Wednesday, January 18, 2012

The Gold Price Job for Tomorrow is to Move Ahead Toward $1,680 and to Breach That $1,667 Barrier

Gold Price Close Today : 1659.50
Change : 4.30 or 0.3%

Silver Price Close Today : 3051.40
Change : 40.80 cents or 1.4%

Gold Silver Ratio Today : 54.385
Change : -0.594 or -1.1%

Silver Gold Ratio Today : 0.01839
Change : 0.000199 or 1.1%

Platinum Price Close Today : 1524.20
Change : 3.70 or 0.2%

Palladium Price Close Today : 668.90
Change : 20.00 or 3.1%

S&P 500 : 1,308.04
Change : 14.37 or 1.1%

Dow In GOLD$ : $156.69
Change : $ 0.82 or 0.5%

Dow in GOLD oz : 7.580
Change : 0.040 or 0.5%

Dow in SILVER oz : 412.24
Change : -2.37 or -0.6%

Dow Industrial : 12,578.95
Change : 96.88 or 0.8%

US Dollar Index : 80.51
Change : -0.668 or -0.8%

The GOLD PRICE advanced respectably today, as did the SILVER PRICE, but noticeably slower than the last few days. GOLD rose 4.30 to $1,659.50 on Comex. Silver added 40.8c to 3051.4c.

The GOLD PRICE almost reached $1,662, but had not strength to break through. Low was $1,650.95, so it closed at least near the top of its range. Yesterday's high was higher, at $1,667.30. Gold's feet are getting heavier as it nears the top of the $1,680 mountain. That this sloth struck on a day the dollar dropped markedly causes one of my eyebrows to twitch.

Plainly, gold's job tomorrow is to move ahead toward $1,680, and to breach that $1,667 barrier.

Call me a worrier, but I am not easy with the SILVER PRICE chart. Today's high was 3057c, yesterday's was 3056c. Silver's stalled dead at 3056c.

On the 5-day chart this leaves a double top, which SILVER must break through or pay the consequences. If silver falls through 2980c, it will fall another 40c in a heartbeat, then to 2850c. That would set silver up for a trip to 2600-ville.

Remember those rising wedges in both gold and silver I fretted about yesterday. They abide there still, until contradicted by higher prices.

Today I've been thinking about all the reasons the bull market in metals has not yet ended, despite all the Wise Persons opining so. Here's yet another. At the bull market peak, the Wise Persons and all media headlines will be screaming about a New Era of Perpetually High Silver and Gold Prices. Doubt it not, nor doubt that ne'er a bull market hath ever ended amid widespread doubts it will go higher. Bull markets climb a wall of worry. They end when the worrying stops.

Act 87, Scene 1 opened in the European Financial Crisis Farce today, and the audience swallowed it like a big bass nailing a minnow -- hook, line, and sinker.

IMF "announced" it would be seeking another $300 million in funding for bailing out Europe. This is, mind y'all, pie in the sky -- no agreements, no approvals, no plans, no money, just the "want-to"s. (Besides, being bailed out by the IMF is like having your life saved by a surgeon who amputates all your arms and legs to cure your hangnail.)

(By the way, if you believe the timing of this IMF announcement was accidental, talk to me about some great bargains on Florida swamp land.)

That was all the euro needed, since it was way oversold to begin with. Everybody in the world expects it to drop to 1.2000, so "everybody" has already sold it and there are no new sellers to drive it down further. Scrofulous euro rose 0.94% to 1.2856 at the close. This pokes thru, but barely, the downtrend line. Before you pop a cork, remember that the euro did the same on the first trading day in January, then promptly fell to new lows. Thus this doubter needs to see a three day close above that downtrend line. 20 DMA stands at 128.99, not far above.

The Japanese yen stood flat-footed today, up a squeenchy 0.4% to 130.23c/Y100 (Y76.79/US$1).

Of course the scabby US dollar index paid thru the nose for the scrofulous euro's rise. Dollar lost 0.86% (66.8 basis points) to 80.514. Closing below 80.50 will make the dollar look brown around the edges; below 80 sends the dollar testing its parachute. Today's low came at 80.47. No confirmation yet, but clouds are lowering over the dollar's future.

Taking enthusiasm from the IMF announcement, stock investors send stocks back up to their resistance ceiling. Dow rose 96.88 (0.78%) to close at 12,578.95, just below that 12,600 resistance. S&P 500 closed at 1,308.04, up 1.11% or 14.37 points.

Doesn't matter what I or anybody else thinks about the future of stocks, some patterns always hold true. One is the "Three Strikes and You're Out." Stocks challenged this level in May and July, and now knock upon that same door. A failure this time seals their fate, just as a significant penetration of 12,600 would send them much higher.

By the by, that July failure sent stocks to 10,600 in a few weeks.

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.