Gold

Gold was down $16 for the week, closing at $881.70 (-1.78%).

The daily chart of GLD shows price being repelled by its upper Bollinger Band, and heading down towards its middle band.

MACD appears about to make a negative cross over. Histograms have receded towards zero. Volume contracted during the decline.

The weekly chart of gold is a bit more constructive compared to the daily chart above.

MACD kissed but did not cross over and down, and instead headed back up.

Histograms seem to have leveled off, and have made a lower high in the process (at least for the moment).

Gold has not performed as strongly as silver since mid-December 2007.

Silver

Silver was down 0.16 for the week, closing at $16.22 (-0.95%). This was only about half the loss that gold suffered, so silver did well in comparison.

The daily chart of SLV shows price being repelled by the upper Bollinger Band similar to GLD's daily chart.

SLV is testing its first line of horizontal support, which is about half way between the upper and middle Bollinger Bands.

Note that the bands have widened quite a bit with the last recent surge up in price.

GDX

The GDX is shown because it is actively traded. The index was down hard on the week, losing -7.78%.

Notice that volume expanded on the decline - not the best of occurrences. Horizontal support is shown by the blue line.

MACD has put in a negative cross followed by a positive cross within the last several weeks (contained in the blue circle).

It appears to be starting to flatten and perhaps curl over. It remains to be played out. Histograms are receding back towards zero.

The chart below compares the performance of the euro to the gold exchange traded fund (GLD). The two track each other fairly closely.

Inflation and the debasement of the currency, or loss of purchasing power, are two different things, as the chart below suggests.

Gold is not related to debt - it is the antithesis of debt. The purveyors of debt fear gold, as well they should.

Gold stands watch over the debasement of the currency and the loss of purchasing power - its eyes keenly focused on the task at hand.

January 21, 2008

About the author: Douglas V. Gnazzo writes for numerous websites and his work appears both here and abroad. Just recently he was honored by being chosen as a Foundation Scholar for the Foundation for the Advancement of Monetary Education (FAME).

Disclaimer: The contents of this article represent the opinions of Douglas V. Gnazzo. Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Douglas V. Gnazzo is not a registered investment advisor. Information and analysis above are derived from sources and using methods believed to be reliable, but Douglas. V. Gnazzo cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions. This article may contain information that is confidential and/or protected by law. The purpose of this article is intended to be used as an educational discussion of the issues involved. Douglas V. Gnazzo is not a lawyer or a legal scholar. Information and analysis derived from the quoted sources are believed to be reliable and are offered in good faith. Only a highly trained and certified and registered legal professional should be regarded as an authority on the issues involved; and all those seeking such an authoritative opinion should do their own due diligence and seek out the advice of a legal professional. Lastly Douglas V. Gnazzo believes that The United States of America is the greatest country on Earth, but that it can yet become greater. This article is written to help facilitate that greater becoming. God Bless America.