Monday, January 23, 2012

The Gold Price Reached my $1,680 Target and Should Now Rally to $1,705

Gold Price Close Today : 1678.00
Change : 14.30 or 0.9%

Silver Price Close Today : 3223.30
Change : 58.60 cents or 1.9%

Gold Silver Ratio Today : 52.058
Change : -0.512 or -1.0%

Silver Gold Ratio Today : 0.01921
Change : 0.000187 or 1.0%

Platinum Price Close Today : 1563.70
Change : 33.20 or 2.2%

Palladium Price Close Today : 686.05
Change : 12.20 or 1.8%

S&P 500 : 1,316.00
Change : 0.62 or 0.0%

Dow In GOLD$ : $156.56
Change : $ (1.47) or -0.9%

Dow in GOLD oz : 7.574
Change : -0.071 or -0.9%

Dow in SILVER oz : 394.28
Change : -7.67 or -1.9%

Dow Industrial : 12,708.82
Change : -11.66 or -0.1%

US Dollar Index : 79.70
Change : -0.671 or -0.8%

Today the GOLD PRICE climbed $14.30 to $1,678.00. The SILVER PRICE tagged right along and ran out front with a 58.6c rise to 3223.3c.

GOLD PRICE has now reached my $1,680 target area -- high today hit $1,681.25. Gold's present zeal argues that it will rally to $1,705 at least before pausing.

Worth noting is that gold's crucial 150 day moving average stands at $1,681.19 today. As a footnote, the GOLD PRICE also rose above its 50 DMA (1,669.54).

Remember that during this bull market gold has only rarely traded below that 150 DMA, and never for a very long time. If it climbs over soon, it may not touch that 150 DMA for a long time to come.

The SILVER PRICE has punched through a resistance line within its trading channel, with one clear goal in mind: reach 3400c. Look for it soon.

SILVER's 300 DMA, which has been as important to silver as the 150 DMA has been to gold, stands at 3428c today. About the same place stands resistance from last fall's trading. Silver has the bit in its teeth and is running away, above its 20 and 50 DMAs and raging.

Keep in mind if you are pondering buying silver or gold that you are not buying for a one or even two or five dollar gain, but a TRIPLE or quadruple. Even a five dollar gain here will look very small in hindsight. Longer you wait to buy, more they will cost.

A joke on the streets of Moscow these days: "Everything the Communists told us about communism was a complete and utter lie. Unfortunately, everything the Communists told us about capitalism turned out to be true."

Markets have made their intentions considerably clearer today. Dollar's rolling into the gutter again, stocks are indecisive and faltering, gold and silver are shaking off their worries and marching higher.

Let's start with the US Dollar Index. Dealing with all these fiat currencies for me is like having to listen to a long lecture on tapeworms and other internal parasites. Thus I want to get it behind me as quickly as possible.

What the dollar is losing, the euro is gaining as the frenzied rats, uncertain which ship will sink first, swim from one ship to the other. Here's the answer to their quandary: BOTH are sinking.

Dollar index today lost 67.1 basis points, a meaty 0.86%, to grab a branch at 79.704. Falling through the trap door at 80 sends the dollar much lower, and a fall through 79.50 (probably tomorrow) will only tie anvils to the dollar's feet.

Dollar's rally is over for a while. Broke clean through the uptrend line, closed below the 20 day moving average (80.53), and has only barely avoided breaking the 50 DMA (79.45). None of this promises anything other than lower prices for the dollar. It has fallen off the kerb into the gutter.

Euro meanwhile has a full load on and has posted two gaps up in the last 3 trading days -- breakaway gap, headed for 132+ resistance. Not clear yet how substantial this rally is, or how long it might last. May constitute no more than a rally before one last spike down, but looks good from here. Momentum points skyward as euro has passed its 20 DMA (1.2889) and is drawing a bead on its 50 DMA (1.3163). Euro closed today up 0.77% at 1.3031.

Yen did little today, up 0.08% at 129.93c/Y100 (Y76.96/US$1). Above the 20 DMA (129.62) but looking awfully tame.

STOCKS today looked lost and bewildered, some indices up, some down. Confusion promises nothing good as stocks run out of enthusiasm and steam.

Dow fell 11.66 (0.09%) to 12,708.82. Broader S&P500 rose 0.62 (get out the magnifying glass) or 0.05% to 1,316.00.

Dow acting allergic to 12,750. Last high close came 2 May 2011 at 12,810. That is now doing the same thing to the Dow that Kryptonite does to Superman.

S&P500 is also struggling at analogous downtrend line from 29 April 2011 close at 1,363.60.

Don't expect either index to reach those last high levels. This will bring great pain to many, and I take no pleasure in reporting it. Stocks are in a primary down trend, and have much, much further to fall in the years before that bear market ends.

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.