Wednesday, July 25, 2012

The Gold Price Must Burst Through the $1,610 Line then Confirm by Moving past $1,630

Gold Price Close Today : 1608.10
Change : 31.90 or 2.02%

Silver Price Close Today : 2744.5
Change : 65.5 or 2.44%

Gold Silver Ratio Today : 58.594
Change : -0.242 or -0.41%

Silver Gold Ratio Today : 0.01707
Change : 0.000070 or 0.41%

Platinum Price Close Today : 1395.10
Change : -23.40 or -1.65%

Palladium Price Close Today : 564.35
Change : -15.35 or -2.65%

S&P 500 : 1,337.89
Change : -0.42 or -0.03%

Dow In GOLD$ : $162.95
Change : $ (2.51) or -1.52%

Dow in GOLD oz : 7.883
Change : -0.121 or -1.52%

Dow in SILVER oz : 461.87
Change : -9.10 or -1.93%

Dow Industrial : 12,676.05
Change : 58.73 or 0.47%

US Dollar Index : 83.61
Change : -0.403 or -0.48%

Once the GOLD PRICE reached $1,595 today all its enemies fled the field, throwing down their weapons as they ran like scalded dogs. From yesterday's $1,567.20 close Gold bounded to $1,609.82, and gave back very little at the close. Gained a total $31.90 and closed Comex at $1,608.10.

That mashes gold's nose plumb up against the upper boundary line of that even-sided triangle I've been talking about. Up against that line, I say, and not busted clean through. They're not the same thing by a long shot. Get this straight: gold must burst through that $1,610 line to break out of the triangle, and then confirm that breakout by moving smartly above $1,630 and $1,640. Today's move was helpful and stout, but all it did was light the fuse. Gold might still re-visit the lower boundary line before finally breaking through the upper.

The GOLD PRICE gained 2.02% today, the SILVER PRICE gained 2.44%. Silver jumped 65.5 cents to close today at 2744.5, not far from the 2756 high.

All this is welcome as cold water on a blistering day, but it's not resolved anything yet. Silver, too, bumped up against the upper boundary of its flat-topped rising triangle. It must break through 2760 and then clear 2850c to confirm a breakout.

Awww, y'all be patient. It's coming, we just can't know from today's action whether that rally is here yet or not, although we know for sure it's setting up.

Some silly Austrian on the European Council resurrected from the dead today the idea of making a "bank" out of the European Stability Mechanism so it could borrow from the ECB and thus buy up all the rotten sovereign debt. This is really bright, moving the inflation back one layer, but building in a MASSIVE inflation still. Doesn't matter, nobody can think, and certainly not anybody in markets, as this stale news sent people flying into stocks and out of the dollar.

But we did get an "announcement," didn't we, as I suggested we might.

US Dollar index fell back from that 84 level like the Wicked Witch of the East facing Dorothy with a bucket of water. Lost 40.3 basis points (0.52%) to end at 83.60.

Euro was the big gainer, up 0.67% to $1.2154. Yen stayed flat at 127.93 cents (Y78.16).

Stocks couldn't make up their mind today. Most indices lost a little, like the S&P500 down 0.42 (0.03%) to 1,337.89. But the Potemkin Dow -- O! Miracle Made In Washington! -- rose 58.73 (0.47%) to 12,676.05.

Interesting is that most indices rose much higher today than they closed. Doesn't bespeak muscularity.

Since the Dow was the strongest index today, I peeked at its chart. There is say a breakdown beginning two days ago, and today's bounce up to give the lower wedge boundary line a final kiss good bye. Stocks are suffering from acute gravity poisoning.

On 25 July 1775 Maryland issued a currency depicting George III trampling Magna Carta. Sound sentiment, but bad judgment. They printed it on paper currency, which has harmed mankind and justice more than all the kings, dictators, and tyrants in history.

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

- Franklin Sanders, The Moneychanger
10:00am-5:00pm CST, Monday-Friday

© 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.