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Monday, February 28, 2011

The Gold Price and Silver Price Are Going Higher, Once Gold Confirms Silver's New Highs

Gold Price Close Today : 1409.30
Change : 0.60 or 0.0%

Silver Price Close Today : 33.804
Change : 0.906 cents or 2.8%

Gold Silver Ratio Today : 41.69
Change : -1.130 or -2.6%

Silver Gold Ratio Today : 0.02399
Change : 0.000633 or 2.7%

Platinum Price Close Today : 1808.50
Change : 5.20 or 0.3%

Palladium Price Close Today : 796.65
Change : 6.10 or 0.8%

S&P 500 : 1,327.22
Change : 7.34 or 0.6%

Dow In GOLD$ : $179.34
Change : $ 1.35 or 0.8%

Dow in GOLD oz : 8.675
Change : 0.065 or 0.8%

Dow in SILVER oz : 361.68
Change : 2.74 or 0.8%

Dow Industrial : 12,226.34
Change : 95.89 or 0.8%

US Dollar Index : 76.85
Change : -0.506 or -0.7%

The GOLD PRICE and SILVER PRICE sent mixed signals today. On Comex silver claimed another 90.6 cents, climbing to 3380.4c. Gold, on the other hand, rose a massy sixty cents to $1,409.30. Now those closes made my mind itch, so I scrolled back through my closing prices and sure enough, I did recall something similar. On 7 February gold closed down seventy cents while silver rose 28.4c. Next day silver rose 92.3c and gold added $15.80. Whether that has any predictive value, I leave to y'all to work out.

Gold is the unsteadier partner. The five day chart chows a clear uptrend since last Thursday, but it's choppy and hard to parse. Today's low hit $1,404.80 while the high reached $1,416.10, not quite last Thursday's high.

No secret the GOLD PRICE still is struggling to clear $1,415 - $1,418 resistance, bulging down from that last high at $1,422.60. All will be well as long as gold doesn't stumble through today's low.

Y'all do understand the riddle here, don't you? Gold and silver are supposed to move together and confirm each other. Today was a non-confirmation, signaling that one partner or the other has got it wrong. Either silver should be rising, or gold should be flat lining. That tension will lead to a snap-back of some kind, whether higher or lower isn't clear, but since silver is behaving so garlicky, my dime is on higher prices.

The SILVER PRICE knocked so hard on 3400c today -- high was 3399c -- it liked to have blown out the top of the chart. Five day chart looks a little like a rising flat-topped triangle. Never mind, it appears ready to break through 3400c tomorrow. And what do you reckon all those croakers and critics and smart fellers with them Harvard MBAs up there on Wall Street are gonna do then? Why, they'll discover that silver is the smartest thing since sliced bread and they'll follow that trend like they always do. After 3500c, I can't even guess where silver might run. 3900c? More. Name a number higher, or it could drop like a rock tomorrow. Hot money don't hang around.

Bottom line: silver and gold are going higher. Once gold confirms silver's new highs by posting a new high itself, all the brakes will disappear.

If y'all will go to visit http://store.iotconline.com/index.php?search=sanders there you will find a DVD of my February presentation for the Institute on the Constitution's First Friday in Maryland, "The Only Cure for the Economic Depression, And It Ain't from Washington, DC." Costs ten Federal Reserve notes, a.k.a. "dollars."

To get a free list of specific things you personally can do in the next 30 days to help your local economy, see www.iotconline.com/content.php?136-Specific-Things-You-Can-Do-To-Help-Build-Your-Local-Economy-Starting-Today-Right-Now for free.

If y'all like surprises, you're going to love today.

US DOLLAR INDEX wasn't really a surprise, dropping 50.6 basis points (0.65%) to 76.853, on its way to lower realms. Well, hang on a minute. This makes a double bottom with the early February low at 76.88. I reckon that means the dollar index could claw and scrabble and grab hold here and rally, but I, for one, want to see it myself, before I believe anything. Otherwise the dollar will merely keep on plunging toward the November low at 75.63. The euro, trashy currency of the bureaucratic dictatorship known as the European Union, stands at the top, yea, double top of its recent range, closing today at 1.3803. It could keep on rising or it could fall from here. Flip a coin.

I bet they run through one of those industrial-sized bottles of Aspirin every day in the rooms where the Nice Government Men for the European Central Bank and for the Federal Reserve manipulate their exchange rates. I'm glad I only have to watch.,

On Friday I wrote that, correcting its 400 point fall (so far) the Dow would like rally to 12,200 today. It closed at 12,226.34, up 95.89 (0.79%). S&P rose 7.34 to 1,327.22. No surprise there.

No geniu, either, behind that prognostication, just simple mathematics. A 50% correction of a 400 point fall is 200 points. A 62.8% correction is about 248. Dow has run out of correcting steam, and should resume its fall tomorrow.

Sure, the Dow crossed above its 20 DMA today (12,175.10), and that will deceive the faithful into believing this 400 point drop was only a correction. Here's why they're wrong: if you draw a line from the 10 January low through the end- January low and extend it through today, you'll see that last Thursday's low broke that trend line. I call that "broke-down", but I will leave room for other calls. How about this one? BROADENING TOP, with higher or flat highs and lower lows resolved at last by a disemboweling plunge. Whatever you want to call it, hog or hen, the rising wedge pattern has now broken down and will probably claim 600 points from the top before it catches its breath. And the carnage will not stop there.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 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.



Friday, February 25, 2011

The Silver and Gold Price Rose This Week, The Dow, S&P, Dollar Index, Platinum and Palladium Fell, But What Does It Mean?

Gold Price Close Today : 1,408.70
Gold Price Close 18-Feb : 1,388.20
Change : 20.50 or 1.5%

Silver Price Close Today : 3289.8
Silver Price Close 18-Feb : 3229.8
Change : 60.00 or 1.9%

Gold Silver Ratio Today : 42.82
Gold Silver Ratio 18-Feb : 42.98
Change : -0.16 or -0.4%

Silver Gold Ratio : 0.02335
Silver Gold Ratio 18-Feb : 0.02327
Change : 0.00009 or 0.4%

Dow in Gold Dollars : $ 178.01
Dow in Gold Dollars 18-Feb : $ 184.52
Change : $ (6.51) or -3.5%

Dow in Gold Ounces : 8.611
Dow in Gold Ounces 18-Feb : 8.926
Change : -0.32 or -3.5%

Dow in Silver Ounces : 368.73
Dow in Silver Ounces 18-Feb : 383.65
Change : -14.92 or -3.9%

Dow Industrial : 12,130.45
Dow Industrial 18-Feb : 12,391.25
Change : -260.80 or -2.1%

S&P 500 : 1,319.88
S&P 500 18-Feb : 1,343.01
Change : -23.13 or -1.7%

US Dollar Index : 77.234
US Dollar Index 18-Feb : 77.642
Change : -0.41 or -0.5%

Platinum Price Close Today : 1,803.30
Platinum Price Close 18-Feb : 1,835.30
Change : -32.00 or -1.7%

Palladium Price Close Today : 790.55
Palladium Price Close 18-Feb : 850.50
Change : -59.95 or -7.0%

The GOLD PRICE closed yesterday at $1,415.30, then in the aftermarket lost nearly $20. Today's Comex close, though down $6.50 from Thursday at $1,408.70, in fact stood $12 above yesterday's aftermarket low. Same thing for the SILVER PRICE: closed Comex at 3289.80, down 26.8c but 95c above yesterday's lows. What meaneth this moil?

'Tain't as good as it looks, and probably isn't more than a bounce off yesterday's fall. If you look at yesterday as the first half of a Key Reversal (break into new high territory with a lower close) then today put the other half into place (lower close next day).

The road forks -- whither lead these forks? Both to correction, but may be the Shallow Road or the Steep Way. If Shallow Road, then the GOLD PRICE will stop at $1,390, mayhap $1,380, then roar back into a rally and cut through the 3 January old high ($1,422.60) faster than an earthquake wakes a weasel.

Steep Way stretches out much longer and further down, back perhaps to $1,325, perhaps further, and lasts several months. It will announce its presence when gold falls through $1,370, then $1,355. Fall is likely to be fast, triggered by who knows what impertinent event.

What worries at me like a terrier at a rat is the possible island reversal on gold's six month chart. (An island reversal leaps up leaving a gap, trades sideways forming the "island", then gaps down out of the island, leaving it isolated above the other trading.) Gold can nix that island by trading down (not gapping down) through $1,390, or by trading higher than $1,418 and rising more. Oddly, the weekly chart sports an island, too.

On the other hand gold's 20 DMA is about to rise through its 50 DMA, hinting gold will rise.

SILVER, silver! Silver rose to a new high -- 3433c -- on Monday when the big US market was closed. Tuesday it backed off that, but Wednesday and Friday bumped up on 3380c. Yesterday it fell out of the plane along with gold.

