Thursday, October 06, 2011

Silver and Gold Prices Remain in a Correction in an On-going Primary Uptrend (Bull Market)

Gold Price Close Today : 1651.90
Change : 11.60 or 0.7%

Silver Price Close Today : 31.970
Change : 1.653 or 5.5%

Gold Silver Ratio Today : 51.67
Change : -2.435 or -4.5%

Silver Gold Ratio Today : 0.01935
Change : 0.000871 or 4.7%

Platinum Price Close Today : 1515.60
Change : 19.60 or 1.3%

Palladium Price Close Today : 606.50
Change : 29.50 or 5.1%

S&P 500 : 1,164.97
Change : 20.94 or 1.8%

Dow In GOLD$ : $139.20
Change : $ 1.34 or 1.0%

Dow in GOLD oz : 6.734
Change : 0.065 or 1.0%

Dow in SILVER oz : 347.93
Change : -12.92 or -3.6%

Dow Industrial : 11,123.33
Change : 183.38 or 1.7%

US Dollar Index : 78.53
Change : -0.393 or -0.5%

Today stocks, GOLD, and SILVER built on bottoms struck on Tuesday and Wednesday. Dollar stumbled again.

Having finished the first leg of a rally, the Dollar Index is correcting. Right now its trading 78.526, down 39.3 basis points or 0.51%. None of this clouds the dollar's rally picture. It's quite overbought, so is experiencing merely a routine correction It will come back, doubt it not.

Nothing has changed on the euro's chart, although today it rose 0.68% to 1.3438. Still looks sorry as gully dirt, but may rally to the 20 dma, now 1.3564, or to 1.3800, the bottom line of the trading channel it broke down from.

Around the globe the Japanese yen still has made no decision and continues dancing sideways with its 20 dma. Closed today at 130.49c/Y100 (Y76.63/$1), up 0.17%

The GOLD PRICE added $11.60 to yesterday's Comex close to settle the day at $1,651.90. Back on 3 October gold closed $1,655, only to fall off the next day. That $1,655 area is the resistance to beat right now. The GOLD PRICE will likely pierce that tomorrow and push toward the next barrier at $1,675.

At $1,675 the GOLD PRICE will meet the top boundary of the flag it has formed since 26 September, AND it will run head on into the downtrend line from the September $1,923.70 peak. If gold can break through that strong resistance, it could rise to $1,725 very quickly, scattering the shorts like quail in an open field, and yet fall back once again.

I am still not satisfied GOLD has done sufficient penance. We may see lower lows yet.

SILVER is showing tighter and tighter supply, with wholesalers quoting delays now even on US 90% silver coin. That certainly implies higher prices, but I could write off silver's gain today -- up 165.3c to close Comex at 3197c) -- as merely a rally to the top of the flag it has formed. Breaking through 3100c earns my respect, but can the SILVER PRICE break 3350c? I know, I know, it sounds like I'm constantly moving the goal line back, but in truth nothing has happened until the SILVER PRICE beats 3350c, and pushes up to 3900c. In it favor, however, are tightening supplies and rising premiums, and a most overbought condition in the RSI and MACD.

SILVER and GOLD PRICES remain in a correction in an on-going primary uptrend (bull market). More downside is likely before the correction ends. I may be wrong as a tuxedo at a cockfight, but I reporting what I see.

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.

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.