Thursday, January 05, 2012

Gold Price Nearly Hit 200 Day Moving Average ($1,627) a Usual Place to Fall in a Not-Yet-Completed Downward Correction

Gold Price Close Today : 1619.40
Change : 7.50 or 0.5%

Silver Price Close Today : 2926.50
Change : 20.20 cents or 0.7%

Gold Silver Ratio Today : 55.336
Change : -0.127 or -0.2%

Silver Gold Ratio Today : 0.01807
Change : 0.000041 or 0.2%

Platinum Price Close Today : 1412.90
Change : -5.10 or -0.4%

Palladium Price Close Today : 638.70
Change : -28.55 or -4.3%

S&P 500 : 1,281.06
Change : 3.76 or 0.3%

Dow In GOLD$ : $158.49
Change : $ (0.76) or -0.5%

Dow in GOLD oz : 7.667
Change : -0.037 or -0.5%

Dow in SILVER oz : 424.25
Change : -3.04 or -0.7%

Dow Industrial : 12,415.70
Change : -2.72 or 0.0%

US Dollar Index : 80.91
Change : 0.782 or 1.0%

The GOLD PRICE and the SILVER PRICE both rose today, but with much subdued enthusiasm. Gold closed Comex $7.50 higher at $1,619.40. Silver added 20.2c to 2926.5c. No significant advance here, just hanging on.

The GOLD PRICE five day chart has widened out its swings and today posted what might be a double top at $1,625. Now the way of life is that you either advance or fall back, grow or die, unless you are a lichen or a rock under a lichen. If gold cannot pierce $1,625, then 'twill fall back to prove at $1,600 exactly how strong it is.

Today GOLD nearly hit its 200 day moving average ($1,627) which would be a usual place to limit an upmove in a not-yet-completed downward correction.

Y'all are probably scratching your heads and wondering why in the world a fellow who is so sure silver and gold will be higher this time next year and three to five or more times higher in the next 3 - 10 years would croak so about tomorrow's outlook? Well, 'cause that's what the chart shows, and arguing with a chart is like arguing with a road sign: makes you feel good, but doesn't get you anywhere you want to go.

Interpretation is crucial here, because it will tell us whether we see a low lower than $1,524, or whether gold has now put all that trifling behind its back and turned its face to the sun.

The SILVER PRICE appears more tired than gold. It has been beating its head against a solid wall of resistance above 2960c, without success. Today silver dropped as low as 2874.5, a little lower than yesterday, which was a little lower than Tuesday. Highs also have been successively lower. And I have just described what? Sounds like a downtrend. To gainsay that outlook silver must beat its way through 2960c and close higher.

Patience, patience. I'd rather exercise a little patience here and maybe buy a little higher than buy and watch it sink to a final bottom.

Today the US dollar index cashed that check it wrote yesterday. Rose 78.2 basis points (1.01%, giant move) to $80.911, nearly reaching yesterday's 81.10 target. High struck 81.016. Once the buck worms its way past that 81.00 turnstile, it will run fast for 81.50.

What the dollar won, the euro lost. It fell 1.22% to close at 1.2787, face still firmly set on 1.2000 or less.

How can I be so sure? Yesterday the euro gapped down, then today gapped down again, closing way below the last low. Down, down, down.

Somebody slapped the yen today, knocking it below the lower channel boundary established August thru October. Fell 0.51% to 129.69c/Y100 (Y77.10/$1). Hope of higher yen died today.

Stocks were a mess today. Nasdaq and Nasdaq-100 rose slightly, as did the S&P500, but the Dow and other sank, evidencing great confusion and faltering confidence. Today's Dow chart pictures precisely running out of gas (see chart at and sputtering to a halt. Dow fell 2.72 (0.02%) to 12,415.70, while the S&P500 rose 0.29% (3.76) to 1,281.06.

Today the Dow sank as low as 12,283, crossing the perilous and deadly 12,300 line. Last three days (as well as today's chart) look like and empty jet fuel tank at 20,000 feet. Dow must breach 12,500 or drop into free fall.

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.