Both silver and gold look like they will spend several days recovering, whichever fork in the road they eventually take. First couple of days next week ought to see them move sideways or lower, but of course if they blow thru the last tops -- 3433c and $1,422.60 -- then they took the Shallow Road and are running down it.

Summing up the week is a binary task: it's either higher or lower than last week, and no argument. Silver rose, gold rose, Dow and S&P fell, US Dollar Index fell, platinum and palladium fell. But what does it mean??

Let's clean the dollar off our plate first thing. It dropped 1/2% from last week, and smashed hope of a rally soon by dropping out of its upside-down head and shoulders. However, it didn't follow through by crashing further. Low for the week came today as the dollar flirted -- if a scrofulous old hag like the dollar can be said to flirt -- with support around 77. This paints a double bottom with the last intraday low at 76.88, and gives the buck the chance to rally up off this double bottom. If the dollar falls through 77, then it will keep on falling to 75.63.

Any other clues anywhere else in the universe? Yep, the euro appears to have double-TOPPED around 1.3820. Lending force to that conclusion is today's 0.56% drop. Go euro, one of the great Trash Currencies of the world, next to the yen and dollar!

No confirmation of anything in currencies yet, but next move for the dollar ought to be up.

As the proverb says, "The Market is NOT benevolent," and stocks learned that in bleeding, bandages, and iodine this week. BEHOLD! How long a-building was that fatal rising wedge! Behold, how patient a wedge is to wreak its vengeance. Behold! How sore sharp the breakdown!

Today the Dow bounced 61.95, almost as rubbery as a dead cat, rising to 12,130.45. S&P 500 bounced, too, 13.78 points to 1,319.88.

As yesterday I expected, stocks rose a little today. This corrects the fall this week from nearly 12,400 to 12,000, but 'twill probably rise a bit more, perhaps to 12,200.

Lest y'all misunderstand, gaze upon the 6 month chart, and see how much damage the fall out of the wedge hath wrought. Ugly, ugly. Support lurks at round number 12,000, but next fall will cut clean through that like an acetylene torch through tinfoil. 'Tis already below the 20 DMA (12,154.97) and the 50 DMA at 11,877.74 is too close to help much, altho some lateral support dwells at 11,800. First strong lateral support appears at 11,451l, the last high. The chart is saying, shouting, screaming, "Lower! Lower! I must fall lower!"

Y'all enjoy your weekend.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 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.



Thursday, February 24, 2011

The Gold Price Was Punched to the Ropes Today After the Comex Close

Gold Price Close Today : 1413.40
Change : 12.90 or 0.9%

Silver Price Close Today : 33.166
Change : (0.132) cents or -0.4%

Gold Silver Ratio Today : 42.62
Change : 0.556 or 1.3%

Silver Gold Ratio Today : 0.02347
Change : -0.000310 or -1.3%

Platinum Price Close Today : 1776.00
Change : -7.40 or -0.4%

Palladium Price Close Today : 773.80
Change : -3.90 or -0.5%

S&P 500 : 1,306.10
Change : -1.30 or -0.1%

Dow In GOLD$ : $176.51
Change : $ (2.16) or -1.2%

Dow in GOLD oz : 8.539
Change : -0.104 or -1.2%

Dow in SILVER oz : 363.88
Change : -1.11 or -0.3%

Dow Industrial : 12,068.50
Change : -37.28 or -0.3%

US Dollar Index : 77.09
Change : -0.317 or -0.4%

The GOLD PRICE and the SILVER PRICE were punched to the ropes and hit the mat after the Comex close. Stock continue to slide, as does the dollar. Oil -- light crude -- hit $100 bucks yesterday and fell to 93 today. Platinum and palladium are also ailing.

Gentle readers, it is not a "good day" in any market when it closes up at a new high then falls out of bed (top bunk of the bed, at that) in the aftermarket. So gold today, and silver.

Nervous, nervous -- Gold traded almost all day above 1410, and closed Comex (1:30 Eastern time) at $1,415.30, up $1.90. Rumors about Libya flew and suddenly the bottom dropped out, as low as $1,394.30. When I checked last the GOLD PRICE was trading at $1,396, down $19.30 from Comex.

Which way do these forks in the road take us? First fork takes us to gold making a shallow correction, say to $1,380, then resuming its rally. T'other fork runs to a longer correction after failing today at the old high ($1,422.60, but today came close enough). Clearly the turmoil in the Middle East is influencing the market, both ways. That ain't much to build a rally on.

On a five day chart gold plunged through its uptrend line, breaking down badly. On a longer chart today's break did not hit the trend line, but all isn't well. A little gap up on Tuesday makes the chart look like an island reversal (a gap up, several days trading sideways, then a gap down leaving an island behind). If gold gaps down tomorrow, you have to call it an island reversal.

The SILVER PRICE chart looks much like gold, smashing down through the five day trend line, a clear breakdown. Now the number for silver to defend becomes 3150c - 3100c.

After closing down 13.2c at 3316.6c on Comex, silver dropped to a low of 3172.2 cents, 144c off its Comex close. On a longer chart silver dropped clean to its uptrend line. Support awaits at 3100c, then 2832c.

Now I never say "I told you so" because I think that is the height (the lowth?) of bad manners, but I do recall somebody yesterday musing that when the party gets so wild that people start throwing bottles and fighting and screaming, it may not be long before the cops pull up.

From a Comex close of 42.673 the GOLD/SILVER RATIO jumped in the aftermarket to 43.7! If you were EVER planning to swap silver for gold, you'd better do it Johnny-quick-smart.

I'd stand back from silver and gold to give them a couple of days to settle. As I said, this might be shallow and temporary, or it might entail more pain, even surgery.

Epicenter of all these tergiversations appears to be the risible dictator of Libya, the fellow who wears the baker's cap. Yesterday the rumor flew that he was in trouble, might flee, and in the melee Libya's oil production (12th largest world producer, largest in Africa) might fall. Oil rose to 100. Today, he shot a couple of hundred more protesters, discouraging democracy, and the rumor flew he was NOT leaving. Oil tanked, taking silver and gold with it.

Meanwhile that old derelict, the US DOLLAR, just keeps on rolling downhill. Having throw down its chance to rally with contempt, it reached 77 today, on its way to 76.90 and lower. The scrofulous euro, for reasons that will never be derived from facts or reality, has rallied to its last low. What happens now? Dollar and euro swap directions?

Y'all don't know what an effort I have to make to keep from waxing bitter over these scabrous, scrofulous fiat currencies. They are the vampire fixed on the carotid artery of the whole world, roaches feeding on the world's pantry, damp, mangey rats ferrying their economic plague from one country to another. And the bristly swine that run them, the much bepraised central bank heads and experts? Yellow egg-sucking dogs, not worth the powder to blow them to a higher state of existence.

Whoa. Get a grip. Let it roll, their day will not last long. One (that would be ME) prays and hopes to see the end of their rule with one's own eyes, and not too far from now.

Before I forget about it, I want to tell y'all about my friend Jim Smith's Back to The Land Store. Visit him at www.backtotheland.com. He sells anything you'd need for a mule, a garden, or a milch cow. Need open-pollinated non-GMO seeds? Jim's the go-to man. And, alone, I believe, in the western world, he has garden tools that won't break the first time you use them. Visit them on the internet or call 866-764-0034. Jim is in Erin, just two hours up the road from us.

STOCKS today slid again. Dow gave up another 37.28 points to close at 12,068.50. It barely managed to stay above the psychologically critical 12,000 round number, and hit a low at 11,983.17. Mercy! I would love to have been a fly on the wall in the Nice Government Men's command center when the Dow pierced 12,000. Coffee cups and donuts went a-flying every which way as they leapt to their computers to slam in those orders and get that index up. Shame their naps were disturbed.

S&P500 dropped as low as 1,294.26, but ended down only 1.3 points at 1,306.10.

On a five day chart the Dow is impulsing downward. Today probably marked the end of the first leg, so tomorrow (helped by the end of the week) stocks might climb as high as 12,152. That will give out and they'll fall again, gaining speed as they plunge each successive level of support technical and psychological. If y'all are watching, I'd bring gauze and plenty of adhesive tape, cause it's likely to get bloody.

More proof stocks have turned: the Dow in Gold Dollars now stands at G$176.51 (8.538 oz), having rolled over at G$188 and crashed through G$180 on the way to tunnel beneath its 200 DMA once again.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 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.



