Wednesday, May 25, 2011

Gold Price Momentum Remains Momentarily Up, But Must be Confirmed

Gold Price Close Today : 1526.60
Change : 3.40 or 0.2%

Silver Price Close Today : 37.640
Change : 1.519 or 4.2%

Gold Silver Ratio Today : 40.56
Change : -1.611 or -3.8%

Silver Gold Ratio Today : 0.02466
Change : 0.000942 or 4.0%

Platinum Price Close Today : 1780.50
Change : 14.50 or 0.8%

Palladium Price Close Today : 740.40
Change : 2.85 or 0.4%

S&P 500 : 1,320.47
Change : 4.19 or 0.3%

Dow In GOLD$ : $167.84
Change : $ 0.16 or 0.1%

Dow in GOLD oz : 8.119
Change : 0.008 or 0.1%

Dow in SILVER oz : 329.29
Change : -12.78 or -3.7%

Dow Industrial : 12,394.66
Change : 38.45 or 0.3%

US Dollar Index : 75.89
Change : 0.100 or 0.1%

STRONG day for the SILVER PRICE, not so strong for everything else.

Although both SILVER and GOLD PRICES rose today, they didn't exactly agree. The GOLD PRICE rose a modest $3.40 to close Comex at $1,526.60. Yes, yes, higher than yesterday but not clear of that $1,525 resistance area. Tried once to clear it and stopped at $1,532. Today's work doesn't precisely disqualify gold from advancing tomorrow -- after all, it might reasonably have trouble with that $1,525 resistance for a day or so. However, on a longer term chart it has that double-toppy look with that last peak at $1,526.20 (intraday).

If the GOLD PRICE intends to climb more, tomorrow it will need to close above $1,530. Trading below $1,518 will hurt, and below $1,505 will positively wound. The gold price remains above its 20 DMA (1,512) so momentum remains momentarily up, but must be confirmed.

The silver price got into the liquor cabinet today and went hog wild. Gained 151.9c on Comex to wind up there at 3764c. Overnight the silver price wrestled with and hogtied 3650c, then beat feet for 3800c. High today came at 3797c and low at 3626c.

The silver price has now come plumb up to its 20 dma (3773c) first tripwire of an upmove. Just above at 3905c hovers the 50 DMA. If silver could clear BOTH of those, every speculator in the world would come running to buy. That's why 3900c is critical, and liable to become the Rally Stopper. Arguing against that are momentum indicators which have reversed to point upward.

The silver price will no doubt probe tomorrow toward that 3900c barrier, but I do doubt it will surmount that barrier. BICBW

Want to know what I meant yesterday about 40 miles of dominos falling when Greece defaults? Read this:

US DOLLAR INDEX didn't bother exercising today, but bounced between 75.75 and 76.256 like a sleepy moth in a gallon jug, finally landing about 75.90. Dollar has done nothing but establish 75.80-ish as support. If it falls through that all the work done earlier this week will evaporate. Still, it made a bottom and is trending up, so ought to resolve to the upside.

Euro dropped a bit today, closing 1.4095, a mostly symbolic drop, but in the grips of a plunge. 'Twill resume. Yen closed at Y82.,10/$ (121.80c/Y100), earning neither cheers nor jeers.

STOCKS peeked above 12,400 resistance as if trying to make up a mind to rise, but remaining unconvinced. High today came at 12,440, about where resistance stands for the past three days, with one toe one skosh over the line. Dow at least turned around and instead of losing gained 38.45 to end at 12,394.66. S&P gained 4.19 to 1,320.47.

Stocks have probably turned up, but a close tomorrow beneath 12,300 gainsays that and sends them tumbling.

Up, down, I don't care which way they go. Doesn't attract me any more than signing up for kazoo lessons in Kazhakstan -- it's a bear market and I never want to own a bear market.

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.