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Friday, May 28, 2010

Once the Gold Price Pierces $1,218, 'Twill Race, for $1,250, the Last High, and Then Proceed to $1,300

Gold Price Close Today : 1,212.10
Gold Price Close May 21st: 1,175.70
Change: 36.40 or 3.1%

Silver Price Close Today : 18.411
Silver Price Close May 21st : 17.633
Change 77.80 cents or 4.4%

Platinum Price Close Today: 1,548.70
Platinum Price Close May 21st: 1,504.90
Change: 43.80 or 2.9%

Palladium Price Close Today: 462.70
Palladium Price Close May 21st: 436.25
Change: 26.45 or 6.1%

Gold Silver Ratio Today: 65.84
Gold Silver Ratio May 21st: 66.68
Change: -0.84 or -1.3%

Dow Industrial: 10,136.63
Dow Industrial May 21st: 10,193.39
Change: -56.76 or -0.6%

US Dollar Index: 86.781
US Dollar Index May 21st: 85.360
Change: 1.42 or 1.7%


"The week don't lie," as they say. In the past week the silver price rose 77.8c (4.4%), gold rose $36.40 (3.1%), the gold/silver ratio fell 0.84 (1.3%), Dow fell 56.76 (0.6%), and the US dollar index rose 1.42 (1.7%). But that doesn't tell the whole tale by any means.

Technically the Dow today fell out of a bearish upward wedge (formed Wednesday and Thursday), leaving 10,250 high and dry and undefeated. The day's performance was wretched. Around 2:00 p.m. "friends" came in to buy and drove the Dow up nearly 125 points. Ahh, but when the bells of 3:30 struck, all the weekend rats left the sinking ship, flopping the Dow down to 10,136.63, down 122.36. S&P500 dropped 1,089.41, down 13.65. Remember what I said yesterday about bear market rallies? "Sudden, sharp, and short-lived." Dow now sands below its 200 day moving average as well as all the others.

I don't get it. How do Wall Streeters hawking stocks live with themselves? How can anyone deny that stocks are locked in a primary down trend (bear market)?

The DOW IN GOLD DOLLARS on 26 May hit a new low at G$169.93 (8.220 oz), rupturing support at G$177 (8.562 oz). Next stop? G$144 (6.966 oz). Ultimate stop? $G$41.344 (2.000 oz) or less, maybe $20.672 (1.000 oz).

And look at the DOW IN SILVER OUNCES. From its present 550.57 ounces the DiSoz stands a mere 65 ounces above its last low at 485.26. Ultimate target? 32 ounces or less to buy the whole Dow.

Crazy, did you say? Crazy? Well, the DiG$ topped at 44.75 oz in gold ounces in August 1999. Since them stocks have lost more than 80% of their value against gold. They will lose another 80% from here. Ditto silver.

US DOLLAR INDEX, preparing for the long weekend, bounced off 85.85 to rise 59.6 basis points to 86.781. Yet remaineth the buck in a short term down trend, and likely will grudge its way down to 82.50. That would be a short term correction of the uptrend
begun in December. Of course, that won't hurt silver & gold a bit.

Again this day the forces of darkness sallied forth from Mordor to pound gold's helmet with their clubs, maces, meat-axes, and selling. Yea, they dove gold to it's knees at $1,202.50 -- their best shot. It availed them nothing. Gold raised itself to its full height, slashing back at is foes and closing up thirty whole cents at $1,212.20 on Comex.

Stalemate continues. Three days now gold has closed about the same price. Double closes, let alone triple, often lead to a trend change, but sometimes for a solid platform for a rally. It's a bull market. In bull markets, riddles are usually answered on the upside.

Gold's price to beat is $1,281. In spite of all attacks gold remains above its 20 day moving average (1,205.88) and of course its 50 and 200 DMAs. Lo, 'tis June, and seasonally that bodes the same for gold sales that 4th of July bodes for fruitcake sales -- nothing good. NEVERTHELESS, once the gold price pierces $1,218, 'twill race, yea, race for $1,250, the last high, and then proceed to $1,300. Seasonally it sounds impossible, but gold has held on and will forge ahead, Mordor notwithstanding.

SILVER'S enemies did everything but borrow the winged monkeys form Oz's Wicked Witch of the East. Yea, they forced silver to retreat as low as 18.22 -- in vain. About 11:30 silver mounted its Silver Charger and fought its way out of that hole all the way to 18.411 at Comex close, losing only 4.6c from yesterday.

Friends, now shift metaphors with me. Silver has found a new floor at 18.20. It has fought off attack after attack and not only held its ground but advanced as well. Folks! We got us an uptrend!

As long as silver remains above 18.00 next week it should be a profitable week. THE GOLD SILVER RATIO has formed a huge even-sided triangle. This pattern may break either way, up or down. The ratio ran to the upper boundary of the triangle (67.635 on 21 May), then collapsed to 64.776 today. Ratio is about to slice through the 50 DMA (64.41) and the 200 (63.94). Bottom triangle boundary lies about 63.245. A slip through that trapdoor and boom! The ratio visits 58, then 52.

Let us talk about aluminum, spelled "aluminium" if you live in Great Britain, where they have a surplus of I's so the government forces them to place them where they're not needed. It is so difficult to extract that in the early 19th century it cost more than gold. Napoleon III fed his best guests on aluminum plates while the trashy guests had to eat off gold. Then the process for extracting it electrically was discovered, dragging down the price if you had access to lots of cheap electricity. After World War II aluminum took the American consumer by storm with aluminum foil, pots and pans, etc., but especially aluminum deodorants.

Then the croakers (to whom I proudly belong) began bringing up questions. Maybe the increased aluminum use might have some causative force in the epidemic of Alzheimer's disease? (No, it doesn't signify anything that both begin with "Al-".) Chief exposure to aluminum for most folks is their daily dose of deodorant, soaking that aluminum through your skin all day. But try, Oh, try, to find a deodorant that works but contains no aluminum. Try to square the circle. Try to find an honest politician.