Wednesday, February 23, 2011

Both the Gold Price and Silver Price Appeared To Have Completed a Low Degree Correction Yesterday, and Both Began Climbing Again

Gold Price Close Today : 1413.40
Change : 12.90 or 0.9%

Silver Price Close Today : 33.298
Change : 0.436 cents or 1.3%

Gold Silver Ratio Today : 42.45
Change : -0.171 or -0.4%

Silver Gold Ratio Today : 0.02356
Change : 0.000094 or 0.4%

Platinum Price Close Today : 1783.40
Change : -3.60 or -0.2%

Palladium Price Close Today : 777.70
Change : -26.80 or -3.3%

S&P 500 : 1,307.40
Change : -8.04 or -0.6%

Dow In GOLD$ : $177.05
Change : $ (3.19) or -1.8%

Dow in GOLD oz : 8.565
Change : -0.154 or -1.8%

Dow in SILVER oz : 363.56
Change : -3.26 or -0.9%

Dow Industrial : 12,105.78
Change : -107.01 or -0.9%

US Dollar Index : 77.38
Change : -3.880 or -4.8%

The GOLD PRICE closed today at $1,413.40, rising another 12.90. Gold has gained $25.20 since its Friday close, and stands less than $10 below its all time high of $1,422.60 (3 January 2011).

The place where the nitric acid of truth will hit the mystery metal of this rally comes at gold's last high. SILVER has made new highs in this move, but gold has not. If it falters at $1,422 then this party is over and the cops have just pulled up outside. If gold sails through $1,422 then gold will run wilder than ever, with silver alongside. If gold clears $1,422 (needs to get to $1,451 to exceed old high by a safe 2%), the targets that move implies are so huge that I don't even want to mention them to y'all cause you'll think I'm crazy.

Both the GOLD PRICE and SILVER PRICE appeared to have completed a low degree correction yesterday, and both began climbing again today. Silver's high Comex close came today (another new high) at 3329.8c, up 43.6c from yesterday. Silver's running mad as a weasel with his tail on fire. Looking at the ancient charts -- brush the dust of that, will 'ya?-- there is a squiggle, and not much of a squiggle, of resistance/support at 3450c and at 3950c. Not much guidance there, but leave it at this: 3500c is in silver's sights.

Finally, let me get out my hose and sprinkle all y'all down with a little more ice-water. Gold, and especially silver are levitating, rising straight up. Don't get used to this, friends, cause it ain't normal. It's fun while it lasts, and I love the music, but when it ends it ends all of a sudden, faster than quicksilver falls thru a sifter. So keep you flincher flinched, just in case the music ends soon. Meanwhile, we just enjoy the dance.

By the way, I did mention, didn't I, that silver could rise to 4000c and the GOLD/SILVER RATIO could drop to 38? I can't remember a thing.

Sorry I missed y'all yesterday, but I was finishing up my monthly Moneychanger newsletter. Paid subscribers can pick it up now at www.the-moneychanger.com.

My bewilderment continues, a tug of war between the forces and signs for higher prices, and the forces of gravity.

Against the silver and gold rally continuing are the blows platinum and palladium have taken in the last few days. More, stocks have lost 300 points in two days. That has to make silver feel heavy. Also, there was that leap to new high territory on Monday, a holiday in the US. Was that leap genuine, or should be discount it because the mammoth US market was closed? Silver reached 3433c!

But these are all niggling quibbles compared to the silver and gold charts, which still point powerfully upward. But more of that anon. Let us first cast our gaze upon the scrofulous US dollar.

Today the dollar nixed by upside-down head and shoulders reversal pattern by dipping and closing below 77.50. Dollar lost 38.8 basis points today to close at 77.38. It has fallen below its 20 DMA (77.90) below the last low, MACD is pointing lower. Euro also is above its 20 DMA headed for its last high at 1.3841 (closed today at 1.3749). Next backstop for dollar is last low at 76.88.

STOCKS have been whipped hard with a barbed wire scourge. Dow has lost 285.47 points the last two days, 107.01 of it today to perch finally at 12,105.78. S&P500 has lost 35.61 points, and today lost 8.04 and finally stopped rolling downhill at 1,307.40.

I've been telling y'all that stocks were forming a bearish rising wedge. Under that wedge there is only -- air. Space. No trampolines or tarpaulins to break the fall. It appears that the Dow has plunged through that wedge's lower boundary line, which will accelerate the plunge. HOWEVER, the Dow might bounce off round number support -- indeed, appears to have done so today -- at 12,000. I believe that this is the definitive break in stocks.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 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.



Friday, February 18, 2011

Gold Price Might Reach $1,600 and Silver 3950c, Is Gold Heading Up to the Next Resistance Level?

Gold Price Close Today : 1,388.20
Gold Price Close 11-Feb : 1,359.90
Change : 28.30 or 2.1%

Silver Price Close Today : 3229.8
Silver Price Close 11-Feb : 2999.2
Change : 230.60 or 7.7%

Gold Silver Ratio Today : 42.98
Gold Silver Ratio 11-Feb : 45.34
Change : -2.36 or -5.2%

Silver Gold Ratio : 0.02327
Silver Gold Ratio 11-Feb : 0.02205
Change : 0.00121 or 5.5%

Dow in Gold Dollars : $ 184.52
Dow in Gold Dollars 11-Feb : $ 186.57
Change : $ (2.05) or -1.1%

Dow in Gold Ounces : 8.926
Dow in Gold Ounces 11-Feb : 9.025
Change : -0.10 or -1.1%

Dow in Silver Ounces : 383.65
Dow in Silver Ounces 11-Feb : 409.22
Change : -25.56 or -6.2%

Dow Industrial : 12,391.25
Dow Industrial 11-Feb : 12,273.26
Change : 117.99 or 1.0%

S&P 500 : 1,343.01
S&P 500 11-Feb : 1,329.15
Change : 13.86 or 1.0%

US Dollar Index : 77.642
US Dollar Index 11-Feb : 78.417
Change : -0.78 or -1.0%

Platinum Price Close Today : 1,835.30
Platinum Price Close 11-Feb : 1,805.90
Change : 29.40 or 1.6%

Palladium Price Close Today : 850.50
Palladium Price Close 11-Feb : 811.55
Change : 38.95 or 4.8%

Mercy, what a week! The GOLD PRICE rose 2.1% -- yes -- the SILVER PRICE rose 7.7%, GOLD/SILVER RATIO fell 5.2%. Even stocks joined the party, but the US dollar couldn't be roused from its depression.

Stick a little note up on your mirror to remind yourself that stocks and the SILVER PRICE trend together. When the stock market breaks, silver won't be long behind. (Whoa! No fiery emails, please, silver lovers, I am only talking about silver's performance relative to gold. When investors are risk-hungry, they buy stocks and silver. When they are risk-fearful, they sell stocks and silver and buy gold. I don't make the facts, I just report them.)

This week the GOLD PRICE added a hefty $28.30. Last week, you may remember (and I do, and will remind y'all, because it turned out to be correct -- if it hadn't it would have gone down the memory hole faster than a weasel in a hurry) I said that if gold could pierce the top of its consolidation range, $1,368, it would sprint for $1,380. Yesterday it closed $1,384.70, and today on Comex gained another $3.50 to close at $1,388.20, treading the threshold of the next resistance level.

Gold's lagging against silver, and the established pattern of spike lows for the GOLD/SILVER RATIO, have been keeping me bearish on both silver and gold. I have abandoned that reluctance because gold is now plainly confirming silver's rise, silver has risen to a new all time high above 3 January's high, the ratio has hit new lows, and silver's new high was already yesterday nearly 2% above 3 January, and today 3.9% above. All these argue stubbornly for a breakout and rally to higher prices. Look out! Don't stand in the way of that steam roller!

The utter, final, and ultimate end of all doubt comes when gold, too, reaches a new all-time high above $1,422.60 (3 January's close).

What are we looking at? 3500c and $1,475 at least. Higher? Possible. Silver might reach 3950c and gold $1,600. But let's see how it unfolds.

I have been pondering this, thinking until my hair smoked. What in the world are we seeing? Look at the silver and gold rally from last summer, virtually straight skyward without a jiggle. Recall that markets move up in five waves, one long and very slow one up when only the realizers have caught on and are buying, a very sharp correction (2008) where the bull market tries to shake off as many riders as possible.

After that first wave up and first corrective wave down begins the third wave up. That is never the mildest and sometimes the wildest, stretching and reaching farther even that the most unashamed bulls (like me) could imagine. In the third wave the establishment investors are catching on. Then comes another sharp correction, wave 4 down, shaking out more riders. Last comes wave 5 up, which usually travels straight up in an asymptotic or hyperbolic rise as the public climbs aboard. That's your clue time draweth nigh to climb off the bull.

That third wave up cranked up in Fall 2008, and last summer began to stretch its legs. Trying to be wise these last weeks, trying to discipline myself to the historical stats, I became foolish and refused to believe my eyes. Clearly, silver and gold are not ready for any significant breather, nor has the gold/silver ratio made its low. It's all right, we just swapped gold for silver a little early. That correction will come, eventually, and we will swap back. But the lesson to learn here is this is a bull market, and you never, ever, fight the trend. Silver and gold's performance will run yet amoker, if "amok" is capable of comparison.

Yet in the midst of life there is death, and when the bullets are whizzing around your head, you better keep it down. Ever present possibility remains that silver and gold will top suddenly and correct sharply. That, too, belongs to an enthusiastic market.

