped its gainsayers silly today, adding $19.60 today AND closing above $1,451 at $1,451.80. The 5 day chart plainly shows an explosive blowout through $1,440. What may be an inverted head and shoulders on gold's chart points to a $100 rise, say to $1,535 or so.

Buy the breakout! That's the rule.

The SILVER PRICE did not allow gold to outrun it today. But it was a close race. The gold/silver ratio fell slightly, to 37.059 as silver rose 69.1c (1.8%!) to 3917.5c.

From below silver must not close below 3800c or 'twill wreck its uptrend. 3950c brings us to resistance/support 31 years old. Based on the sinewy strength of this present rise, I must expect silver to punch through 3950c - 4000c and race another two dollars.

Once again, buy the breakout.

In case y'all missed the message yesterday about the bakery QC supervisor, y'all have to distinguish between cookies with holes and donuts. This is a sure-enough donut, a bull market, not a bubble. Buy it.

Think on this. The average Gold/Silver Ratio from 1900 thru 2010 is 47.50. The 2000 - 2010 average is 60.53. The ratio at today's 37.059 is more than three standard deviations below that mean. If you know Tchebyscheff's Theorem, or even if you don't, that's a very unusual reading. That alone points to some large correction, but not yet. Not yet.

Stocks today posted the first half of a key reversal, namely, a rise to a new high coupled with a lower close. Now this was not by much, but if the second half appears tomorrow -- a lower close -- then stocks will have reversed. Dow closed down 6.28 to 12,393.75 while the S&P barely moved, dropping 0.15 points to 1,332.75.

Proof is in the picture. Look at www.nasdaq.com for daily charts. Stocks started out down, climbed the hill to peak about 1:30, then steadily walked down the hill to close lower.

Investing in stocks at this point resembles carrying water in a split white-oak woven basket. It looks really pretty and crafty, it just don't hold much water.

US DOLLAR INDEX is stubbornly going nowhere. Fell 3.5 basis points today to end at 75.877. Day toted up a failure for the dollar, because it tried to escape gravity by rallying to 76.152, but gravity took its revenge. Down below the dollar must remain above 75.70 or slide a long and painful way. As I suspected and adumbrated yesterday, the euro rolled over today, closing about where it closed yesterday but rounding its peak. Euro may have reached its apogee for this move. Closed. at 1.4221 today. Yen struggleth still, today at 84.82Y/$ (117.90c/Y).

On this day in 1603 the new king of England, James I (Stewart) departed Edinburgh to take up his throne in London. His legs were so weak that he had to be held up on both sides when he dismounted his horse, and beside that, he was not (as my wife might tactfully say) a nice person. After nearly 50 peaceful years under Elizabeth, the Stewarts would torment England, Scotland, Ireland, and the world for the next 86 years. Somehow not a one of them could get it right.

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.