Here's the answer: zinc oxide ointment. Rub it on the night before generously, then wash it off in the morning. I don't know why it works better this way, but it does. That will be the last time you use it for three to fourteen days, depending on how much sweating you do. And a three ounce tube costs about $1.80, and lasts a year or so

And I don't use aluminum pots and pans, either. By the way, flouridation increases several-fold the amount of aluminum leached into boiling water from the pan.

Y'all enjoy your weekend!


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Thursday, May 27, 2010

Today's Action Hints the Gold Price Will Break Upwards

Gold Price Close Today : 1211.90
Change: -1.50 or -0.1%

Silver Price Close Today : 18.457
Change 16.2 cents or 0.9%

Platinum Price Close Today: 1559.10
Change: 37.80 or 2.5%

Palladium Price Close Today: 464.80
Change: 27.55 or 6.3%

Gold Silver Ratio Today: 65.66
Change: -0.663 or -1.0%

Dow Industrial: 10,259.06
Change: 284.61 or 2.9%

US Dollar Index: 86.24
Change: 0.57 or 0.7%

'Twas a vexatious day, with the gold price down a tadge and the silver price up stoutly. How do you cook that mess?

Overnight the GOLD PRICE remained range-bound by $1,210 and $1,216. Slap on the open sellers attacked, driving gold to $1,205.50, the day's low, boom! Straight down. Gold never became disoriented, traded sideways an hour, then mounted on mighty wings to its $1,218.30 high. Balance of day until now was spent range trading between $1,210 and $1,214. The stalemate has not ended, and the tension is still there. Sellers' weakness was exposed when they couldn't even drive gold to $1,200, but resistance at $1,215 - 1,218 is still blocking gold. A big break is coming, one way or the other, and today's action hints gold will break upwards.

The SILVER PRICE remains out of step with the gold price, trying to pull ahead. Silver sure enough reached that $18.50 ceiling today ($18.56 high), but couldn't leap that hurdle. However, it held on to close on Comex up 16.2c at $18.457, top of the day's range. More than that, it closed above its 20 day moving average ($18.44), first confirmation/sign of a turn upwards. Hard not to conclude that the silver price will jump tomorrow, break through $18.50 and run to $19.00.

Beneath the market watch $1,195 and $18.00. Falls through those prices would turn silver and gold sour, though that remains the least likely outcome

Right on time, the US dollar index crashed through 86.40 today, pointing to a trek toward 82.50 before it turns around. Dollar dropped 87.7 basis points today -- a large 87.7 -- and is now trading at 86.244. today's fall makes the double tops on Tuesday and Wednesday appear to be exactly that, tops. Dollar has completed a long upmove and so it's time for a rest.

No doubt the rising dollar made the Nice Government Men awfully nervous, too. They don't want it rising too fast, and they work with their buddies in the European Central Bank to manipulate exchange rates. How could a buddy stand back when a buddy's fiat currency is seeking the center of the earth? Can't, and stay buddies.

A friend made the most insightful, and probably correct, statement I've heard about the Euro crisis. Purpose of the crisis (my friend believes that things don't just happen, but somebody causes them to happen) is to force further integration of European Union, that is, strip the constituent states of existing powers and increase centralization. After the dust clears, only the Eurocrats and ECB will be left standing. Deutschland, auf Wiedersehn! France, au revoir! Espana, adios! Italia, arrivederci! Tchuess, Freiheit!

Right on cue, also, the Dow rallied 284.61 to close at 10,259.06. S&P500 rose 35.16 to 1,103.11. Now there is a bare chance this might be natural market action and not painting the tape, as stocks yesterday were right oversold. Today they jumped 175 points straight up on the open, then range-traded 10,150 to 10,200, unable to break out until 2:00 p.m. EDT. Thereafter the Dow edged up then at the very last moments before the close jumped about 50 points. This perfectly examples a bear market rally: sudden, sharp, and short lived. Stocks will resume their fall. Woe awaits the unwary!

An Ozzie friend today sent me an email with statistics from 1909. Average US worker's yearly wage was $200 to $400 a year. 90% of all doctors had no college education, but attended medical schools. Heroin and morphine were available over the counter at drugstores, no prescription.

Progress? Think about it.

There's a lesson here about gold and silver's undervaluation. In 1909, both were universally money. $200 - $400 a year = 9.675 troy oz. gold to 158.68 troy ounce. $200 - $400 a year = 158.68 to 309.36 oz. silver per year. Right, and they could live on that. Equivalent of $25,000 - $45,000 per year, that implies a gold price of $2,325.58/oz and silver price of $145.46/oz

Think more. No FDA. No regulations or controls on drugs or food or hardly anything. Everyone was free to compete with the corporations. Doctors weren't miseducated by pharmaceutical companies.

Think.

Progress is an illusion.


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



One Way or T'other the Gold Price Will Move Big Tomorrow

Gold Price Close Today : 1211.10
Change: 15.40 or 1.3%

Silver Price Close Today : 18.292
Change 52.9 cents or 3.0%

Platinum Price Close Today: 1521.30
Change: 11.30 or 0.7%

Palladium Price Close Today: 437.25
Change: -2.95 or -0.7%

Gold Silver Ratio Today: 66.21
Change: -1.105 or -1.6%

Dow Industrial: 9,974.45
Change: -69.30 or -0.7%

US Dollar Index: 87.04
Change: -0.01 or 0.0%

One way or t'other the GOLD PRICE will move big tomorrow. $1,210 acted as a firm bottom today, as $1,215 acted the top. Forces selling and forces buying were evenly balanced. One wrestler will slip tomorrow. Comex gold closed up $15.40 at $1,213.40, but most of the progress from $1,203 to $1,215 was made before 6:00 a.m. Eastern, long before New York was awake & sipping Java. Stalemates ooze instability and cannot long abide. If gold stumbles it might hit $1,200, $1,195, even $1,185. If it clears $1,215 little resistance awaits shy of $1,250. Watch for an upside leap.

