|Gold Price, $/oz||1,193.90||-13.30||-1.10%|
|Silver Price, $/oz||15.72||-0.81||-4.91%|
|Dow in GOLD $s||295.54||1.34||0.46%|
|Dow in GOLD oz||14.30||0.06||0.46%|
|Dow in SILVER oz||1,086.15||46.59||4.48%|
|US Dollar Index||88.11||-0.59||-0.67%|
Yesterday was a wild day to miss. The ruble lost 19% against the dollar, down some 54% this year. Half of the Russian government budget comes from oil revenues, and with oil plunging the ruble looks like rubble. Add to that western economic sanctions against Russia, and the ruble landed in truble.
The Not-So-Invisible hand of the Nice Government men may have been a shadowy presence behind silver and GOLD PRICES
in the last two days. Between currency market panic and a crashing stock market, they're liable to get pretty twitchy. In any event, trading in silver and gold was most unusual, just not quite right.
Let me give you both the last days. Here are charts:
Yesterday the GOLD PRICE
fell $14.80 (1.2%) to close $1,207.20 on Comex. However, in the aftermarket it plunged to $1,193. Today the gold price retraced virtually all yesterday's loss on the chart, but closed down $13,30 (1.1%) at $1,193.90 on Comex. All this happened in a range from $1,187.40 to $1,225.
When you look at gold's End of Day chart, you'll see that the ranges for these two days are nearly identical, but the GOLD PRICE
closed at the very bottom of the range. Now here's an perplexing question. Wouldn't a fall in the ruble increase some Russian gold buying? Or, is the Russian central bank selling gold reserves to raise dollars or manipulate its exchange rate in the midst of crisis?
During today's trading the gold price remained below $1,200 until about 5:30 a.m. Eastern, then began to inch up. By 8:30 it had pushed to $1,223.85, but by noon it was below where it started, and flattened the rest of the day.
Net of all this is that the gold price fell below its 20 and 50 DMA, but remains in the trading channel established off the 6 November low, so its uptrend remains unwounded.
Yesterday the SILVER PRICE
lost 49.2 cents (3%) to close Comex at $16.527. However, it lost another 40 cents in the aftermarket to end the day at $16.115.
Today was worse. Silver tumbled 81.2 cents (4.9%) to $15.715 on Comex.
As good as the chart looked on 1 December, it looks that bad today. If I draw a line from that 1 December low to Fridays trading, I come up with a bearish rising wedge, and a breakdown out of the wedge the last two days, far below the 20 and 50 DMAs. If I draw a line from 1 December's low to today's low, it's a little better, but remains a rising wedge.
Silver's relative weakness has driven the GOLD/SILVER RATIO
back to the high, in fact, on the EOD chart to a new intraday high at 77.88 (versus 77.60 at 28 November). However, it didn't close up there, but closed at 76.06.
This ain't right. Either this will turn out very, very bad or it will pass quickly. By very, very bad I mean some sort of panic like 2008, always a possibility in the LFS (Looney Financial System) we suffer under.
Ain't fiat money grand? Russian banks noted that Foreign Exchange demand was three to four times it normal level. That makes it seem Russians fleeing the ruble were responsible for yesterday's weird currency market results: the dollar index rose 0.41%, the euro rose 0.63%, and the yen rose 0.91%! Yen appears to be the greatest beneficiary of ruble flight.
Currencies weren't the only lunatic asylum yesterday, but I'll touch on the others below.
Stocks yesterday avalanched, Dow down 315.51 points (1.79%) and the S&P500 down 33 (1.62%). Today they tumbled again. Dow plunged 111.97 (0.58%) to 17,068.87. S&P fell another 16.89 (0.85%) to 1,972.74. Since the 5 December intraday highs, both indices have fallen 5.1%.
More: both indices have now closed two days below their 50 day moving averages and left their 20 DMAs behind, yea, long, long ago. At the rate they are now falling, both are in a few days' striking distance of their 200 DMAs (Now 16,861.17 and 1,947.44). Gravity is in the driver's seat, and won't be dislodged easily.
I keep on hearing folks repeat the nostrum that "falling oil prices are good for the economy." I invite them, and y'all, to look at a 20 year chart of oil's price charted against the S&P500 and tell me if you still believe that. You can view on the right:
By the way, West Texas Intermediate Crude closed UP 0.94% today at $55.93/barrel, first half of a key reversal.
Dow in gold fell again today, below and away from its 50 DMA. It lost 0.69% to close at G$295.40, headed much lower.
Not so the Dow in Silver. It rose 2.08% to S$1,401.02 silver dollars (1,083.60 oz) bounding back into the megaphone pattern it had fallen out of, and even above its 20 DMA (S$1,393.04 or 1,077.43 oz). This altereth not the downtrend.
US dollar index fell hard today, 0.67%) to 88.11. Nearing the deadly 87.50 line, but not there yet. It slaps my attention across the jaws that the greatest gainer from the flight from the ruble was not the US dollar yesterday, but the yen. Today the yen gained 1.17% to 85.76 while the US dollar index lost 0.67%. Euro also gained 0.6% to $1.2511.
Euro has broken out of its bullish falling wedge and rallied to its 50 DMA, but it's not moving very fast. On the other hand the Yen, while not above its 50 DMA, looks far peppier and has closed above its downtrend line from the October high.
On 16 December 1967 in Memphis, Tennessee I married Susan Leavell Askew, and I have been glad of it ever since. She and I were both three years old.
Aurum et argentum comparenda sunt -- -- Gold and silver must be bought.
- Franklin Sanders, The Moneychanger
© 2014, 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 or 18 ounces of silver. or 18 ounces of silver. US $ and 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.