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Monday, April 30, 2012

The Gold Price Needs to Burst Through the $1,682 Resistance to Confirm Next Rally

Gold Price Close Today : 1663.40
Change : (0.60) or -0.04%

Silver Price Close Today : 3095.90
Change : 38.80 cents or -1.24%

Gold Silver Ratio Today : 53.729
Change : 0.646 or 1.22%

Silver Gold Ratio Today : 0.01861
Change : -0.000226 or -1.20%

Platinum Price Close Today : 1564.30
Change : 19.90 or 1.29%

Palladium Price Close Today : 681.70
Change : 23.45 or 3.56%

S&P 500 : 1,397.91
Change : -5.45 or -0.39%

Dow In GOLD$ : $164.21
Change : $ (0.11) or -0.06%

Dow in GOLD oz : 7.944
Change : -0.005 or -0.06%

Dow in SILVER oz : 426.81
Change : 4.81 or 1.14%

Dow Industrial : 13,213.63
Change : -14.68 or -0.11%

US Dollar Index : 78.78
Change : 0.075 or 0.10%

The GOLD PRICE showed the sort of action I deeply love. It opened flat, got pounded on the US open, straight down, then fast and steady rose right out of that hole to close nearly unchanged. Well, closed at $1,663.40, down sixty cents. Why do I like that action? $1,645 support, then returned to challenge $1,665 resistance. This maintains the uptrend and thumbs its nose at sellers.

On that gold chart with the falling wedge, gold did no more today than fall back for a final kiss good-bye to the upper boundary. If the GOLD PRICE can resist falling below $1,645, then it has broken out of that falling wedge and begun its next rally. Caution: there's likely to be a lot of very slowly rising mostly sideways action for a while. Remember that in the next week or so gold needs to burst through $1,682 resistance.

SILVER PRICE dropped 38.8 cents today to 3095.9c. Low came at 3057.8c, about where we saw most of the lows last week. After the usual early morning opening attack on silver, it recovered but didn't trade up as high as gold, only to the 3100c level.

This also speaks with forked tongue on that falling wedge chart. The low took silver down through the wedge's upper boundary, but silver closed above it. Silver is laboring to break out.

Last week we saw the lows (I believe) now the SILVER and GOLD PRICE are just breaking free of lower resistance levels before they start leaping.

Whatever hopes stock investors held that stocks would surge ahead today were dashed. Dow dropped 14.68 (0.11%), turned back again by the noxious miasma at 12,300. S&P backed off 0.39% (5.45) to 1,397.91. Only a Dow close above 12,325 can turn this picture positive.

US Dollar Index did nothing today to salvage its reputation. Oh, it rose 7.5 basis points -- mere dandelion fluff in the wind -- to 78.784, but after so clearly breaking down last week, such moves arouse only contempt. Dollar index could rally all the way to 79.25 for a final kiss back to the trendline it broke through, but unless it closes above 79.50, the dollar will drop further.

Euro dropped 0.11% today to $1.3239. Dollar is breaking down, euro is holding up, and only the yen seems to be profiting. Euro does, at least, barely remain above its 62 DMA (1.3206). As Friday's chart plainly foretold, the yen advanced again today. Gained 0.47% to 125.29c (Y79.81/US$1). Will move higher until the Mystic Knights of the Central Bank hit it again.

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

- Franklin Sanders, The Moneychanger
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© 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. No, I don't.