Friday, June 10, 2011

Silver and Gold Prices Set up For Lower Prices Next Week

Gold Price Close Today : 1,528.60
Gold Price Close 3-Jun : 1,541.70
Change : -13.10 or -0.8%

Silver Price Close Today : 3632.6
Silver Price Close 3-Jun : 3618.7
Change : 13.90 or 0.4%

Gold Silver Ratio Today : 42.080
Gold Silver Ratio 3-Jun : 42.604
Change : -0.52 or -1.2%

Silver Gold Ratio : 0.02376
Silver Gold Ratio 3-Jun : 0.02347
Change : 0.00029 or 1.2%

Dow in Gold Dollars : $ 161.63
Dow in Gold Dollars 3-Jun : $ 162.93
Change : $ (1.30) or -0.8%

Dow in Gold Ounces : 7.819
Dow in Gold Ounces 3-Jun : 7.882
Change : -0.06 or -0.8%

Dow in Silver Ounces : 329.02
Dow in Silver Ounces 3-Jun : 335.79
Change : -6.77 or -2.0%

Dow Industrial : 11,951.91
Dow Industrial 3-Jun : 12,151.26
Change : -199.35 or -1.6%

S&P 500 : 1,270.98
S&P 500 3-Jun : 1,300.16
Change : -29.18 or -2.2%

US Dollar Index : 75.600
US Dollar Index 3-Jun : 73.727
Change : 1.873 or 2.5%

Platinum Price Close Today : 1,832.20
Platinum Price Close 3-Jun : 1,813.70
Change : 18.50 or 1.0%

Palladium Price Close Today : 815.70
Palladium Price Close 3-Jun : 781.75
Change : 33.95 or 4.3%

Weekly scoreboard is a mite glum. The SILVER PRICE went nowhere, the GOLD PRICE dropped, stocks took a hit, but the US dollar index appears to have turned up.

'Twas a painful day for SILVER and GOLD, not wrecking their charts but certainly setting them up for lower prices next week.

The GOLD PRICE has rolled over in a second and lower top since its 2 May high. Unless it can better that last 1,546.75 high, 'twill head lower. The whole range from $1,530 to $1,515 is weaker or stronger support, but $1,515 will probably serve as the watershed. Fall through that, and gold keeps on falling a ways.

Here are some milestones: 50 DMA stands at $1,503.25 (as does $1,505 support); 20 DMA at $1,522.54. Watch those levels.

After a high of $1,544.35 and a low of $1,526.50, gold closed Comex near the bottom of its range at $1,528.60, down $13.50. Both gold and its momentum indicators are pointing down, down.

The SILVER PRICE took the deep wound today, losing 109.7c to close 3632.6c on Comex. That low brings the silver price nearly into contact with its 20 DMA (3626c) and sets silver up for a fall through 3600c and lower prices.

Of course I'm only a NBFFT, but to mean it looks like both silver and gold are completing the correction begun at the end-April highs. They made that first leg down of an A-B-C correction, rallied in the B-wave, and now, having shot that bolt, will drop into the bottom of their C-wave and polish off the correction. These lows should materialize between now and end June for gold, by end-July for silver.

Of course, if the blockheads who run the financial system manage to lose their grip in Europe and let Greece slide into default because they insist on stealing even the copper pipes in Greek bathrooms, well, no telling what would happen then. The SILVER PRICE would take it harder than GOLD, euro would tank, and gold and silver would extend their correction a "right smart", as my grandmother used to say.

Yo! You there! Lift up your gaze to the horizon, and square those shoulders! Silver and gold remain in a bull market with another 3 - 10 years. It's only a correction, so gird up your loins and keep running the race.

The value of stocks against gold, portrayed by the Dow In Gold Dollars (DiG$), has technically broken down but not followed through. Not much is needed to push it over the cliff.

STOCKS today found the trap door to that mineshaft running to the earth's core, and stepped clean thru it. Dow dropped 199.35 points (1.42% for the day) to 11,951.91. That punctures the 12,000-ish support. S&P500 lost 18.04 (1.4%) to close at 1,270.98.

Now I'm just a natural born fool from Tennessee, but I do have a straight-edge. Laying that thing across the Dow's lows since March 2009, it sure enough looks to me like ["as if," should you prefer, but "like" works equally well for me as a preposition or subordinating conjunction] the Dow has broken down through its uptrend line. Same holdeth true if you draw your uptrend line from the June 2010 low forward.

Should this merely prove a correction, as it might, then it must stop near the 200 day moving average, now 11,687.

Imagine that you have a big Dodge pickup with that fine Cummins diesel engine. Now imagine that stocks are a gallon of gasoline in a jug in your pickup bed, and you're pulled over on the side of the road with your fuel gage on "Empty."

US DOLLAR INDEX surprised everybody today by floating straight into the sky, proving that Tuesday/Wednesday formed a rounding bottom for a turnaround. Dollar confirmed that with a close above 74.50 support/resistance, and by closing above its 50 (74.78) and 20 (75.11) DMA's at 75.60, up 110 basis points (1.48)%.

What does that say? Well, until the dollar passes beyond 76.16, it might amount to no more than a rally in a downtrend. However, the other interpretation is that the Dollar index bottomed on 2 May at 72.95, made a higher low at 73.89 this week, and now intends to knock on the door of 78.60 at least, or maybe stop at its 200 DMA (77.62).

Whatever the dollar does, it slapped the snot out of the Frankenstein euro today (who do you pull for in THAT fight?). Euro closed at 1.4338, down 1.16%. That leaves the euro with a set of lower highs and a down trend. Japanese yen closed today at Y80.30/$ (124.53c/Y100). Yen this week posted a double top with May's high, which ought to put the Japanese Nice Government Men into high gear manipulating the yen downward.

Y'all enjoy your weekend.

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.