Wednesday, July 06, 2011

The GOLD PRICE Bettered Yesterday's Performance by Rising $16.40 to $1,528.70

Gold Price Close Today : 1528.70
Change : 16.40 or 1.1%

Silver Price Close Today : 35.911
Change : 0.509 or 1.4%

Gold Silver Ratio Today : 42.57
Change : -0.149 or -0.3%

Silver Gold Ratio Today : 0.02349
Change : 0.000082 or 0.3%

Platinum Price Close Today : 1727.20
Change : -14.00 or -0.8%

Palladium Price Close Today : 766.55
Change : -8.90 or -1.1%

S&P 500 : 1,337.56
Change : -0.32 or 0.0%

Dow In GOLD$ : $170.59
Change : $ (1.21) or -0.7%

Dow in GOLD oz : 8.252
Change : -0.059 or -0.7%

Dow in SILVER oz : 351.29
Change : -3.77 or -1.1%

Dow Industrial : 12,615.28
Change : 45.41 or 0.4%

US Dollar Index : 75.03
Change : 0.339 or 0.5%

With SILVER and GOLD we stand in great peril of misunderstanding either way: discounting a real rally, or crediting a spurious one.

The GOLD PRICE bettered yesterday's performance by rising $16.40 to $1,528.70, not quite closing thru that definitive $1,530 mark, but clearing $1,525. Sometimes those resistance/support areas don't lie exactly where you think. On gold's side for a breakout, it has traded clean through the 20 and 50 DMAs ($1,522.17 and $1,520.28). It did push as high as $1,533.60, and defended $1,510 handily at $1,509.90.

Chances are, today exhausted for the nonce gold's upward energy. Unless it punches thru $1,533.60 tomorrow, expect it to rest between $1,518 and $1,530 a day or two. Proof the past two days were merely an anomalous short-covering rally comes with any close below $1,500.

Otherwise we are faced with the conclusion that gold has already finally bottomed on Tuesday at $1,482.30.

The SILVER PRICE gobbled up another 50.9c and ran as high as 3625c but couldn't hold those heights. Comex closed at 3591.1c. Close, but no cigar, and in my mind that 3600c mark carries lots of weight. Silver remains above its 20 DMA (3541c).

This is the part of this job I dislike, not because I dislike making decisions but merely because they seem so momentous at the time, but are in truth minute. Do we buy silver at 3600c or 3300c, an 8.3% difference? Will that little difference really engage your attention at all when the silver price trades at US$106.50? Right, if 3304c was the low, then a reasonable target is 10650c. Yes, the 8.3% is important, but in the long run it won't be the difference between blood plasma and Gatorade, just between one teaspoon of sugar in your tea and one and a quarter.

Right now silver only needs to hold above 3550c, and can drop at most to 3360c.

Buy all you can on any retreat. I'm tired of waiting. I haven't totally shaken the hope we will see the 200 DMA (not 3186c) but that hope grows as dim as one of those blamed fluorescent light bulbs the government is now stuffing down our throats.

Silver and gold prices remain in a long term bull market. Forget the fluctuations, the only strategy in a bull market is to buy, and then buy more, never looking back.

On Friday the Dow in Gold dollars shot above the 200 DMA to G$175.48 (8.489 oz). The last two days the DiG$ has filled that gap up and collapsed nearly to the 50 DMA G$168.268 (8.14), closing today at G$170.59 (8.252).

What does all that mean? That stocks have shot their bolt against gold.

Today the Dow and S&P500 contradicted each other. Dow rose 45.41 (0.36%) to 12,615.28 in ragged trading but the SYP500, likewise ragged, closed 1,337.56, down 0.32.

Dow remains broken out above the downtrend line, so you have to count the trend still in force as long as it hasn't been contradicted. Nonetheless, I have no more desire to own stocks than I have to contract elephantiasis. Oh, what mourning, weeping, and gnashing of teeth await stock investors!

US DOLLAR INDEX keeps on ratcheting up, step by step. Today it crossed through 7470 and jumped over 75, and not tradeth at 75.025, up 33.9 basis points (0.44%). Some horizontal resistance awaits at 75.75 - 76, but inertia favours the dollar. It is trading above its 20 and 50 DMAs. May make slow progress, but will keep on progressing upward.

Euro and yen showed no cards today. All the euro's recent rallying only traced out a confirmation of the downtrend. Euro closed today 1.4317, down 0.74%. Yen closed Y80.95/$ (123.54c/Y100). All quiet there.

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.