The SILVER PRICE has fallen out of step with gold, pulling at the leash. As if it were still angry about its humiliation yesterday on options expiry, at 10:00 the silver price shot from $18.20 to $18.38. Lo, this perch was too lofty, and silver tumbled to close Comex at $18.292, up 52.9c. Yet in the aftermarket the silver price dipped as low as $17.97. Now (9:40 CDT) the silver price has worked its way back to $18.20. What a traders market!

Despite silver's turn back at $18.38 it has stoutly defended the nether reaches of $18.00 and stands poised to batter at $18.60 again.

If you don't like the silver price today, wait till tomorrow, when you'll get to pay more.

Oooooooooooo. Dow looked sick today. Rose on open and climbed straight to 10,179 by 10:45. Next it traded sideways 10,150 to 10,060 until 2:30 EDT when it began edging toward 10,050. About 3:20 it broke and fell to 9,952. Closed at 9,974.45, down 69.3 and only a piddling distance off the low. S&P500 fell 6.08 to 1,067.95. Flee stocks, O flee.

What looked so sick today? The Dow tried to repair Tuesday's damage from that drop to 9,775 -- tried, and failed. Sorry, this game resembles duelling with hand grenades: you don't get second chances. Think of a bar fight. First chair cracks over a head, and the whole room is immediately galvanized by the announcement that something is afoot, something new. Just so the Dow below 10,000. All that psychological bragging and marketing invested in touting 10,000 on the way up now slices doubly deep and sharp on the way down.

Yet watch out! Stocks are a wounded rattlesnake, able to turn at any time and rally sharply. Don't get cute and short stocks unless you know what you're doing.

US DOLLAR INDEX turned down today also. Made a high at 87.388 and is trading now 87.113. That's 33.3 basis points higher than yesterday, but much lower on the day.

I'm not sure what I am seeing on the dollar chart, but it will clear tomorrow. Either it double topped Tuesday and Wednesday at 87.40 with lower prices pending, or it is consolidating for a further up move. A close above 87.50 turns the dollar up, a close below 86.40 turns it down. Wait and see.

Dollar is as overbought as bent-can beans on sale in Boston, but overbought can get more overbought. On the other hand, notwithstanding the long uptrend the dollar might be ready to fall and rest awhile, visiting 82.50 before it resumes its mountain climb.


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Tuesday, May 25, 2010

Gold and Silver Options Expired Today

Gold Price Close Today : 1198.00
Change: 4.20 or 0.4%

Silver Price Close Today : 17.763
Change -21.9 cents or -1.2%

Platinum Price Close Today: 1510.00
Change: -19.00 or -1.2%

Palladium Price Close Today: 440.20
Change: -9.20 or -2.0%

Gold Silver Ratio Today: 67.44
Change: 1.055 or 1.6%

Dow Industrial: 10,043.75
Change: -22.82 or -0.2%

US Dollar Index: 86.78
Change: 0.57 or 0.7%

Ahh, options expired today. What's that? SILVER and GOLD PRICES were dive-bombed by selling? All those $1,200 strike gold call options and the $18.00 and $17.80 call options expired worthless? What's that? The option writers, having fleeced the rubes, get to keep the premiums?

No, no, not in America! Say it ain't so in the land of the free markets and the home of the slave. Whoa, whoa make that Brave.

Today the US DOLLAR INDEX clumb and clumb. Broke through 86.50 last night reaching a high at 87.41 about 6:00 a.m. Eastern time, then dropping the rest of the day. Yet it had risen so far that it still finished the day up 57.3 basis points at 86.779.

Top of my head says today was only the upward reaction wave of a downward correction (A-down, B-up, one more C-down to come), but what does that mean? You can balance a flower pot on top of my head, and I don't even work for the government or a bank. A close above 87.40 gainsays my suspicion.

On open today the Dow dropped like a shot buzzard off a high roost. Bam! From 10,061 to 9,775, thump. Traded sideways in a range of 9850 - 9930 until 2:00 p.m., when the Nice Government Men or Mysterious Market Forces (pick your own poison) ran it up to close down only a smidge.

Hmmmm. Down 286 - 130 points all day, then PRESTO-CHANGEO -- the Dow rises above the psychologically crucial 10,000 to close at a cosmetic 10,043.75, down only 22.82. That's not strength, friends. How long can this farce play?

Get out of stocks. Frightful carnage awaits. No mystery what hit gold last few days: options expiry. Today gold was carefully herded below $1,200 to close on Comex up $4.00 at $1,198. Yet shortly after that close it rises over $1,200 and now trades at $1,208. Sure.

Gold's low has been posted for this move. Buy. Hundreds of option writers were delivered today from a fate worse than honesty, namely, the specter of paying off on 17.80 - 18.00 calls. Thus today silver had to swim upstream against gold, determined like a salmon heading for spawning to close down regardless. So on Comex silver closed down 21.9c at a tame 17.763, but in the aftermarket now tradeth at 18.08. Just random luck, I reckon.

Silver has found a new bottom at 17.50. As I write silver is stretching its legs for a run tomorrow. A close above 18.20 resumes silver's rally; a close below 17.50 dooms it downward. Silver might also see a rise to 1820c, one more fall to, say, 18.00 before taking off again.

Either way, buy silver.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Monday, May 24, 2010

If the Gold Price Closes Above $1,242 the Rally has Resumed

Gold Price Close Today : 1,193.80
Gold Price Close May 14th: 1,227.40
Change: -33.60 or -2.7%

Silver Price Close Today : 17.982
Silver Price May 14th : 19.202
Change -122.00 cents or -6.4%

Platinum Price Close Today: 1,529.00
Platinum Price May 14th: 1,714.40
Change: -185.40 or -10.8%

Palladium Price Close Today: 449.40
Palladium Price May 14th: 524.80
Change: -75.40 or -14.4%

Gold Silver Ratio Today: 66.39
Gold Silver Ratio May 14th: 63.92
Change: 2.47 or 3.9%

Dow Industrial: 10,061.96
Dow Industrial May 14th: 10,620.16
Change: -558.20 or -5.3%

US Dollar Index: 86.253
US Dollar Index May 14th: 86.269
Change: -0.02 or -0.0%

"Bull markets climb a wall of worry," the market proverb says, and it's true. Somebody always stands by ready to tell you why this bull market has ended or can go no further. After all, the bull wants to shake off as many riders as possible, and he doesn't play fair.

