Thursday, June 30, 2011

Next Plunge Should Carry Gold Through $1,490 to $1,460 -- UNLESS Gold Closes Above $1,510

Gold Price Close Today : 1502.30
Change : (7.60) or -0.5%

Silver Price Close Today : 34.812
Change : 0.062 or 0.2%

Gold Silver Ratio Today : 43.15
Change : -0.296 or -0.7%

Silver Gold Ratio Today : 0.02317
Change : 0.000158 or 0.7%

Platinum Price Close Today : 1723.70
Change : -1.70 or -0.1%

Palladium Price Close Today : 748.45
Change : -5.00 or -0.7%

S&P 500 : 1,320.64
Change : 13.23 or 1.0%

Dow In GOLD$ : $170.82
Change : $ 2.97 or 1.8%

Dow in GOLD oz : 8.264
Change : 0.144 or 1.8%

Dow in SILVER oz : 356.61
Change : 3.76 or 1.1%

Dow Industrial : 12,414.34
Change : 152.92 or 1.2%

US Dollar Index : 74.38
Change : -0.309 or -0.4%

SILVER and GOLD couldn't agree today, silver up, gold down, and confusion is confusing.

The SILVER PRICE has traced out a long narrow triangle, then fallen down out of that triangle. So far the only puzzle piece missing there is a fall below horizontal support at 3350c. That comes next, unless the silver price blows thru 3600c.

Comex silver added 6.2c today to close at 3481.2c, and in the after market is trading lower, 3464.5c. Rally that began last Monday appears to have peaked overnight and rolled over today, pointing to lower prices tomorrow. 200 day moving average now at 3164c. Start buying when silver hits that mark. May go lower, but remember the ancient market proverb, discovered chiseled on a wall when they excavated Babylon:

Bulls get rich;

Bears get rich;

Pigs get slaughtered.

Silver is acting very strong, fighting any decline. Twill break in scary spurts, but is not now signaling any intention to plunge.

Another catchy development: discount on 90% silver coin shrank today from 105c an ounce to 88c an ounce. Usually behaves that way when silver is bottoming.

The GOLD PRICE fainted at $1,510 resistance, and fell to $1,502.30 on Comex, down $7.60. Trading in the aftermarket at $1,499.90, bad for morale. Next plunge should carry gold through $1,490 to $1,460 -- UNLESS gold closes above $1,510.

Y'all ought to keep that hammer cocked. Time to buy very soon, and I'm uneasy about telling y'all to hold off, cause that gold might not drop thru $1,490. Support at $1,460 and 200 DMA at $1,414.75.

Stocks today jumped over the DiG$'s 50 DMA (G$168.27 or 8.14 oz) targeting the 200 DMA, now G$172.61 or 8.35 oz. Headed higher, but not much higher. Top of the range that has ruled since March is G$179.84 (8.7 oz). Expect a straight up ride for stocks, which just as quickly will fall straight down. Roller coaster, anyone?

In dollar terms the Dow today also crossed its 50 DMA when it closed at 12,414.35 up 159.92 points or 1.25%. Last four days Dow has risen strongly. That doesn't say it will drop tomorrow, just gives notice that this rise has been running a long time.

S&P500 rose 13.23 to 1,320.64, up 0.92%.

Lo, all the starry-eyed but ill-informed optimists saw the Greek settlement (actually, half of a settlement, but never mind) and decided happy days were here again, buying euros (up 0.46% today to 1.4504) and stocks.

Sort of reminds me of those Purple Passion Parties fraternities used to throw when I was in college. They'd fill a garbage can with grapey-something and pure grain alcohol, 180 proof. Everybody just dipped to his or her heart's content, and for a while there it was one flyin', noisy, fun party. Then the enthusiasm wore off, the nausea took hold, and the Purple Puking began.

Stocks -- they're the Purple Passion in the Investment Bar. BICBW.

US DOLLAR INDEX is trading now at 74.382, down 30.9 basis points from yesterday or 0.4%. Have to confess I think today was the end of this particular downward reaction from the last (76) high. Two bottoms show up on the chart today about 74.25. We'll probably watch two or three days of slightly higher dollar index.

Euro cleared its 50 and 20 DMAs today, yen popped up to Y80.57/$ (124.12c/Y100), but neither sorry, rotten, scabby fiat currency will move much. They're just stepping out a Dance of Death with one another and the sorry, rotten, scabby fiat US dollar.

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.