From internal indicators the GOLD PRICE has more room to rise than silver. Weekly momentum indicators have just now turned up. They also have plenty of room to riot on the daily chart.

The SILVER PRICE, on the other hand, has nearly reached escape velocity. Relative Strength Indicator is at the top of the range, but as we say in the fall, can become a lot more overbought before it drops. Weekly indicators are high, but what does silver care about that?

Folks, you must buy the breakouts, as you must buy the corrections. Sometimes you get slapped, but a bull market is a rising tide, and she will eventually raise even the boats carrying your mistakes. Buy silver and gold.

Driving all this is the Fed's generosity, pouring out money on all and sundry alike, like some perverse mockery of Cornucopia. Look at the little drop in the Dow in Gold Dollars, down to G$184.52 (8.926 oz). For weeks the DiG$ has hovered there, unable to make any progress. Sooner or later one of Reality's RPGs will bring it down, but the point to observe here is that the DiG$ remains flat because gold and stocks are rising at about the same rate. Clearly, stocks are acting as a "hard asset play", which, as bricks and mortar, they are. Unhappily, that's where the comparison dies, because they are also economic beings, not monetary, and they dwell within the economy. No amount of money printing will revive a sinking economy, Keynes, Bernanke, and Bernard O'Bama notwithstanding.

Mark also that the new money driveth not all things with the same goad. Silver and palladium, for example, are running faster than the others, no doubt because they are such small markets. New money has a proportionately larger impact when it hits them.

Ponder the Dow in Silver ounces. It fell a massive 25.5 oz this week, 6.2%, but reached no new low. The latest low struck on 3 January, when silver made its last price high, at about 375 oz. Miss not, however, that silver has been pounding the stuffing out of stocks, far more ardently than gold has. Still, the oddity always catches our eye: WHY? Odd, odd that the Gold/Silver ratio reached new lows without silver at a new high. Odd again that the Dow in Silver is higher today, with silver 120c higher than on 3 January, that it was then. I think the mystery is revealed in the Fed's pumping, because that new money runs first to Wall Street. Why not speculate? It's free money.

Woe, woe, woe, down de dollar go, and not so very slow! US dollar index lost 35.3 basis points (0.45%) to end at 77.642, a new low for the move. Low came at 77.50. Now the dollar must either throw its grenade or fall on it. Since mid-January the dollar has traced out an upside down head and shoulders sort of pattern. A close below 77.50 violates that pattern and puts skids underneath the dollar. Yesterday's close took it below the 20 day moving average, first tripwire of a trend change.

What will happen I don't know, but it will happen because the Fed wants it to, you can rest assured. Dollar weakness plainly is driving stocks right now, and stocks are the Fed's Potemkin indicator for the economy. "If stocks are rising, the economy must be recovering!" Right, and if you set a corpse upright in a coffin, he must need an armchair.

STOCKS made new highs this week, indeed, today, too, but some indices rose while some fell. The Dow peaked its head above 12,380, rising 73.11 to 12,391.25. S&P rose far less, by 2.58 to 1,343.01.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 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.



Thursday, February 17, 2011

The Gold Price Smashed it's $1,380 Resistance Closing at $1,384.70

Gold Price Close Today : 1384.70
Change : 10.00 or 0.7%

Silver Price Close Today : 31.572
Change : 0.942 cents or 3.1%

Gold Silver Ratio Today : 43.86
Change : -1.022 or -2.3%

Silver Gold Ratio Today : 0.02280
Change : 0.000519 or 2.3%

Platinum Price Close Today : 1846.30
Change : 17.00 or 0.9%

Palladium Price Close Today : 845.00
Change : 4.85 or 0.6%

S&P 500 : 1,340.40
Change : 4.08 or 0.3%

Dow In GOLD$ : $183.88
Change : $ (0.88) or -0.5%

Dow in GOLD oz : 8.895
Change : -0.043 or -0.5%

Dow in SILVER oz : 390.13
Change : 0.80 or 0.2%

Dow Industrial : 12,317.08
Change : 28.91 or 0.2%

US Dollar Index : 77.98
Change : -0.244 or -0.3%

The GOLD PRICE today rose $10 on Comex to close the day at $1,384.70, well past the $1,380 resistance. I'm through fighting it, which, I grasp, may mean that it has topped, but I can't fight it any longer.

GOLD has topped its 20 and 50 day moving averages (50 @ $1,370.11), the Moving Average Convergence/Divergence indicator is positive, like a snowball rolling down the Alps, Relative strength indicator isn't overbought, and it has reached a new high for the move. Some profit taking tomorrow (Friday) may take it down a notch, but it is headed higher. I bought today.

One reason I have to throw in my bearish gold towel is that silver today made a new high for the move from November 2008. Comex silver gained 94.2c to close at 3157.20. Ratio fell to 43.86.

The SILVER PRICE momentum indicators are more overbought than gold's by far, but typically silver leads the way in the late stages of a rally, where we are now. Silver is tugging gold up.

Learn thy lesson from my error. It's always dangerous to fade a bull market, because the major trend is up, which means more than half the time those who bet against it will lose. Once again I must re-learn the ancient wisdom, "The trend is your friend."

I bought SILVER today, too.

The new GOLD/SILVER RATIO low at 43.86 brings us to my first alternative target at 43.63, 2006's low. Below that lies 42 and 41, also possibilities. From this point gold might begin to gain on silver, which slows down the ratio's progress. To nail the final nail in Doubt's coffin, gold must close at a new high, above $1,422.60. Looking for upside targets leads to targets like $1,600 and 3900c, although I will still be looking over my shoulder to make sure I am not being suckered by a double top.
The white thing flying by your head is my bearish towel, which I am throwing in on silver and gold. They're headed higher.

The US DOLLAR INDEX fell today 24.4 basis points to 77.979 (down 0.31%). That's dead on the 20 day moving average, but the uptrend remains unbroken. The euro rose to 1,3607, closing above its 10 day moving average, but right on its downtrend line. That's a might-ee position: might go up, might go down. Dollar is sagging but has not broken down.

One of the great mysteries in my life, at this point greater than the mystery of a man and a maid, is stocks. But I suppose their levitation testifies to the power of printing money. Go, Ben.

Stocks are in a rising wedge. Rising wedges usually break down. The RSI is more overbought than Miami condos in 2007 -- moonstruck. If MACD goes any higher it will reach escape speed and leave the earth. Economic sense behind this? Nothing. Sawdust.

Dow today reached a new high for the move at 12,317.08, up 28.91. S&P rose 4.08 to 1,340.40. Volume is declining, which is negative, but so is everything else, so why let THAT bother you?

I don't care how much fun they're having at that party or how cheap the booze is, I'll just stay outside, thank you.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 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.



Wednesday, February 16, 2011

$1,380 Holds Stiff Resistance For The Gold Price, Once Gold Breaks Through It Will Sprint For $1,420

Gold Price Close Today : 1374.70
Change : 1.10 or 0.1%

Silver Price Close Today : 30.630
Change : (0.063) cents or -0.2%

Gold Silver Ratio Today : 44.88
Change : 0.128 or 0.3%

Silver Gold Ratio Today : 0.02228
Change : -0.000064 or -0.3%

Platinum Price Close Today : 1829.30
Change : -0.80 or 0.0%

Palladium Price Close Today : 840.65
Change : 3.05 or 0.4%

S&P 500 : 1,336.32
Change : 8.31 or 0.6%

Dow In GOLD$ : $184.78
Change : $ 0.80 or 0.4%

Dow in GOLD oz : 8.939
Change : 0.039 or 0.4%

Dow in SILVER oz : 401.18
Change : 2.02 or 0.5%

Dow Industrial : 12,288.17
Change : 61.53 or 0.5%

US Dollar Index : 78.25
Change : -0.324 or -0.4%

The GOLD PRICE spake out of both sides of its mouth today. Overnight it traded up to 1378, but when New York opened it traded down-up-down to $1,368.3 about 10:00 a.m. From there it staged an impulsive rally that reached $1,381.90 by 12:15, but just as sharply fell off and went limp around $1,375. After all that sound and fury, Comex closed up only $1.10 at $1,374.70.

Now that is not the first half of a key reversal (break into new high ground with a lower close), but it doesn't miss it by much. GOLD is also bumping right along its top Bollinger Band, which usually foretells a fall.

On the mitigating hand, $1,380 holds stiff resistance, and momentum indicators are positive and have plenty of room to rise.

If gold breaks through $1,380, it will sprint for the old high above $1,420. Yet the early harbingers whisper that tomorrow will be a down day.

The SILVER PRICE came under attack from the opening bell and was driven back to 3025c. From that depth it launched a heroic rally to 3097c, the very doorstep of 3100c and the last high, but it spent no time meditating there. It dropped back to 3055c by 1:00 and barely traded the rest of the day. On Comex it closed down 6.3c at 3063c.