Lately the discovery glands of newspaper and internet gurus have been squirting overtime, filling their bloodstreams with visions of the gold price crashing. One reader sent me an article that said gold was in danger of falling to "$450, its cost of production," which only proved that the author knoweth not sic 'em from come here. Industrial demand means very little to a silver and gold bull market, because they are driven entirely by monetary demand, new demand hitting the market at the margin, the demand for silver and gold as money.

One specter the croakers like to conjure up is "deflation," by which they usually incorrectly mean "a fall in prices" rather than the correct meaning, "a decrease in the money supply." While there are strong forces driving prices down -- collapsing real estate bubbles, collapsing debt, collapsing consumer demand -- these are not deflation, and deflation will not occur. Here's a rough outline of what I think will happen.

Economic activity will continue to shrink as more and more bad debt and bad investments made under the influence of the last 100 years' inflation continue to surface. Even governments will default on their debt. Because they are locked into their stupid Keynesian paradigm, when consumers won't spend governments will step up to the plate as "spender of last resort." There is no limit to how much they will spend, but the spending won't work today any better than it worked for Roosevelt in the 1930s. To enable government spending, central banks will create new money, a.k.a., "inflate." They will continue creating money even if that creation causes a hyperinflation, because they are true believers in Keynesian orthodoxy, and because all politics today is built around the idea that government must manage the economy. (You and I know that means "the people who own the government manage the economy for their own benefit.") You see, the "Elite" knows that we hoi polloi can't be left to run our own lives. No telling what we would buy, sell, smoke, drink, or how many children we'd have without their benevolent dictatorship to guide us. Shucks, people might even drink raw milk!

Today's reality is that politics trumps reason, common sense, history, experience, morality, everything. Ergo, all social and political forces are lined up solidly behind forcing silver and gold ever higher, at least for the next five years, maybe ten. Ben Bernanke, Barack Obama, and all their condign ilk in other governments are all laboring mightily for you, silver and gold investor!

Wherefore, when you hear or read jaundiced jeremiads against silver and gold, remember the ancient market proverb, "Bull markets climb a wall of worry."

What launched me upon this meditation? Only that silver and gold prices took a wound last week, and fell to the ground. Out crawl the croakers from their lurking places to re-state theories old and new that "prove" the silver and gold bull isn't a bull at all, but an nine year, well, well, splutter, merely a nine-year run up. You just have to toughen up your eardrums to these arguments and keep your eyes on the primary trend.

Now to today's markets.

On Friday the US DOLLAR INDEX bottomed about 85.20, falling from an 87.50 high last Wednesday. Schizophrenia, thy name is dollar! Given that the Euro's infection has, like malaria, only relaxed its grip & not departed, the dollar is likely to remain strong for a time, maybe reach 90. Throwing the ultimate curve ball at small minds, last week the dollar moved WITH gold. Clearly, gold has decoupled from paper currencies and is now behaving as an independent alternative to all the paper monies. Dollar index today is trading at 86.53, up 87.7 basis points. 86.5 has it blocked right now. More chastisement is coming in the next few days, but dollar probably won't be whipped lower than 85.

On Friday stocks rose 125.38 to close the Dow at 10,193.39. Today the Dow lost 131.43, to close at 10,061.96. Correct me if I am wrong, but for all that action, doesn't that net to a loss? Pity the poor Nice Government Men! Keeping stocks afloat is a bigger job than Sisyphus had in Hades, rolling that boulder up the hill.

Stocks are bouncing on their 50 week moving average (10,005.75), and languish way below their 200 day moving average (10,266.56). Psychological support enters at 10,000, but that will crumble quickly and only add downward momentum once broken. Two bottoms at 9869 and 9918 stand to catch a fall, but once stocks fall through there only an empty elevator shaft remains. Beware of a sharp rally at any time, normal behavior in a bear market.

Dow in Gold Dollars fell out of its year long trading range and fell fast to the previous low at roughly G$175 (8.466 oz). It has traded up a bit off that low, but today has fallen through and will speedily plunge toward G$145 (7.014 oz).

Where's a limb for me to crawl out on? Oh, right here! I'm guessing the gold price posted its low for this corrective move last Thursday at $1,166.50. On the chart this appears as a spike-like low from which gold has steadily climbed. Ceiling now blocks gold at $1,195. If my guess is right, then gold won't drop below $1,175 again. It should rise to roughly $1,220, then fall again to test the low (say to $1,187 - $1,195) for a final kiss good-bye before single-mindedly resuming its rally.

If the gold price closes above $1,242 the rally has resumed without further correction. If gold closes below G$1,166.50 you'll know my interpretation is dead wrong. Today gold closed up $18.10 at $1,193.80, good show.

Because of my absence I had to reconstruct Thursday and Friday prices, but the 5-day chart I'm looking at sports a roughly 17.45c bottom on Thursday and 17.40c on Friday, dead on the 20 week moving average (17.41c). That might hold, and it might not. Between those two bottoms the same chart shows a tight band of trading between 17.80 and 17.60, followed by a rise through the weekend. Today silver traded up to 18.06, dropped back 17.71, then jumped to 18.06c again. It has since backed off
to 17.90, leaving an "M" on today's chart. That looks like silver successfully defending the gains made over the weekend and today.

Where's that limb again? I'll say that 17.40 was the low. Moving the opposite to stocks, silver lost 39.7c on Thursday, 6.3c on Friday, and gained back 35.1c today to close at 17.982c on Comex.

Okay, volatility has arrived and it is beating our nerves with a bamboo cane. Only cure is to lift your eyes up to the horizon, the long term, and remember why you bought silver and gold in the first place, and where they are headed.


