Wednesday, September 29, 2010

Right Now Y'all are Watching Gold Run Away - I Can Only Hope Y'all Have Already Climbed Aboard that Express

Gold Price Close Today : 1308.50
Change : 1.90 or 0.1%

Silver Price Close Today : 21.929
Change : 0.241 cents or 1.1%

Platinum Price Close Today : 1652.60
Change : 17.60 or 1.1%

Palladium Price Close Today : 566.70
Change : 4.95 or 0.9%

Gold Silver Ratio Today : 59.67
Change : -0.575 or -1.0%

Dow Industrial : 10,835.28
Change : -22.86 or -0.2%

US Dollar Index : 78.69
Change : -0.324 or -0.4%

Sellers drove gold down $15 to $1,285 and pressed silver down 55c to 2115c. Yet both not only fought off the attack but also reached new highs, showing stringy resilience and buying power standing ready to hop onto any decline. The shorts yesterday were soundly thrashed and sent to bed without supper.

In the last two days the US dollar has lost over 70 basis points, about 0.9%. Today it shed another 32.4 bps to land at 78.690. New support -- or support today -- is 78.60, but there is no reason to expect that to hold. Rebellious rumblings from the Minneapolis and Philadelphia Federal Reserve presidents today about Quantitative Easing aren't helping the dollar, since they clearly fear more inflation. One even said there is "no danger of deflation." When thieves fight among themselves, honest people can only benefit.

O, tired, tired, and weary were stocks today! They struggled all day to climb above the Unchanged mark but the suspicious were too strong for them. Indeed, they climbed barely over unchanged thrice, but closed the day near the bottom of the range. Dow fell 22.86 to 10,835.28 and the S&P500 dropped 2.99 to 1,144.71. Know how your car feels when it's burping and running out of gas? Daily chart for stocks looks exactly like that. Get out of stocks and stay out, unless you just want to lose copious cash.
Today the Dow in Silver Ounces fell to 494.65, within two measly ounces of its 2009 low. Below that 492 mark lies a black hole.

SILVER today essayed twice to break through 2200c. Y'all remember that there are double tops but no such thing as triple tops or bottoms. So today we have seen either the beginning of a correction (if these be twin tops) or a quick consolidation building force to break through 2200c on the next try. Today's low fell at 2167c, so a lapse through that mark would be the first warning a short correction may be forming. More likely is that silver taps the third magic time on that 2200c door tomorrow and bursts on thru.

Now why would I say such a thing? Because today the GOLD/ SILVER RATIO fell through 60 to 59.670. A falling ratio, especially one falling shockingly steeply, points to silver might, not silver faintness.

After yesterday's strenuous performance, gold took a breather today with a high at $1,312.98 and a low at $1,309.25. Comex gold closed at $1,308.50, up $1.90, while Comex silver stuffed a modest 24.1c in its pockets to walk away at 2192.9c. All this trading is taking place at unheard of levels, so who can guess the next barrier, support or resistance? Go with the round numbers, like $1,325, then $1,350. A long time ago I measured a target to $1,375, so that might do, too, for a goal from which to make a small correction.

Right now y'all are watching gold run away. I can only hope y'all have already climbed aboard that express.

My wife Susan's foot surgery today didn't go as well as it might have, but all's well that ends well. Thank you very much for your prayers and kind expressions of concern.

On the way to the hospital early this morning we were listening to the BBC (Boring Broadcasting Company) and it was astounding that every tale of woe -- whether the depression in Spain or whatever -- had its source in some lame-brain government policy. The Spanish were sold EU membership on the basis that they would all get rich in the resulting boom. Well, there was a boom, today 25% are out of work, the economy is suffering a post-real-estate-bubble collapse, and their local culture has been sacrificed to the great god Government- created Prosperity. Now they have no culture and no jobs, but they still have the EU bossing them around.

When we got to Susan's hospital room I tried to watch TV, only CNN, the news, but when I had watched for about 10 minutes, I remembered why I no longer listen to TV news. Where can they recruit that many goofs? Does an 8-year old choose the news topics? Does anybody really care what over-primped zeros opine on issues above their capacity to understand? Good thing for CNN, Fox, and the others that no station has a real news department, else millions of people would be twisting their dials off to shut them down.

Speaking of goofs, last Thursday my motel handed me a free copy of USA Today, America's comic book newspaper. I didn't need to start a fire or wrap fish, so I read it. Most hilarious was the headline, "Deflation Fears Send Gold Higher." Lo, here is how desperate, how befuddled, how muddled, how off-target their thinking. A few days ago these same experts touted inflation fears driving gold. Wow, gold is still rising, but the Fed hacks are talking up deflation now, so, so, maybe deflation is really driving gold.

People like this shouldn't be turned loose with a soft-lead pencil, let alone a computer and a newspaper column. Safest course in life is, when you don't know the answer, say so. It prevents people mistaking you for an arrogant fool.

I don't normally ask favours but the hideously misnamed "FDA Food Safety Modernization Act," S. 510, will be voted on in the US senate this week. Y'all already know that these bills always institute the opposite of their names, and this one ought to be called the "Protect the Corrupt Corporate Food System and Eliminate Small Farmer Competition Act." The blasted thing is 266 pages long, filled with nasty competition- stifling bones for the same corporate food processors who bring you CAFOs, high fructose corn syrup, antibiotic resistant salmonella, and unsafe-at-any-price GMOs, etc., etc. The corporate dinosaurs are trying to strike a pre-emptive blow at small farmers and clean, healthy local food production because they know that left alone, it will take over in the next 20 years and they will lose their captive, ignorant market.

For your health and your children's, write to your US senator and tell him to vote NO on S. 510. Thanks.

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

- Franklin Sanders, The Moneychanger

© 2010, 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.