Technically that is the first half of a key reversal, but must be confirmed confirmed by the second half, a lower close tomorrow.

Silver remains a scootch below its top Bollinger Band, but a little scootch. Relative Strength Indicator is working its way into nosebleed territory, but isn't quite there yet. Histogram looks to be rounding down, but but MACD has a plenty of room to rise.

All of which jargon says that SILVER PRICE had better clear 3100c tomorrow or pack a parachute.

Life ain't easy, is it? I reckon if it was, everybody would do it.

If you think we had an 18-wheeler load of bewilderment yesterday, wait till you run your eye over today.

First of all that old crack-head the US DOLLAR INDEX ran plumb crazy. Look at the five day chart: it looks like two W's drawn by a drunk. No pattern, no consistency. Dollar dropped below 78.50 today by 32.4 basis points and landed at 78.249. This is not the world's end, and doesn't gainsay the dollar's uptrend or upside-down head and shoulders reversal. But one wonders in vain why it would have made a higher high than yesterday's, along with a lower low. I thank heaven I am not in the pit trading dollars.

Okay, tomorrow: dollar index has walzed sideways and up and down quite enough, and must not close below 78. Otherwise, it will be calling for more downside.

Best argument for the dollar is the euro, which is locked in a confirmed and nasty downtrend.

Canceling out their downtrend of the past two days, stocks rose today, pushing the last high a bit higher. Today's peak came at 12,303.16, but the close backed off to 12,288.17, up 61.53. S&P also rose to 1,336.32, up 8.31. Could rise more, but I don't want to ride with it. Fall will hurt too much.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 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.



Tuesday, February 15, 2011

Gold Price Cleared it's 50 DMA Closing at $1,373.60, Gold Ought to Move Faster After $1,380

Gold Price Close Today : 1373.60
Change : 9.00 or 0.7%

Silver Price Close Today : 30.693
Change : 0.164 cents or 0.5%

Gold Silver Ratio Today : 44.75
Change : 0.054 or 0.1%

Silver Gold Ratio Today : 0.02234
Change : -0.000027 or -0.1%

Platinum Price Close Today : 1830.10
Change : -1.40 or -0.1%

Palladium Price Close Today : 837.60
Change : 4.85 or 0.6%

S&P 500 : 1,328.01
Change : -4.31 or -0.3%

Dow In GOLD$ : $184.00
Change : $ (1.82) or -1.0%

Dow in GOLD oz : 8.901
Change : -0.088 or -1.0%

Dow in SILVER oz : 398.35
Change : -1.38 or -0.3%

Dow Industrial : 12,226.64
Change : -41.55 or -0.3%

US Dollar Index : 78.59
Change : -0.020 or 0.0%

The GOLD PRICE cleared its 50 DMA today ($1,372.27, my criterion yesterday) so I can't fight it any longer. Next fence lies at $1,380, and gold ought to move faster now. A failure here -- a sudden drop back to $1,340 -- would look bad, but there's no hint that might happen. Gold added $9.00 on Comex, closing at $1,373.60.

The SILVER PRICE smashed down the 3065c gate and rose 16.4c to 3069.3c on Comex.

Okay, I am not imagining this. Silver appears to have completed a move up from 2980c, so tomorrow ought to be a down day, but not below 3040c.

And ANOTHER thing that the Internet Silver Cheerleaders haven't noticed is that the buy-side wholesale premium for US 90% silver coin is a negative 75c. Whatever else that says, it surely screams that plenty of silver is ready for sale. In all fairness that premium can drop while silver is rising, but a higher premium would indicate more buyers, and more buyers bring more upward buying pressure.

And anent that "backwardation:" there remaineth no backwardation (although a very flat contango) in the silver futures through December 2011. However, the very distant months, out in 2013, 2014, and 2015, are backwardated to February 2011. What exactly does that say? Oftentimes trading in those very distant months is so thin that the price trails the closer months. I don't know whether that is happening or not, but it might explain it.

My doubts will continue to fester until SILVER and GOLD confirm each other and their rally with new highs in both metals. I'm trying hard not to be stubborn (a really TALL job for anyone who's Scotch-Irish), but truth is, I have a really strange way of learning: I learn by making mistakes. Yes, more expensive than a University education, but also more lasting. And I have too many times been taken in, fooled, and had my pockets picked by double tops. Thus even one as stubborn as I learneth over time to buy the bottom of a range, or the breakout above a range, but never the little area right up under the resistance.

Silver this week ought to challenge that 3109 high from 3 January. That will be fish or cut bait time.

Mercy! If y'all have never seen a Tennessee morning looking across the bare fields thru a blue haze to the trees with their limbs raised in halleluiahs you can almost hear, y'all have not yet lived.

Y'all probably ought to just listen to what I say and pay no attention to what I do. I can't shake this out of synch-ness. I don't know whether I am just committed to my own opinion and "talking my position", or whether my suspicions might have some ground. Today ought to have shredded them.

"Talking your position" happens when somebody takes a losing position and keeps talking it up in the face of events, or, in the case of stock brokers and financial salesmen, when they are selling you on the inventory they want to move like a dying man wants a drink of water.

The Dollar Index didn't move enough today to affect the price of anything. It lost 2 basis points (did you say TWO basis points?) to end at 78.594. That's okay, because all it needed to do was hold above 78.50. If the dollar has indeed traced out an upside-down head and shoulders, then tomorrow and rest of the week it shouldn't drop below 78.50.

Almost all stock indices fell today, the Dow for the second straight day. What? Well, look at the five-day chart. Friday shows a peak above 12,280, followed the next two days by lower lows and lower highs. Dow dropped 41.55 points to 12,226.64 and S&P lost 4.31 at 1,328.01. A Dow close below 12,160 could push the snow-ball downhill. 20 day moving average awaits at 12,051.86.

A kind reader wrote yesterday to fill up the hole in my vocabulary with the wonderful word METASTABILITY. That's the market condition I described yesterday, where an equilibrium seems to rule, but in truth it is only a delicate balance of fiercely opposing forces. When one side's foot is pushed back just a little, big change follows.

On this day in 1971 Great Britain switched to a decimal-based currency, abandoning the sensible and division-friendly system of 240 pence to the pound (20 shillings of 12 pence each) in effect since Anglo Saxon times, no, that's wrong, since ROMAN times. Think about it. You divide a 100 pence pound by 20 or 10 or 5 or 2, but not by 3 or 6 or 12. A 240 pence pound you can divide by 20, 12, 10, 8, 6, 5, 3, or 2 and never end up with 2.5 or 16-1/6 or 33-1/3.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 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.



Monday, February 14, 2011

If The Gold Price Wants to Turn Up, It Needs to Close Clean Through $1,368, Then March On. Enough of This Fiddling Back and Forth

Gold Price Close Today : 1364.60
Change : 4.70 or 0.3%

Silver Price Close Today : 30.529
Change : 0.537 cents or 1.8%

Gold Silver Ratio Today : 44.70
Change : -0.644 or -1.4%

Silver Gold Ratio Today : 0.02237
Change : 0.000318 or 1.4%

Platinum Price Close Today : 1831.50
Change : 25.60 or 1.4%

Palladium Price Close Today : 823.75
Change : 12.20 or 1.5%

S&P 500 : 1,332.32
Change : 3.17 or 0.2%

Dow In GOLD$ : $185.85
Change : $ (0.70) or -0.4%

Dow in GOLD oz : 8.990
Change : -0.034 or -0.4%

Dow in SILVER oz : 401.85
Change : -0.24 or -0.1%

Dow Industrial : 12,268.19
Change : -5.07 or 0.0%

US Dollar Index : 78.60
Change : 0.091 or 0.1%

I continue to take a whipping from my friends and readers because silver and gold are making me not wildly optimistic but cautious, guarded, and suspicious. The GOLD PRICE peaked last Friday at $1,368, closed down two bucks to a cliff-hanging $1,359.90, then rose $4.70 (0.3%) to $1,364.60. High came at $1,366.65. It's hard for me to call this progress because it didn't close at a new high or even through past resistance while silver rose 1.7%. Why the disagreement? What are we not seeing?

If gold wants to turn up, it needs to close clean through $1,368, then march on. Enough of this fiddling back and forth by two-sie/three-sie dollars.

The SILVER PRICE has a flat contango, but a contango still and not a backwardation. The really far out months, in 2012 -2015, are in backwardation, but I have no data on how they behave.

Silver is pressing the issue and about to reach a resolution nobody can argue with: its 3 January old high. Today silver recovered from Friday's blowing-hot- and-cold-out-of-both-sides-of-your-mouth close and gained 53.7c to close at 3052.9c, smashing 3025 AND 3050c resistance. Momentum indicators say silver can move higher still. If it breaks through 3109c close silver will quickly race for 3500c.

This can't keep on. Either SILVER will begin agreeing with gold or gold with silver. GOLD closing above its 50 dma (now $1,372.27) will scream that both will rise.

