Wednesday, October 26, 2011

The Gold Price Closed Up 1.4% Silver and Gold Will Keep Moving Higher Tomorrow

Gold Price Close Today : 1722.70
Change : 23.10 or 1.4%

Silver Price Close Today : 3329.1
Change : 25.7 cents or 0.8%

Gold Silver Ratio Today : 51.75
Change : 0.297 or 0.6%

Silver Gold Ratio Today : 0.01932
Change : -0.000111 or -0.6%

Platinum Price Close Today : 1591.70
Change : 25.70 or 1.6%

Palladium Price Close Today : 646.15
Change : 4.60 or 0.7%

S&P 500 : 1,242.00
Change : 12.95 or 1.1%

Dow In GOLD$ : $142.42
Change : $ 0.05 or 0.0%

Dow in GOLD oz : 6.890
Change : 0.003 or 0.0%

Dow in SILVER oz : 356.52
Change : 2.14 or 0.6%

Dow Industrial : 11,869.04
Change : 162.42 or 1.4%

US Dollar Index : 76.23
Change : 0.109 or 0.1%

Building on yesterday's 2.9% gain the GOLD PRICE added another 1.4% ($23.10) today to close $1,722.70 on Comex, nestled right beneath that $1,725 resistance.

Perched above the GOLD PRICE at $1,741.49 is the 50 day moving average, which will slow it down. However, today's close definitely breaks gold out above the upward sloping trading channel boundary in force since end-September.

As strong as GOLD looks, it will probably run higher than $1,750 before the rocket fuel runs out -- maybe $1,775. Once again, if gold does close above $1,800 for two days, then it has already left the starting gate for the next race up.

The SILVER PRICE knocked and pounded at 3400c today, even reached 3393, but couldn't break down the door. Daily chart has sketched a long, narrow triangle. Generally the further out into the triangle's nose a market trades, the less spectacular the eventual breakout. However, SILVER has been so strong -- rising 303.1c since 20 October -- that breaking through 3400c might sling it a long way.

How far? The 50 DMA (3643c) and the 200 DMA (3625) are about to cross, so I expect right there above 3600c silver will land in mud and alligators up to its hips.

SILVER and GOLD will keep on moving higher tomorrow.

I glanced at the Dow In Gold Dollars (DiG$) chart to check stocks' progress against gold. Short answer is, ain't none. Rallied off that August low about G$119 (5.757 oz) as high as G$151 (7.283 oz) two days ago. Why is that no progress? Well, it's correcting a fall from G$165 - $160 level, and yesterday it gapped down, and followed through downside today. Plain message? Stocks are headed DOWN against gold. Today $142,42 (6.89 oz).

Dow in Silver Ounces chart differs substantially, as it rose all the way from its August lows to its July highs -- in other words, retraced the entire fall. No surprise there, since volatile silver loses much more ground in a downward move than gold does. Closed today at 356.32 ounces to buy the Dow.

Looks like the Dow has near about run out of gas. Next big move will point toward the earth's core.

Sell stocks for gold. Sell stocks for gold. Sell stocks for gold. Don't want to do that? Sell stocks for silver.

Dow resistance at 11,900 remained undefeated today, but support at 11,700 held up, too. This tells us little, and could mark the beginning of a downtrend if a higher closed dows not violate the last two day's double top.

For most of the past three days the US dollar index has traded between 76 and 76.5, and more narrowly between 76 and 76.20. Half way thru today's 24 hours somebody knocked it down in a spike to 76.88, then it popped straight up to 76.66 and settled above 76.20 at 76.231, up 10.9 basis points (0.14%).

No change, except that blip up today makes it appear those last 2-1/2 days were a bottom, and the dollar's about to move higher.

Euro's five day chart looks like a plateau that it fell off of today. At today's close it stood at 1.3903, up mightily from 1.3902 yesterday. Trading was more volatile, but no big warning of change appeared. Eurocrats have as yet no "solution" to their bank solvency crisis. Don't expect one, either.

The Nice Government Men from the Bank of Japan have a problem on their hands. Yen backed off a smidge today, 0,.25% to 131.14 (Y76.25), but it has broken out to the upside. Needs to fall back below 130.50 (76.62) to disprove that breakout.

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 bubble has burst, primary trend down.

WARNING AND DISCLAIMER. 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 short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

One final warning: NEVER insert a 747 Jumbo Jet up your nose.