Thursday, November 04, 2010

The Gold Price and Silver Price Are Acting Like a Basketball Held Under Water, I Bought Gold and Silver Today

Gold Price Close Today : 1382.20
Change : 45.60 or 3.4%

Silver Price Close Today : 26.039
Change : 1.607 cents or 6.6%

Gold Silver Ratio Today : 53.08
Change : -1.625 or -3.0%

Silver Gold Ratio Today : 0.01884
Change : 0.000560 or 3.1%

Platinum Price Close Today : 1780.90
Change : 83.90 or 4.9%

Palladium Price Close Today : 684.25
Change : 40.80 or 6.3%

S&P 500 : 1,221.06
Change : 23.10 or 1.9%

Dow In GOLD$ : $171.02
Change : $ (2.42) or -1.4%

Dow in GOLD oz : 8.273
Change : -0.117 or -1.4%

Dow in SILVER oz : 434.78
Change : 3.81 or 0.9%

Dow Industrial : 11,434.84
Change : 219.71 or 2.0%

US Dollar Index : 75.88
Change : -0.599 or -0.8%

The SILVER PRICE chart is a 45 degree angle up with hardly a squiggle, all night and all day. It began below 2500c. At Comex's 1:30 NY time close, silver had gained 160.7c to 2603.90. I can't remember the last time that happened, but reckon it was back in 1979. Now in the aftermarket if you want to buy silver, you'll have to pony up 2630c to 2650c.

Now let's attempt to construe these markets together. As nail-biting nervous as it makes me, I have to buy SILVER and GOLD here, and did today, all I could stand. Why? Because (1) yesterday both broke into new low ground, then reversed and ended the day higher, (2) both closed higher, much higher, today, which looks exactly like a key reversal even if it ain't one, (3) both have broken through old resistance to new closing highs, and not measly but generous new highs, and (4) the Fed and US government are devaluing the dollar by inflation. Technically and fundamentally, you have to buy that situation.

But it chokes me because this is NOT a normal market. Silver does NOT gain 160c a day, nor gold $45.60. This kind of market can turn on you rattlesnake fast and bite clean to your bone.

I'm left with one of two conclusions: either this panic will pass quickly, and prices will settle down, or we have just had the first taste off Bernanke's Inflationary Buffett, and markets will only get wilder. God have mercy on us!

The GOLD SILVER RATIO today fell below 53. It is making huge drops and momentous downward progress.

Do NOT under any circumstances (other than needing to buy food for your starving children) turn loose of your gold and silver yet. Buy if you haven't already, or unless you want to wait and buy at 3400c and $1,600.

The GOLD PRICE and SILVER PRICE are acting like basketballs held under water. This hasn't near about ended yet.

I don't really watch the news, because the markets' daily charts digest all the information and report much more accurately than any coiffed and blow-dried anchor that ever nasalized a sentence. And, Dear Readers, today the charts say we are in deep trouble and a panic is developing. An international panic, perhaps, out of the US dollar.

A blind man could see that the Obama Administration and the Fed have made a decision to sacrifice the US dollar to Wall Street and the stock market. Worst part is, it won't work. The US DOLLAR INDEX right now is trading at 75.882, down 59.9 basis points (0.77%) from yesterday. This clearly carries the dollar thru support at 76 and points it toward 74.25 and perhaps lower.

The panic began overnight, and by 4:00 a.m. NY time the already fallen to 76.20. Over the next 4 hours it fell to 75.80, then fell again when the New York market opened to a low of 75.63.

But greater evidence of panic erupted in stocks, silver, and gold as investors frantically scrambled to shuck US dollars for something, anything, of value.

The DOW rose 219.71 points to 11,434.84, breaking thru 11,250 resistance and pointing higher. S&P500 rose 23.1 to 1,221.06. 'Tis pitiable that so many run so fast into so poor an alternative. Don't y'all be tempted to buy stocks. Stay away, either put your money in (1) an asset or business that produces a steady stream of depression- and inflation-proof revenue, or (2) silver and gold.

By 6:00 a.m. NYT gold had risen only to $1,365, but as soon as New York opened it shot up to $1,380, then closed on Comex at $1,382.20, up a massive $45.60, then rose further in the aftermarket to $1,392.20. On the daily chart there is a gap at $1,385 - 1,389. Above that gap gold traded sideways from $1,390 - $1,394. That gap looks and feels like an exhaustion gap, a warning to keep before your eyes.

Bear in mind that these are NOT usual markets, but an alien new world in which the currency rivets are popping out. I don't know what might happen, and neither does anybody else. There's no chart for these waters. Y'all had better become tough-minded and philosophical overnight.

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.