The Dollar Index is filling out all the boxes and painting the right shoulder of an upside-down head and shoulders on its 6 month chart. Assuming the dollar does not fall below 78.50 (78.30 lowest!) it ought to rise the rest of the week.

Markets are oddly quiescent. Stocks are bobbling, but won't follow through. Silver is tugging, but gold lagging. Platinum and Palladium bounce to minimal new highs, then fall back. Euro has clearly broken, dollar definitively bottomed, it appears, but where's the confirming follow-through?

Equilibria ain't. That is, equilibria don't last. Usually they are born not of exhaustion of buyers and sellers, but of a transitory equal balancing of their ferocious force. One or the other slips and the market takes off. Therefore some day soon, triggered by who knows what, markets will see big moves up or down.

Or not.

STOCKS today showed befuzzlement, some indices up and some down, slightly. "Which way should I jump?" they seemed to say. Against gold stocks have run out of gas and can't break through G$188.00 (9.094 oz of gold equals the Dow). Dow today ended at a 5.07 loss, 12,268.19. So far Dow has proven itself incapable of breaking through 12,280. S&P500 rose today 3.17 to 1,332.32.

Stocks have painted out a fatal and deadly rising wedge, which in bear markets almost always resolves by plunging badly.

By the way, the RSI and MACD momentum indicators are so overbought on stocks that they look like a joke. Even the unpracticed eye would mark their exaggeration.

It's Valentine's Day and I can't shake out of my head the words of that great Southerner Andrew Nelson Lytle: "The opposite of love is not hate but power." Long have I turned that over in my mind, and the more I turn, the deeper Lytle's insight drives.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 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.



Friday, February 11, 2011

Silver and Gold Price Have Not Declined Enough After a Gold/Silver Ratio Low, Is the Correction Still to Come?

Gold Price Close Today : 1,359.90
Gold Price Close 4-Feb : 1,348.30
Change : 11.60 or 0.9%

Silver Price Close Today : 2999.2
Silver Price Close 4-Feb : 2906.4
Change : 92.80 or 3.2%

Gold Silver Ratio Today : 45.34
Gold Silver Ratio 4-Feb : 46.39
Change : -1.05 or -2.3%

Silver Gold Ratio : 0.02205
Silver Gold Ratio 4-Feb : 0.02156
Change : 0.00050 or 2.3%

Dow in Gold Dollars : $ 186.57
Dow in Gold Dollars 4-Feb : $ 185.37
Change : $ 1.19 or 0.6%

Dow in Gold Ounces : 9.025
Dow in Gold Ounces 4-Feb : 8.967
Change : 0.06 or 0.6%

Dow in Silver Ounces : 409.22
Dow in Silver Ounces 4-Feb : 416.00
Change : -6.79 or -1.6%

Dow Industrial : 12,273.26
Dow Industrial 4-Feb : 12,090.71
Change : 182.55 or 1.5%

S&P 500 : 1,329.15
S&P 500 4-Feb : 1,310.85
Change : 18.30 or 1.4%

US Dollar Index : 78.417
US Dollar Index 4-Feb : 78.540
Change : -0.12 or -0.2%

Platinum Price Close Today : 1,805.90
Platinum Price Close 4-Feb : 1,842.00
Change : -36.10 or -2.0%

Palladium Price Close Today : 811.55
Palladium Price Close 4-Feb : 812.25
Change : -0.70 or -0.1%

GOLD PRICE today closed Comex down $2.00 at $1,359.90. Low came at $1,354. Technically that doesn't damage the chart, but it does confirm that gold is consolidating between $1,368 and $1,355. If gold crosses that upper threshold, it will sprint to $1,380. If it trips over that bottom threshold, it will fall -- to $1,345, maybe $1,330.

Let the week speak for itself, before I put any words into its mouth. SILVER rose heftily, GOLD reluctantly, stocks admittedly. US dollar index closed lower on the week, but actually is recovering. Platinum and Palladium dropped. I remain out of synch with silver and gold.

A clue to where silver and gold are headed may come from the GOLD/SILVER RATIO, which made a new low this week at 45.08. FOR the present it appears to have made a double bottom, but it hasn't risen much (to 45.36 today) to support that conclusion. Since silver tends to outperform gold when stocks are rising, you must expect stocks to continue to rise if you expect that ratio to keep on falling, i.e., silver to keep on rising.,

To maintain rally-mode the SILVER PRICE must close above 3049c next week. That was this week's intraday high. Today silver dropped along with gold, losing 9.9c to close at 2999.2c, a scootch below 3000c, which makes me grind what's left of my teeth.

I keep on seeing Internet stories about silver's "backwardation," but can't find it in the futures closes. Today, although the contango is pretty slim, silver futures from Feb. 2011 through March 2012 were in contango (distant months were more expensive than near-by months). When you get out to the really long contracts, beginning in March 2012 out to December 2015 there is a slight backwardation, but I'm not sure that says a whole lot. Not what a backwardation of the nearest three months would say, certainly.

Silver's five day chart looks to be rolling over to the downside, although it must fall below 2870c to confirm that. On the upside silver's challenge remains conquering 3050c.

What's the bone sticking in my throat crosswise? Just this: silver and gold have not declined enough in price nor delayed enough in time to fulfill the typical reaction after a gold/silver ratio low. After that very long rise that topped on 3 January 2011 (from November 2008), it seems to me that silver and gold are most likely to take a rest, correct, shake out new, inexperienced investors, and build strength for the next rise. They aren't doing that, they are holding up, even if gold is not particularly enthusiastic.

But I may just be sour because the market is not meeting my little expectations. Of course, if my suspicions prove correct I look like the prince of wise men. Y'all see why it's so hard to win in this game?

All this musing has to do only with the immediate future for silver and gold, not the long term. For that, silver and gold remain in a primary uptrend with three to ten years to run.

Maybe I just don't trust the quiet.

US DOLLAR INDEX recovered its drug-induced enthusiasm this week. On Wednesday it spiked down to 77.50, then rebounded smartly to end today at 78.417, up .21%. That wasn't quite its 78.697 high, but it made good yesterday's gains. On a five-month chart (stockcharts.com, "$usd") the dollar index has traced out an upside-down head and shoulders since mid-January. Other indicators point upwards, and today the dollar index left behind its 20 day moving average (78.09). Barring a close below 77.50 the dollar should ease its way upward.

Stocks edged higher this week, but without impressing me. They've made another bearish upward wedge, or extended the existing one. This will end badly. My friend Michael Peroutka talks about the Mojo, that is, the spell that keeps folks from noticing that the emperor is stark, staring naked. From nowhere does The Mojo ooze out more powerfully than Wall Street and financial topics. Might as well hit yourself in the head with a ball peen hammer as to try to explain to an "expert" financial planner or stock broker why his product will inevitably drop because it is trapped in a primary downtrend. The Mojo creates such a dark, fiery cloud that folks can't even hear you. Some of 'em can't even see your lips moving.

When somebody asked Flannery O'Connor why she wrote such bizarre stories, she replied, "When people are deaf, you have to shout to make them hear." She might have been talking about investing today.

Stocks remain the pneumonic plague in the Cosmic Encyclopedia of Investment Diseases. Expose yourself at your own risk.

Y'all enjoy your weekend.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Thursday, February 10, 2011

Is The Gold Price Forming the Fatal Broadening Top Pattern That Usually Breaks Out to the Downside? Wait and See

Gold Price Close Today : 1361.90
Change : (2.90) or -0.2%

Silver Price Close Today : 30.091
Change : (0.182) cents or -0.6%

Gold Silver Ratio Today : 45.26
Change : 0.176 or 0.4%

Silver Gold Ratio Today : 0.02209
Change : -0.000086 or -0.4%

Platinum Price Close Today : 1825.10
Change : -29.00 or -1.6%

Palladium Price Close Today : 821.35
Change : -8.90 or -1.1%

S&P 500 : 1,321.87
Change : 0.99 or 0.1%

Dow In GOLD$ : $185.62
Change : $ 0.25 or 0.1%

Dow in GOLD oz : 8.980
Change : 0.012 or 0.1%

Dow in SILVER oz : 406.41
Change : -0.33 or -0.1%

Dow Industrial : 12,229.29
Change : -10.60 or -0.1%

US Dollar Index : 78.19
Change : 0.547 or 0.7%

Daily chart of the GOLD PRICE today takes the fatal shape of a Broadening Top, where highs are level or slightly rising and lows keep getting lower. Dow made a similar patter at the 2000 top, but later became a diamond top. Never mind, it only matters that it's a pattern that usually breaks out to the downside.

Only other interpretation is that gold has established a ceiling of resistance at $1,367/$1,365 and must bayonet its way thru that barbed wire and machine guns before it advances further. (Whoa! My metaphor gland is SMOKING today!) On Comex today gold shut the doors down $2.90 to $1,361.90.