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Wednesday, May 19, 2010

Silver and Gold Prices are Perched Precariously Because of Their Recent Huge Gains

Gold Price Close Today : 1214.30
Change: -13.40 or -1.1%

Silver Price Close Today : 18.855
Change 2.0 cents or 0.1%

Platinum Price Close Today: 1674.20
Change: 9.30 or 0.6%

Palladium Price Close Today: 497.75
Change: -6.10 or -1.2%

Gold Silver Ratio Today: 64.40
Change: -0.780 or -1.2%

Dow Industrial: 10,510.95
Change: -114.88 or -1.1%

US Dollar Index: 87.28
Change: 1.08 or 1.3%

More confusion and panicky behaviour today. The Euro chart looks like a waterfall, down 1.33% to $1.217. Yen fell 0.42%. Europeans are being beaten now with the same stick that beat America in Fall 2008. Will it get worse yet, and spread to the US? Jerk to pieces stock markets around the world? Man, don't ask me! I'm just trying to keep my own car out of the ditch until the day ends.

The GOLD PRICE was as contradictory and hard to read today as I've ever seen it. Yesterday and Friday the bottom was $1,218. That was breached in early trading before the US opened, then after the open the gold price began climbing and reached $1,220. Whoops, it fell again to $1,211, then closed Comex down $13,40 at $1,214.30 -- sloppy, ill-omened, below that $1,218 support. Then out of nowhere about 14:00 Eastern time in 30 minutes gold reached $1,229! Since it has eased off and now is trading around $1,226. Closing below $1,218 support leads one logically to expect gold to follow through with lower prices. Instead, it turns around and heads to the support where it has closed the last three days ($1,228.8, $1,227.4, $1,227.7). That says that tomorrow the gold price ought to climb higher. If it trades over $1,230 it might panic the shorts. Downside we have to reckon with a possible fall to $1,196.

The SILVER PRICE traded as choppily as the gold price today. Yesterday it made a $17.70 low, today traded down to $18.62. However, that drop today looks like a V-bottom, because most trading yesterday and today was supported at $18.80. After closing up 2c at $18.855, silver climbed over $19.00 in the aftermarket. Today's trading clearly display's an uptrend that will hold as long as the silver price abides above $18.90.

Markets are so spooky that they might break either way. SILVER and GOLD PRICES are perched precariously because of their recent huge gains. All we can do is watch the range boundaries of support and resistance and wait. Gold above $1,230 brings higher prices, gold below $1,214 brings lower.

The US DOLLAR INDEX ended our quandary today by rising a massive 107.8 basis points. It is now trading at 87.283 on its way to 89.5. Rally has resumed. Believe me, 'tis not dollar strength driving this, but fear and Euro weakness. As a reader recently wrote me, The dollar is only the best looking horse in the glue factory. Yet in the land of the walking dead, the three-legged horse is king. Or something like that. I may have mixed too many metaphors & proverbs there.

STOCKS succumbed again today to gravity, whose path of least resistance is down. The Dow made an early stab at crossing 10,650, peaked at 10,718.86 quickly, then fainted the rest of the day. At closing it had lost 114.88 points to end at 10,510.95. S&P500 lost a bigger 16.14 and closed 1,120.80. Y'all might conceive that I enjoy reporting this, but I don't. Millions of people are watching their investments evaporate, and remain trapped in a hopelessly obsolete worldview. About 10,440 fear will again strike investors with the urge to sell, setting the Dow up to lose another 250 points.

This will be the last commentary I send this week. My mother, who was one month shy of 93, passed away last night. I have to finish my monthly newsletter for paid subscribers tomorrow then travel to Arkansas for the funeral. God willing, I will write y'all again on Monday. The psalm says, "Precious in the eyes of the Lord is the death of his saints."


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Monday, May 17, 2010

Chart Hints That the Gold Price is Correcting From the Friday High

Gold Price Close Today : 1227.70
Change: 0.30 or 0.0%

Silver Price Close Today : 18.835
Change -36.7 cents or -1.9%

Platinum Price Close Today: 1664.90
Change: -49.50 or -2.9%

Palladium Price Close Today: 503.85
Change: -20.95 or -4.0%

Gold Silver Ratio Today: 65.18
Change: 1.261 or 2.0%

Dow Industrial: 10,625.83
Change: 5.67 or 0.1%

US Dollar Index: 86.19
Change: -0.04 or -0.0%

Today lies a fog over everything, and I am searching for some light. Bob the Technical Genius reminded me that all the stock markets in the world appear to be positioned for gargantuan plunges. In that event another panic for liquidity would ensue, prompting terrorized investors to throw everything saleable onto the fire. In that sort of panic where confidence in financial markets is shrinking, the GOLD PRICE fares better than the SILVER PRICE. In the aftermath, silver recovers much faster than gold. In the meantime, silver owners sweat.

But I can't escape the idea that the world of illusion is dissolving. After decades of make-up, manipulation, sleight-of-hand, and old-fashioned unashamed fraud, the public has grown weary and gunshy, so the old illusions no longer deceive. From that I conclude that the only value you own is the one you control. Tangibles, tangibles, I want tangibles, whether a factory or a restaurant or farm that can produce of stream of unfailing revenue, or silver and gold in my hand, I want something real that I control.

In fall of 2008 a financial panic took stocks down 34.4% from 1 September to 20 November. In the same period gold lost 12.5% and silver lost 32.6%. Sounds like Waterloo for silver and gold investors, huh? Sound again. By March 2009 stocks had lost a total 43.2% from their September open while silver and gold were recovering nicely, thanks. Gold was up 15.2% from Sept. '08 and silver up 31.5% from the Nov. 08 low. In March 2009 Silver was down only 1.8% from Sept. '08 and up 48.3% from its Nov. '08 low. By the time they peaked in December 2009, gold had risen from the November 2008 lows 72.7% and silver 119.3%.

More pertinent, though, was the backwardation that Fall 2008 produced. Silver and gold deliveries stretched out 4 - 6 weeks and premiums rose to 20% to 40% over the spot price. There was no gold or silver to be had at the paper market prices; physicals all backwardated.

