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|PRECIOUS METALS REVIEW - 01/26/07||Views: 702|
|Jan 29, 2007 1:53 am||PRECIOUS METALS REVIEW - 01/26/07||#|
|PRECIOUS METALS REVIEW - 01/26/07|
In the precious metals markets this week . . .
Monex spot gold prices opened the week at $633 . . . traded as high as $654 on Thursday and as low as $632 on Monday . . . and the Monex AM settlement price on Friday was $644, up $9 for the week. Gold support is now anticipated at $643, then $628, and then $615 . . . and resistance anticipated at $655, then $661, and then $670.
Monex spot silver prices opened the week at $12.77. . . traded as high as $13.53 on Thursday and as low as $12.77 on Monday . . . and the Monex AM settlement price on Friday was $13.31, up $.45 for the week. Silver support is now anticipated at $13.24, then $13.05, and then $12.85 . . . and resistance anticipated at $13.55, then $13.76, and then $14.20.
Monex spot platinum prices opened the week at $1,161 . . . traded as high as $1,183 on Thursday and as low as $1,157 on Monday . . . and the Monex AM settlement price on Friday was $1,176, up $12 for the week. Platinum support is now anticipated at $1,168, then $1,155, and then $1,130 . . . and resistance anticipated at $1,185, then $1,205, and then $1,238.
Monex spot palladium prices opened the week at $342 . . . traded as high as $354 on Thursday and as low as $342 on Monday . . . and the Monex AM settlement price on Friday was $350, up $7 for the week. Palladium support is now anticipated at $345.55, then $338.50, and then $328.25 . . . and resistance anticipated at $355.45, then $365.05 and then $371.35.
QUOTE OF THE WEEK:
From Richard Russell, legendary financial market analyst and editor of the widely-followed newsletter, Dow Theory Letters, posted to his website (www.dowtheoryletters.com) this week:
"You read a lot about oil and gold, and the implication is that they both move up or down in lockstep together. However, it's most interesting at this juncture to see how relative strength between the two can change . . . During 2004 and most of 2005, oil outperformed gold - but that changed abruptly in September of 2005. Since then gold has been outperforming oil, with the ratio in favor of gold moving rather far above that rising trendline recently. This showed up dramatically today (1/11/07) with oil up .95 and gold up over 13 dollars.
Remember, this . . . only deals with relative strength, not absolute rise or decline. As an example, oil and gold could both be rising, but gold might be rising at a faster pace than oil. This is what occurred today.
Speaking of relative strength, as subscribers know, I frequently quote the Dow-to-gold ratio. This ratio hit a high in favor of the Dow in July of 1999. At that time, one share of the Dow would buy 43.85 ounces of gold, an all-time record in favor of stocks or financials over gold or tangibles (real money). Since then the ratio has been declining in favor of gold. As of yesterday, the Dow/gold ratio had declined to 20.38, meaning that one share of the Dow would now buy only 20.38 ounces of gold, a decline of over 52% in the ratio from the 1999 high."
"I've been watching gold with added interest, because the background for gold is turning increasingly bullish. World liquidity is enormous, and every day, it seems, we hear about another multi-billion dollar buy-out or merger. Furthermore, with the Fed intent on producing a "soft landing" in housing, we can expect the system to be flooding with liquidity. Gold, of course, is well aware of the liquidity-flood.
Gold has been trending higher, and looking at the weekly chart . . . it is immediately apparent that a major upside breakout would require gold to close above 650. The 40-week moving average for gold stands at 625, and the 10-week MA has climbed above the 40-week, with the 10-week standing at 628.50.
This inflationary tide of liquidity should be bullish for all the precious metals. As I see it, the correction in gold and silver ended last October. Since then, gold has been building a huge base. I believe the base has been completed. I like the gold picture, both technically and fundamentally."
This is not a recommendation to buy or sell.
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