The SILVER PRICE five day chart looks more like a rounding top, but since broadening tops sometimes show a rising upper boundary, it might be called that, too. Upper barrier for silver is 3050c, and the lower safety net is 2965c. On Comex today silver closed down 18.2c at 3009.1c.

The daily chart opened about 3018c, then slammed down to 2967c, and rose smartly back to 3025c, but closed lower. Y'all don't get mad and start throwing inkwells at me through the computer, I have to tell y'all what I see. Silver can only overcome the bad juju of the last three day's chart by clearing that 3050c level.

Stepping back a bit and viewing the five month chart. So far SILVER has merely made a lower high than its 3 January peak, which constitutes nothing more than a double top or maybe a peaking B-wave of an A-B-C correction.

Of course, closes above $1,365 and 3050c resistance would gainsay my elaborate ratiocination.

That old meth-head the US DOLLAR INDEX decided to go straight today. It burst up off yesterday's 77.50 bottom, adding 54.7 basis points and leaving that chart looking even more like a head and shoulders bottom. From here the dollar will spike its own future if it closes, even trades, below 78. Overhead it needs to break clean through 78.35.

The dollar cleared its trend-change trip-wire 20 day moving average (78.13) and closed at 78.188. The Euro, on the other hand, closed at 1.3602, down 3/4 of one percent and below its 20 dma (1.3607).

Early in the day stocks were knocked down and they stayed down the rest of the day. Again it was a mixed day, with some indices up and some down. Dow lost 10.6 points to close 12,229.29, looking something like the repeating decimal fraction of an ounce of silver's statutory value in "dollars of silver," that is, $1.29292929292.

But I digress, for as we all know, stocks ain't like silver at all. Besides, stocks might have broken their uptrend. If so, expect the rats to come over the sides of the ship in great carpets whenever the Dow cuts through 12,000.

S&P500 today closed up a meaningless 0.99 point to 1,321.87.

My confidence in stocks remains as high as it has been since 2000.

(Some of you won't get that, I'll bet.)

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Wednesday, February 09, 2011

Silver and Gold Price Both Remain in an Uptrend With All Indicators On Go, or Are They?

Gold Price Close Today : 1364.80
Change : 1.40 or 0.1%

Silver Price Close Today : 30.273
Change : 0.002 cents or 0.0%

Gold Silver Ratio Today : 45.08
Change : 0.043 or 0.1%

Silver Gold Ratio Today : 0.02218
Change : -0.000021 or -0.1%

Platinum Price Close Today : 1854.10
Change : -3.80 or -0.2%

Palladium Price Close Today : 830.25
Change : -7.15 or -0.9%

S&P 500 : 1,320.88
Change : -3.69 or -0.3%

Dow In GOLD$ : $185.39
Change : $ (0.07) or 0.0%

Dow in GOLD oz : 8.968
Change : -0.003 or 0.0%

Dow in SILVER oz : 404.32
Change : 0.22 or 0.1%

Dow Industrial : 12,239.89
Change : 6.74 or 0.1%

US Dollar Index : 77.59
Change : -0.406 or -0.5%

Y'all might expect me to be a drooling cheerleader for SILVER PRICE and GOLD PRICE, but I'll tell you, today inspireth not. Gold rose $1.40 to $1,364.80; silver rose 2/10 (two-tenths) of a cent to 3027.3c. GOLD/SILVER RATIO climbed a bit to 45.08.

I've pored over charts till my eyelids have bled, but I still have no certainty what's happening. There is precedent for this indecision at gold/silver ratio reaction highs (made after a long fall and low) but not at the lows. Usually the ratio drops straight down, then springs straight up, no indecision, no hesitation. There's always a first time, I suppose, but it seemeth more logical that it foretells another silver and gold price rise, but today's closes are tired, tired, and plumb out of breath.

Yet silver and gold both remain in an uptrend with all indicators on go. Well, that's not QUITE accurate. RSI and MACD point up, but silver bumped today against its top Bollinger Band and gold isn't far from the same barrier. Bollinger Bands delimit two standard deviations from the 20 day moving average, and only rarely does a move pierce that boundary, up or down. That argues for a slight rebound down off the Bollinger Bands at least.

For the nonce, watch GOLD downside at $1,355, because it shouldn't violate that support, and must not violate $1,345. Up above it must challenge and conquer $1,380.

Watch SILVER to see how it acts at 2970c, and at 3000c. Above silver must breach 3050c. I'm not a traffic cop, but I know where the curbs are.

Forgot to mention that premium (actually a discount, or, as a creative government bureaucrat might say it, a "negative premium") on US 90% silver coin fell today. That's a little hint silver is getting heavy.

I was surprised to hear from a reader today that he didn't know that we sell silver and gold. In case some of the rest of y'all don't know either, yes, we do -- or at least, we try to. Y'all will find ordering instructions at the bottom of this email every day.

It's hard, hard, hard to befriend the US dollar, like trying to befriend a meth-head. About the time you think it's going straight, it falls again. Today the US dollar index fell 40.6 basis points (0.52%) to 77.593. Just getting CLOSE to the 20 day moving average (78.17) slapped the dollar silly.

Best the dollar might hope for is that the chart is building an upside down head and shoulders (see stockcharts.com, "$usd", 6 month chart, OHLC bars). If that's true, the dollar index will not dip below 77.50. Otherwise, it is merely meandering its way to perdition.

The Dollar Index's MACD, by the way, has turned up.

In my short life I've seen some big whoppers, but I have hardly ever seen a lie as shameless as today's Dow close. Every other stock index was down, and the Dow itself spent a tortured day trying to stand up and getting kicked in the teeth. Every other index closed down, S&P500 down 3.69 at 1,320.88, but not the Dow. Look there on the far right side of the chart, that little booger there. Right, that's the uptick at day's end that raised the Dow 6.74 to 12,239.89. See, that's the thing about the Nice Government Men: they ain't subtle.

Stocks remain the nasty used sneakers in the Great Investment Shoe Store. Leave 'em alone or you might catch something fungal.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Tuesday, February 08, 2011

Gold Price is Without Question Rallying and Will Go Higher, Watch Closely How it Behaves at $1,380

Gold Price Close Today : 1363.40
Change : 15.80 or 1.2%

Silver Price Close Today : 30.271
Change : 0.923 cents or 3.1%

Gold Silver Ratio Today : 45.04
Change : -0.878 or -1.9%

Silver Gold Ratio Today : 0.02220
Change : 0.000425 or 1.9%

Platinum Price Close Today : 1857.90
Change : 18.10 or 1.0%

Palladium Price Close Today : 837.40
Change : 19.75 or 2.4%

S&P 500 : 1,324.46
Change : 5.41 or 0.4%

Dow In GOLD$ : $185.48
Change : $ (1.05) or -0.6%

Dow in GOLD oz : 8.973
Change : -0.051 or -0.6%

Dow in SILVER oz : 404.13
Change : 2.25 or 0.6%

Dow Industrial : 12,233.53
Change : 71.90 or 0.6%

US Dollar Index : 77.95
Change : -0.081 or -0.1%

Today's GOLD PRICE crashed through that $1,353 barrier and thru next resistance at $1,362. It rose $15.80 to close on Comex at $1,363.40. Silver rose faster, by 92.3c, to close Comex at 3027.1c. Stabbed by my own words, I cast down the sweaty, bearish towel and pick up the bullish banner. Yesterday I said that gold needed to rise above 1,355 then $1,362. With gold above that level and silver over 3000c, and the ratio making a new low today, my mouth is shut.

The SILVER PRICE gained a whopping 92.3c today to close Comex at 3027.1c. Remember that the 3 January high was 3109c. By the way, silver today is strongly UN-backwardated or, in easier English, in normal contango: Feb 11 3009.5c, Mar 11 3029.5c; April 11 3030.5c; July 11 3034.5c; Dec 11 3032.5c. However, the 2012 contracts are all over the place, as are the 2013d, 2014s, and 2015s. May be those just didn't see any trading today.

More importantly, the GOLD/SILVER RATIO made a new low today at 45.04 oz. of silver per ounce of gold. If you meant to swap silver for gold earlier, then the market has given you another chance. SWAP NOW, SILVER FOR GOLD!

I remain curious why silver and gold are so reluctantly confirming each other. That ratio low might stop here, or might continue to 43.6, or even 41. Odd is that gold is 4.1% below its high, while silver is only 2.7% below its high.

That begs a question: Does this constitute only a lower low (a kind of double bottom) in the ratio that will not reach the previous highs and thus end in lower silver and gold prices? Or will silver and gold proceed to make new highs? We just have to wait for that answer.

For now, SILVER and GOLD are without question rallying and will go higher. Watch closely how they behave at $1,380 and 3100c. It is an anomaly for me to recommend buying more gold than silver, but because of the low ratio, that's what I would do right now.