Since I don't recommend day trading but long term trading that aligns the investor with the long term ("primary") trend, even big drops in the prices of physical silver and gold don't bother me too much. I've been doing this long enough to have experienced several of these comebacks. And I don't want to pick up the phone to order silver or gold only to hear somebody quote a six week delivery. I'd rather get my physical metals and hold them through thick and thin, counting on the primary trend to bring it all right. And of course, I don't want any of my money tied up in paper markets, whether stocks or ETFs.

Call me crazy, but wait until after the last inning.

The GOLD PRICE today mystified. On Comex it closed down a mere 30c. at $1,227.70. Low today was $1,218.90, but now gold is trading at $1,222, down $5 from the close. Five days chart hints that gold is correcting from the Friday high, and today is completing last leg of that correction. I will be satisfied if gold remains above $1,200, even $1,190. Normally I would expect to see gold stiffening up and moving higher tomorrow, but what's normal nowadays? That aftermarket drop today bothers me. Like a fat mosquito buzzing around, you know he's up to no good.

SILVER'S five day chart is awfully choppy. The $18.80 level held, after $19.00 gave way. If silver violates $18.80 then it could fall to $18.40 (20 DMA) or $18.00. Situation is so cloudy it leaves me bewildered. Platinum and palladium were weak, too.

Gold trading tomorrow above $1,230 and silver above $19.00 would put me into a buying mood. Otherwise, I wait and watch.

Today the US DOLLAR INDEX hit a new high for the move at 87.063 (using the high late Sunday our time) but closed lower. Day's low was 86.051 and it's now trading 86.150 down 0.076. Surging to a new high then closing lower is "key reversal" behaviour that often signals a turnaround. If the dollar follows through tomorrow with the second half of this signal (a lower close), then it has turned around and will head lower. One would expect some sort of snap-back rally by the Euro after all it's been kicked around, but the whole world is so unsettled nothing logical works any more, only emotion. Until the dollar confirms with a lower close tomorrow, we have to presume it remains in an uptrend overbought as it is.

Just for reference, the Euro rose 1.01% today (dollar fell 0.09%), and yen rose 0.79%.

It was a typical day in the stock market, down all day then a Secret Buyer (Wink! Wink! Toward the NGM) stepped in 30 minutes before close to bring the Dow in up a colossal 5.67 points at 10,625.83. S&P500 rose 1.26 to 1,136.94. Let us, from intellectual curiosity alone, plumb the depths, however. Dow's low was 10,436.06 and S&P500's 1,114.96. Resistance has now become 10,650. Gravity is strong, buyers puny.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Friday, May 14, 2010

Silver and Gold Prices are Breaking Out Into the Wild, Furry, and Unpredictable Phase

Gold Price Close Today : 1,227.40
Gold Price Close 7th May : 1,210.00
Change: 17.40 or 1.4%

Silver Price Close Today : 19.202
Silver Price Close 7th May : 18.429
Change 77.30 cents or 4.2%

Platinum Price Close Today: 1,714.40
Platinum Price Close 7th May: 1,661.90
Change: 52.50 or 3.2%

Palladium Price Close Today: 524.80
Palladium Price Close 7th May: 512.70
Change: 12.10 or 2.4%

Gold Silver Ratio Today: 63.92
Gold Silver Ratio 7th May: 65.66
Change: -1.74 or -2.6%

Dow Industrial: 10,620.16
Dow Industrial 7th May: 10,380.43
Change: 239.73 or 2.3%

US Dollar Index: 86.269
US Dollar Index 7th May: 84.542
Change: 1.73 or 2.0%

GOLD and SILVER PRICES gave you an opportunity to buy a on-sale prices today while they chastened my optimism from yesterday. The GOLD PRICE climbed as high at 1,294.15 today, a hair higher than Wednesday's top. However, that looks like a B-wave in a correction, topping a little higher than the end of a fifth wave. If that is correct, then today's
seen-only-by-eyewitnesses-on-Comex-floor low at $1,217.72 marked the correction low. Allegedly that occurred at 11:00, then gold levitated to 1238 and levelled off, spending most of the rest of the day between 1230 and 1235. Comex close was $1,228.80, down $13.90. This damages the technical picture not one little iota. As long as gold remains above $1,210 the rally is red-cheeked and healthy.

SILVER gave up 16.4 cents to close at 19.476 on Comex. Yet ponder the week: silver gained 4.2% to gold's 1.4% and the gold/silver ratio fell 2.6%. Silver's must hold level is 1880c.

Now is come the time that silver must prove itself, breaking through 19.80 and then clearing the Spring 2008 high at 20.68. One could hardly have asked for better trading than this week, an it appears the short correction has ended and the rally will resume on Monday. Of course, enthusiastic optimism is easy here, so it's worth reminding ourselves that these moves have been very fast, and therefore spongy. Fast moves can be paid back on the downside as fast as they gained upside, so at these heights we have to temper our joy. Silver and gold both remain in a 15-20 year bull market that began in 2001 and are only now breaking out into the wild, furry, and unpredictable phase. Grab yourself a handhold, 'cause you're going to need it!

The US DOLLAR INDEX finished the day near the 86.29 high, resting at 86.269, up a long-legged 106.2 basis points. Is there no bottom to the world's thirst for dollars? The RSI is an outrage, the MACD phenomenally overbought, yet it climbeth still. I have to guess that at 86.87 (the April 2009 intraday high, a rebound high coming off the previous 89.62 peak) that the dollar will falter & stop to catch its breath. However, when irrational factors -- financial panic in Europe over sovereign
defaults & the Euro's future -- drive markets, markets become, well, irrational. So you are watching either the top of this long move from 74.23 in November 2009, or, you've seen two legs in this rally with a correction about to bite before the last leg
carries the dollar to 89.50-ish.

STOCKS dropped early & stayed there all day. The Dow lost 1.51% or 162.79 points, closing at 10,620.16. (S&P stopped at 1,135.68, down 21.76 or 1.88%.) Lows today around 10,540 now become the trigger for more leapfrogging downward. Once the Dow crosses that line, not much support lies between there and the psychologically weighty 10,000 line.

