Thursday, January 12, 2012

The Gold Price Rose Another Level up $8.10 on Comex Closing at $1,647.30

Gold Price Close Today : 1647.30
Change : 8.10 or 0.5%

Silver Price Close Today : 3009.20
Change : 23.40 cents or 0.8%

Gold Silver Ratio Today : 54.742
Change : -0.158 or -0.3%

Silver Gold Ratio Today : 0.01827
Change : 0.000052 or 0.3%

Platinum Price Close Today : 1496.90
Change : 5.00 or 0.3%

Palladium Price Close Today : 634.25
Change : -10.05 or -1.6%

S&P 500 : 1,295.50
Change : 3.02 or 0.2%

Dow In GOLD$ : $156.50
Change : $ (0.49) or -0.3%

Dow in GOLD oz : 7.571
Change : -0.023 or -0.3%

Dow in SILVER oz : 414.43
Change : -2.53 or -0.6%

Dow Industrial : 12,471.02
Change : 21.57 or 0.2%

US Dollar Index : 81.31
Change : 0.503 or 0.6%

Yet again the GOLD PRICE ratcheted up another level. Today's low, $1,642, again fell above yesterday's close (1,639.20). GOLD closed Comex up $8.10 at $1,647.30. Overhead it probed and penetrated $1,650 resistance, reaching $1,661.50, but couldn't hold on. Makes no nevermind, as this stair-step pattern constitutes strong bullish action.

The SILVER PRICE sneaked through 3025c resistance and ran clean to 3064.3c before any sellers caught on. Finished the day above the next milestone, 3000c, at 3009.2c, up 23.4c. Never fell lower than 2989c.

To keep the reins on its rally, SILVER ought not drop lower than 3025c tomorrow, and ought to jump one more step, say, closing above 3100c. That ought not stretch silver too hard, but when it nears 3200c, watch out.

Already silver stands above its 20 day moving average -- 2905c -- and is nearing the 50 dma (3140c). Much more important, the last three days silver has closed ABOVE its downtrend line stretching back to the September high. Folks, a 3-day close above a trend line is a BREAKOUT.

Around 3200c silver will encounter great enemies, and may need to fall back and regroup, but it has energy and strength.

The Long Dry Spell has ended.

Tear off the top of the chart, where the label is, and ponder with me for a moment this picture.

It is a broadening top, a well-known and fatal topping formation. Draw a line from the March and June 2010 lows, and another line from the May and June/July highs. You have constructed a long, narrow equilateral triangle.

Half way through forming that triangle, the market falls OUT of the triangle, free falls, then catches. Since then it has been building an enormous rising wedge, a bearish formation that usually breaks out downside.

Now that market has traded up off its October lows all the way to the bottom boundary of that triangle. Whoops! Did I fail to mention that it stands dead under where the triangle's upper AND lower boundaries cross? Double the pleasure, double the fun, double the resistance.

Only conclusion I can draw from this chart is . . .? That it will shortly drop like your English 101 grades after you stopped studying and started staying out all night drinking beer and carousing with your low-life buddies.

Count on it, semester grades WILL be published.

I have just described to you the chart of the Dow Jones Industrial average.

Today the Dow gained a gnat's moustache 21.57 points to close at 12,471.02, still stymied by the doubled resistance overhead. S&P 500 rose 3.02 to 1,295.50, also flea-bite stuff. A bad break is coming.

The US dollar today flew like an anvil over the Grand Canyon. Gave up all that it had gained on Wednesday and closed near Tuesday's low, down 52.3 basis points (0.67%) to 80.828. Changes no part of the long term outlook. Yen and euro rose today, yen slightly to 130.27 (0.12%) and euro more spicily to 1.2817 (+0.85%).

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.