I am often, yes, often, baffled by the media's interpretation of markets. Today (taking advantage of a holiday as government's usually do making such announcements) China announced it would raise interest rates to cool inflation. MarketWatch interpreted that as the event raising gold's price. Hmmmm. China cooling inflation means MORE demand for gold? How's that, since inflation is the primary driver for monetary demand? How's that, since rising interest rates make it more costly to hold gold? Well, supposedly that Chinese government move "validated" a Chinese inflation problem. Wow. Deep, very deep, but who, down to the lowest goat in the herd, didn't already know China has an inflation problem?

DOW IN GOLD DOLLARS is faltering, whispering that stocks are about to turn down against gold.

STOCKS rose again today in nominal terms. Dow added 71.9 to 12,233.53 and S&P500 rose 5.41 to 1,324.46. The Dow in Gold Dollars points to a drop in stocks coming soon, but let us take the longer view.

First, stocks are in a Primary Down Trend (Bear Market). A primary trend lasts 15 to 20 years once it begins, and stocks began this bear market in January 2000 (in August 1999 against gold). That means that stocks will be trending downward, never mind the zigs and zags inbetween, until 2015 or so. Down, not up.

Second, an answer for those who argue that stocks will benefit from inflation as a hard asset refuge (they represent bricks and mortar). Constantino Bresciani-Turroni conducted the classic study of the German hyperinflation 1920 - 1923. He reports that although stocks showed HUGE nominal gains, in real terms they in fact lost value.

Third, stocks are in a Primary Down Trend (Bear Market) against both silver and gold. Stocks have already lost 80% of peak value, and will lose another 80% before this bear market ends. Knowing that, why would I own stocks rather than silver or gold?

Questions, anyone?

Trapped in a hotel room last weekend, I was forced to turn the TV to Fox news and CNN. Noticed the long, expensive, celebrity-endorsed articles for four big gold sellers. Because this advertising costs so much, it ought to tell you something about the advertisers. Now I sell silver and gold, so anything I say sounds like invidious comparison, but LO! I will say it anyway. These folks BURY customers, charging 40 to 50% more than most dealers. How do I know? Because I have dealt with so many of their corpses when the customers come asking us to dig them out of their rotten investment. Folks, celebrities do NOT endorse gold dealers because they believe in them, but because they get paid large money to pander for them. Bear that in mind, and buy carefully.

This plethora of advertising also tells us that huge demand is flowing into silver and gold. Sometimes that's good news, sometimes bad. Generally the public is most excited, the advertising most intense, the headlines loudest, at tops, not bottoms.

Will the gentleman who wrote me about selling the Chilean gold doubloons please write again? I have a quotation but erred by deleting your email.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Monday, February 07, 2011

The Gold Price Must Clear $1,353, Then Move Above $1,362, Longer it Lingers Here the Weaker it Becomes

Gold Price Close Today : 1,347.60
Gold Price Close 28-Jan : 1,340.70
Change : 6.90 or 0.5%

Silver Price Close Today : 2934.8
Silver Price Close 28-Jan : 2793.4
Change : 141.40 or 5.1%

Gold Silver Ratio Today : 45.92
Gold Silver Ratio 28-Jan : 48.00
Change : -2.08 or -4.3%

Silver Gold Ratio : 0.02178
Silver Gold Ratio 28-Jan : 0.02084
Change : 0.00094 or 4.5%

Dow in Gold Dollars : $ 186.56
Dow in Gold Dollars 28-Jan : $ 182.31
Change : $ 4.25 or 2.3%

Dow in Gold Ounces : 9.025
Dow in Gold Ounces 28-Jan : 8.819
Change : 0.21 or 2.3%

Dow in Silver Ounces : 414.39
Dow in Silver Ounces 28-Jan : 423.27
Change : -8.88 or -2.1%

Dow Industrial : 12,161.55
Dow Industrial 28-Jan : 11,823.70
Change : 337.85 or 2.9%

S&P 500 : 1,319.04
S&P 500 28-Jan : 1,276.34
Change : 42.70 or 3.3%

US Dollar Index : 78.034
US Dollar Index 28-Jan : 78.135
Change : -0.10 or -0.1%

Platinum Price Close Today : 1,839.80
Platinum Price Close 28-Jan : 1,792.40
Change : 47.40 or 2.6%

Palladium Price Close Today : 817.65
Palladium Price Close 28-Jan : 812.50
Change : 5.15 or 0.6%

The GOLD PRICE and the SILVER PRICE, I mind not confessing, have me baffled. What keeps me from throwing in my bearish towel is gold's toe-kicking and heel scuffing refusal to climb above that last $1,353 intraday low. This smells all the more suspicious when silver has climbed 5.1% while gold has climbed only 1/2%.

Why am I fighting this rise when gold's MACD and RSI have turned up? More, gold has broken through the downtrend line from the 3 January high. Last two days gold has sparred with the 20 day moving average ($1,352.15), but not penetrated it. Mayhap gold's fecklessness in crossing that line has merely been wrestling to get through the 20 DMA.

Thursday, Friday, and today gold traded range-bound by 1355 and 1345. Ranges are zones where opposing selling and buying pressure match evenly. When one side or the other flinches, the breakout comes.

Gold weekly chart still points down, but that moves slower than daily.

What can I say? Gold must clear $1,353, must close above that and more, must clear $1,355, then move smartly above $1,362. Longer it lingers here, weaker it becomes. Downside gold must not pierce $1,343.

Contradictions bother me. What's behind them? Friday gold fell $4.00 while silver rose 33.1c. Hmmm. Today silver added another 28.4c while gold lost 70c. Why are they gainsaying each other?

The GOLD/SILVER RATIO has fallen quickly nearly to its 3 January low. Comex today closed 45.92, just above 3 January's 45.75. If the ratio breaks 45.75, it implies BUT DOES NOT NECESSARILY GUARANTEE that silver and gold will reach new highs. If a new ratio low appears, then it throws my expectations for reaction price lows out another month, or, I might have to scrub that and think it all through again. Historical data says that it is not unknown for the ratio to trifle along as much as a month, making two lows near each other, before turning and shooting up.

Platinum and Palladium are knocking at their last highs, which as yet tells us nothing.

The SILVER PRICE jumped up on Thursday from a 2790-ish low to 2900c in a single bound. Friday it tested that 2900c support, then bolted fro 2925c. Since then it has gently risen to a ceiling at 2940. Comex today gained 28.4c to close at 2934.8c.

The silver/gold contradiction is not yet, as some allege, rooted in a silver backwardation.

"Backwardation" occurs when any futures market shows higher prices for the spot or closest month than the normal contango. Normal contango reflects the carrying cost of interest, insurance, and storage, so the months further out in time cost more. From February, you ought to have to pay more for silver if you want to buy it for September delivery, because of that carrying cost.

So whenever a market backwardates it shows a shortage of deliverable metal, perhaps a short squeeze where those who have shorted silver can't find the metal to deliver against their obligations, and so pay more and more to get their hands on it.

Only problem with the backwardation/shortage of silver theory is that today the market was not backwardated. Rather, it showed normal positive contango. One ought also recall that interest is the largest component of contango, and right now interest rates, thanks to Big-Hearted Ben Bernanke, are unnaturally low, which keeps contango low.

On Friday something appeared more like a zero-contango, with the March 2011 contract at 2905.9. and the Cash market at 2907.5c Might be a harbinger, but it's a tee-tiny one.

If I am wrong, gold will break through $1,362 in the next day or two and silver will keep on rising while the ratio sinks below or matches 45.75. I can only watch.

My trip to Maryland was very restful, and I enjoyed meeting some of you subscribers. Thanks for your encouragement and courtesy.

I don't know which is more bewildered, the markets or me. One of two things is happening with SILVER and GOLD. Either they are about to break out for another big rally, or they are about to fail and complete their correction of the 3 January 2011 high. Stocks? Well, you tell me. Nobody every went broke overestimating the gullibility of American Investors. Dollar hangs on, but barely. What hints and clues do the markets give?

US DOLLAR INDEX bottomed (intraday) last Wednesday at 76.88, and has clumb ever since. Today it stands above 78 at 78.034. It fell only 2.3 basis points today, 0.03%.

What signs point up for the dollar? MACD has turned up, and RSI is rising. 76.71 was the next to the last low, so there's lateral support for a bottom here. Over last 4 days dollar has painted a muscular upmove but slowed down today. High nearly touched the 20 day moving average (78.44 vs. 78.35). If the dollar crosses that line, it would flash the first warning confirmation of an uptrend. I expect the dollar to rise again tomorrow, but watch that 77.85 low from today. Dollar must not dip down there and surely must not close below 78. Euro also appears to have topped and today touched its 20 DMA from above, first warning of a downmove.

STOCKS don't move me with greed, fear, desire, or joy. I know I am watching a sucker trap, and want nothing to do with it. They can go higher, although they are already heavily overbought. Do yourself a kindness and stay away from stocks.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.