The stock market crash is not limited to the USA. Dr. Robert McHugh noted today that China's SSEC index has fallen 25% since August 2009 highs & 20% since January. European, Canadian, and Australian stock markets are all falling. See www.technicalindicatorindex.com, expensive but well worth the price.

The Dow's weekly chart shows a bear market that plunged in 2008/2009, rallied to its 200 week moving average in a typical bear market rally, and has now resumed its downward plunge. If you still have stocks, better shuck them in a hurry.

The DOW IN GOLD DOLLARS has collapsed, sinking past the Dec 2009 low and working on March 2009 lows now.

From its present G$178.86 (8.653 oz) the DiGS will head for G$140 (6.773 oz).


What is it about the internet and email that makes people petulant, rude, and insolent? Is it the anonymity? I don't get many, but from time to time an email arrives so rude and insulting that if the person were present I would slap his jaws, old as I am. I reckon they know I can't reach through the computer screen & slap their jaws, but to a man they are still too cowardly to use their entire name and address. I certainly don't mind people disagreeing with me, indeed, I welcome it because it makes me re-examine my own position. I don't even object to people ribbing me and making fun of my bad calls on the market. That goes with the turf. My children beat you to it.

However, just because I do someone the service of sending a free daily commentary that contains the fruit of my 30 years in gold and silver, shrivelled and wrinkled though that fruit may be, I have given no one the privilege of insulting me or speaking rudely. Since the presence of such persons is virtual and therefore renders it impossible to slap their jaws in person, henceforth I will do the email equivalent,
namely, hit the delete button at the first hint of rudeness. I won't tolerate bad manners. I loathe to mention this because 99.99% of y'all are kind, helpful, and generous, but I won't tolerate bad manners, not even in 1/100 of one percent.



Thursday, May 13, 2010

Silver and Gold Price Rally is Intact, Merely Taking a Rest, Offering Y'all Bargain Prices

Gold Price Close Today : 1228.80
Change: 13.90 or -1.1%

Silver Price Close Today : 19.476
Change 16.4 cents or -0.8%

Platinum Price Close Today: 1735.40
Change: -5.60 or -0.3%

Palladium Price Close Today: 542.90
Change: 0.15 or 0.0%

Gold Silver Ratio Today: 63.09
Change: -0.181 or -0.3%

Dow Industrial: 10,782.95
Change: -113.96 or -1.0%

US Dollar Index: 85.44
Change: 0.61 or 0.7%

###########
Editors Note:

goldprice.org had a denial of service (dos) attack yesterday, causing the site to load slowly for some visitors and not at all for a brief period for some visitors. We worked closely with our hosting company and server management team to defend against the attack. We can only speculate on the motivation for this attack on the day that the gold price reaches the highest price in history...

We would like to announce a new section of goldprice.org which is our Gold Price Calculators. You can also find a link to the calculators on the middle of the front page of goldprice.org.

The Gold Price Calculators Include:

- Gold Holdings Calculator - How much is your gold worth
- Gold Coin Calculators - How much is any gold coin worth
- Exchange Rate Calculator - All major exchange rates
- Scrap Gold Calculator - How much is your scrap gold worth
- Gold Jewelry Calculator - How much is any Karat of gold worth
- Gold Coins Exchange Calculator - What change to give in gold coins
- How much gold can you buy with your currency
- How much is any amount of gold worth in any currency
- Weight Converter - Convert between ounces, grams and kilos
- Premium Calculators - How much will you pay to buy or sell gold
- Coming Soon - Gold Price Archive tool to find the price of gold in any currency on any day.

Click Here to use the calculators. You can also find a link to the calculators on the middle of the front page of goldprice.org

End Note.
########


Franklin Sanders Commentary:

Make-up, make-up, make-up! It's all in the make-up in this Age Of Illusions, where actors and charlatans become presidents and politicians. So also with markets today.

About New York opening time the US DOLLAR INDEX, which was already straining at the leash, crossed through 85.00, shot to 85.20, traded sideways between 85 and 85.20, then backed off for a running start and finished the day selling at 85.44, up 61.2 basis points. This breakout pushes the dollar's next target to 86.80, maybe as high at 89.50. Shucks, if the Euro manages to trash itself, maybe it will go higher still. It mattereth not a whit, because silver and gold will both far outpace the dollar, rest assured.

STOCKS today rapped on the gate of 10,900, and the gate burst open with a 900 lb. troll who promptly stomped the Dow down 113.96 points to close at 10,782.95. Large feet fell on the S&P500's head as well, kicking loose 14.23 points for a 1,157.44 close. Please, please, get out of stocks and stay out. What holds the future? More pain. More tears. More mourning. More beatings.

"Make-up!" was the call of the Nice Government Men today, seeking to take some shine off of gold. Thus we heard of -- but never saw -- the cosmetic close below 12.30 at
$1,228.80, down 13.90 on Comex. Yea, behold, a mystery spike took gold down below $1,236 beginning about 12:30 EST, spiking down under heavy selling, and immediately after 13:30 EST (Zut alors! Closing time on Comex!) rising above $1,232 and trading $1,232 - $1,235 till now. What a lovely job of painting the tape! Or, alternatively, HUGE buyers are waiting at $1,230 for any opportunity. Either way, the gold price is due a breather here. Maaaybe gold can begin rallying again tomorrow, if enough shorts decide they don't want to spend the weekend biting fingernails and sweating bullets.

SILVER got the same make-up job gold received. "Somebody" sold it off beginning about 12:30, then about 13:30 it rose again to 19.40 - 19.50. 19.80 was today's high, and becomes the number to beat. Silver closed on Comex down 16.4c at 19.476.

Silver and gold rally is intact, merely taking a rest, offering y'all bargain prices.


