Wednesday, January 04, 2012

Gold Price Has Climbed Above $1,600 Can it Hold?

Gold Price Close Today : 1611.90
Change : 12.20 or 0.8%

Silver Price Close Today : 2906.30
Change : 47.0 cents or -1.6%

Gold Silver Ratio Today : 55.462
Change : 1.296 or 2.4%

Silver Gold Ratio Today : 0.01803
Change : -0.000431 or -2.3%

Platinum Price Close Today : 1418.00
Change : -17.00 or -1.2%

Palladium Price Close Today : 651.15
Change : -16.10 or -2.4%

S&P 500 : 1,277.30
Change : 0.24 or 0.0%

Dow In GOLD$ : $159.26
Change : $ (0.93) or -0.6%

Dow in GOLD oz : 7.704
Change : -0.045 or -0.6%

Dow in SILVER oz : 427.29
Change : 7.51 or 1.8%

Dow Industrial : 12,418.42
Change : 21.04 or 0.2%

US Dollar Index : 80.09
Change : -0.476 or -0.6%

Today the GOLD PRICE moved ahead on its way to a meeting with $1,625 resistance. Rose $12.20 to $1,611.90 on Comex. Silver, perversely, fell 47c to 2906.3c.

Now that the GOLD PRICE has climbed above $1,600, it must hold on there or crash badly. It has pointed its hood ornament at $1,675/$1,680, lateral resistance and the 150 day moving average (now 1,672.42).

Whether GOLD has already bottomed or must be sent back to suffer more indignities makes little difference. It will have turned back up before this first quarter is over. Silver and gold will end 2012 much higher.

Overhead the SILVER PRICE is knocking at 2970c. Chart has congested, digesting yesterday's rise. Tomorrow Silver will break one way or the other, most like upward. Low today came at 2894, so silver must defend that 2900c area.

GOLD/SILVER RATIO may have fooled me. May not reach 57.5:1, but over the years I have learned to wait for my target, so I will wait.

Most important aspect of investing seems the one principle almost nobody knows, including investment "professionals" and financial planners. It's simple: ALWAYS ALIGN YOUR INVESTMENTS WITH THE PRIMARY TREND. That's the trend that runs for 15-20 years, up or down. If it's up, you buy it and hold it. If it's down, you sell it and stay out or short it.

NEVER buy a bull market position and trade in and out, trying to catch the highs and lows. You ain't that good. Hardly anybody is, and you'll only lose your position and your money trying.

Bear market (primary down trend) began in stocks and the US dollar in 2000, and it's still running. Bull market in silver and gold began in 2001, and it's still running.

Best investment strategy is to climb aboard the primary trend and ride it till it ends. Not fancy, no long fake-eyelashes, not flashy, it just makes money.

Whenever a sharp bull market correction makes you question yourself, remember: bull market quandaries eventually resolve to the upside. Go look at the silver chart, 2008 - now, if you need an example.

But of course, I don't wear them fancy, pointy shoes like them financial planner and experts, and I don't have any fancy degrees either. I'm just a natural born fool from Tennessee --- who was advising people to get out of stocks back in 2001. But what do I know?

Dollar index made a rounding bottom (or upside-down head and shoulders) over the last three trading days. Unless it drops below 80, that pattern will hold and send the dollar higher, to 81.1 at least. Close below 80 negates that outlook.

Euro gapped down today, utterly gainsaying yesterday's pin prick across the downtrend line. Closed down 0.87% at 1.2940. Looking for 1.2000.

Yen sidestepped today, flat, but holding on to the break above the trend line. Ended at 130.37c/Y100 (Y76.70/$1). Itching to move higher.

Tired out by yesterday's gains, stocks took a rest today. Dow rose 0.17% (21.04 points) to 12,418.42. S&P500 rose 0.2% (0.24%) to 1,277.30.

I don't get it. Economy's future remains burdened by massive bad debts and malinvestment from the last boom cycle -- shucks, from the booms since 1913. Apparently at midnight a.m., 1 January 2012, some Great Wheel turned that will fix everything. At least, that's how the stock market is acting, but I reckon somebody forgot to tell me about the Great Wheel's turning.

Add to that what seems to be the Federal Reserve's resolve to keep on inflating, which is the only cure they know and the one cure that won't help. Oh, and the Bernancubus and Co. have announced that they're going to be more transparent and announce what course they expect interest rates to follow, which gives them a chance at making even more mistakes in uncharted waters. Whoops -- they made that decision to be more open at last month's meeting, but kept it a secret until today. The Three Stooges weren't this ridiculous. Curly, Larry, and Moe are in charge of national monetary policy!

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

- Franklin Sanders, The Moneychanger

© 2012, 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.