Monday, August 29, 2011

Strong Pockets are Ready to Buy Gold Anywhere Under $1,750

Gold Price Close Today : 1788.40
Change : (5.70) or -0.3%

Silver Price Close Today : 40.546
Change : (0.406) or -1.0%

Gold Silver Ratio Today : 44.11
Change : 0.298 or 0.7%

Silver Gold Ratio Today : 0.02267
Change : -0.000154 or -0.7%

Platinum Price Close Today : 1824.00
Change : -8.70 or -0.5%

Palladium Price Close Today : 756.15
Change : -5.85 or -0.8%

S&P 500 : 1,210.08
Change : 33.28 or 2.8%

Dow In GOLD$ : $133.38
Change : $ 3.37 or 2.6%

Dow in GOLD oz : 6.452
Change : 0.163 or 2.6%

Dow in SILVER oz : 284.60
Change : 9.04 or 3.3%

Dow Industrial : 11,539.25
Change : 254.71 or 2.3%

US Dollar Index : 73.69
Change : -1.010 or -1.4%

The GOLD PRICE backed off last Friday's panic/euphoria and fell $5.70 on Comex to close at $1,788.40, still above crucial $1,750 support.

Last week's double key reversals still scream that very strong pockets are ready to buy gold anywhere under $1,750, and the closer it gets to $1,700, the deeper they dig in their pockets. Short term support now stands at $1,775: any nose-poke below that will carry gold to $1,750. Up above $1,800, $1,825, and $1,850 place barriers to any rise.

Maybe that tumble last Wednesday marked the top of gold's rally- or maybe NOT. Gold will tell us this week.

What you are watching is the Nice Government Men trying to transmogrify a raging panic into a "slow burn panic." Not as exciting, but lasts longer.

Today the SILVER PRICE traded in a range between 4135c and 4028c. Comex dropped off 40.6c. The SILVER PRICE has traced out a range between 4150c and 4000c. It may be rolling over to the downside, but has to break 4000c first, and fight a tough battle to sink through all that support between 4000c and 3880c

In both SILVER and GOLD PRICES we may be entering another frustrating trading range period like the one from 1 May through mid-July. If we are watching a correction, then the GOLD PRICE will target its 50 DMA ($1,644) and silver it's 200 DMA (now 3488c). This week will instruct us. Gold/Silver ratio rose again to 44.108, near the range top. That whispers trouble for silver, but rising stocks (rising risk appetite) whispers sweet dreams for silver. Picture simply isn't clear yet.

I hope all y'all on the east coast survived the hurricane well and sound. Meanwhile, storms continue to blow through markets.

Dow today broke through 11,300 resistance to close at 11,539.25, up 254.71 or 2.26%. S&P500 rose more, 33.28 points (4.75%) to 1,210.08. This brings the Dow up to the mid-August intraday high at 11,529.67, and clears the 20 day moving average at 11,260, but remains far below the 200 DMA at 11,988. Next resistance comes at 11,862.53, intraday low in June. But greater resistance lurks between 11,900 and 12,100. By no means am I convinced that stocks are about to shoot for the moon. Rather, the Dow might just as easily collapse again at 11,550/11,600 and resume its fall. Either it is now bumping up along the bottom of the Jaws of Death megaphone formation, or it will rise to the neckline of the Head and Shoulders top around 12,000. Either way, bodacious new prices lie not in its future.

Stocks -- the Ghost of Christmas Past visiting you in your sleep.

US DOLLAR INDEX dropped a nothing 10.1 basis points (0.13%), and remains in its tight trading range. Must violate 73.40 to move lower.

In Europe today they were smoking more crack. How do I know? The Euro rose to a new high for the move at 1.4506, up 0.06%, but remains range bound. If it ever breaks out upside, it might be tomorrow. Nothing has changed in the Hall of Illusions. Yen finally dropped a bit, down 0.28% at 130.09c/Y100 (Y76.87/$).

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.

Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.