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Wednesday, May 12, 2010

Today's Performance Shouts the Gold Price has Much Further to Climb

Gold Price Close Today : 1242.70
Change: 22.80 or 1.9%

Silver Price Close Today : 19.640
Change 36.8 cents or 1.9%

Platinum Price Close Today: 1741.00
Change: 36.80 or 2.2%

Palladium Price Close Today: 542.75
Change: 8.10 or 1.5%

Gold Silver Ratio Today: 63.27
Change: -0.025 or -0.0%

Dow Industrial: 10,896.91
Change: 148.65 or 1.4%

US Dollar Index: 84.85
Change: 0.38 or 0.5%

The GOLD PRICE is way overbought, more than the SILVER PRICE, but overbought can continue for a long, long space. Today the gold price rose an another amazing 22.80 to close on Comex at $1,242.70. Whew. Takes my breath away. This very strong performance today after slightly piercing old benchmark highs yesterday shouts that the gold price has much further to climb. Anytime here gold might correct to breathe, but it will be shallow. It sends chills down my spine to say this at $1,242, but sound trading demands you buy the breakout.

Gold today rose 0.87% while SILVER rose 1.58%, nearly twice as much. It may not mean much to those of you who have never witnessed a horse running away, but silver has the bit in its teeth and is not about to slow down. With a 19.70 high today silver exceeded its December 2009 intraday high. It stands a bare 100c below its 2008 all time high at 2068c. On Comex today silver closed at 19.64, up 36.8c. Silver's RSI & MACD have moved to the overbought zone, but not as strongly overbought as gold.

The GOLD/SILVER RATIO dropped today to 63.27:1. Critical here is that 62:1 level. Once that breaks, silver will begin to outperform gold magnificently.

THE US DOLLAR INDEX dropped as low as 84.20 overnight, then climbed in US trading to 84.85, up 38.4 basis points. Dollar is stymied at 84.90 - 85.00. It has now stretched out two days trapped between 84.70 & 84.90. this is either in a failure or continuation pattern. Since the Dollar is already trending upward, this pattern should break out sunward.

One must suspect that the sharks in European banks and other parasites are swarming the euro with short sales. Drive it down, drive it down, sell more and drive further down, then cover and go long. It's a classic predatory raid. Long as it continues the dollar will rise, and silver and gold along with it.

STOCKS rose today, the Dow by 148.65 points to 10,896.91 and the S&P500 by 15.88 to 1,171.67. This will cease to be amusing when stocks reach Dow 10,965, where fierce and pitiless resistance awaits in ambush. Dow in Gold Dollars has broken down badly, and today stands at G$181.27 (8.769 oz.). Long term, you will know time has come to sell gold and buy stocks when two ounces of gold or less will buy the whole Dow.

On this day in 1780 Charleston, South Carolina fell to British forces, yet here is an example of history's unforeseeable tergiversations. The British seemed to carry all before them with a brutal policy of suppressing guerrillas in the South. Alas, they only succeeded in arousing the sleeping Scotch-Irish of the Upcountry and Over the Mountain in North Carolina and Tennessee. Advancing north against his superior's orders, Lord Cornwallis thought to invade Virginia. At King's Mountain in October 1780 and Cowpens in January 1781 American forces annihilated or whipped British cavalry, forcing Cornwallis eastward. By October 1781, Cornwallis was trapped by Washington and the French fleet at Yorktown, Virginia, and the American Revolution, which had been gasping for its last breath in May 1780, emerged utterly victorious. It was one of the most amazing turnarounds in history.


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Tuesday, May 11, 2010

"Realizers" are Racing into Silver and Gold and out of the Central Bank Fiat Currencies

Gold Price Close Today : 1230.70
Change: 19.50 or 1.6%

Silver Price Close Today : 19.272
Change 74.2 cents or 4.0%

Platinum Price Close Today: 1704.20
Change: 7.8 or 0.0%

Palladium Price Close Today: 534.66
Change: -0.06 or 0.0%

Gold Silver Ratio Today: 63.86
Change: -1.505 or -2.3%

Dow Industrial: 10,748.26
Change: -36.88 or -0.3%

US Dollar Index: 84.47
Change: 0.31 or 0.4%

Today smashed to splinters (once again) those theories that "stocks and silver and gold prices move opposite to the US Dollar." In fact today the US $ index tucked a hefty 31.1 basis points under its belt, while the Dow fell 37 points and the GOLD PRICE leapt, mounted, surged, sprang $19.50 at Comex Close and another $10 afterwards. The SILVER PRICE rose 74.2c [sic].

Y'all are now watching what I have long suspected would appear in this bull market namely, the uncoupling of SILVER and GOLD PRICES from all fiat currencies as truly alternative monies. Think about that. Thus the Euro and Yen fall, dollar rises briskly, but instead of seeking shelter in the dollar "realizers" around the globe are racing into silver and gold and out of the central bank fiat currencies. Much more economic and monetary pain, alas, will follow, but at the last the turmoil will mount so high that all the fiat currencies will be onto the landfill and silver and gold will be the only monies left standing.

Here's something passing odd. Because I am writing this from home I opened an old version of this file from 22 March 2010. I wrote then about stocks, "Stay away. Yet 45 days and mourning will haunt stock markets." Weird: 6 May 2010 was exactly 45 days later, when stocks dropped 1,000 points. Be advised here and now that was a coincidence. Don't expect a repeat.

The US DOLLAR INDEX is staring at one or two more down days before resuming its rally. Rally will reach toward 86.50. The euphoria over the trillion dollar Greece bailout thinned remarkably today as sobriety bit in. Appears that mobs crowded into the US dollar today and gold.

Historical perspective is needed to evaluate silver's rise properly. At spring 2008 peak on 5 March 2008 the silver price hit $20.684. In the secondary peak on 14 July 2008 silver touched $19.175. On 2 December 2009 silver topped at $19.295.

Today silver gobbled up a massive 74.2c to close on Comex at $19.272, right at last December's high, and above July 2008. Right now (7:15 p.m. CDT) the silver price is fetching $17.33. Now combine silver with gold's $30 burst, and the picture clarifies sharply into a breakout. Yes, surely, surely metals must keep these gains tomorrow and improve them, but there is simply too much impetuosity to these moves, coming atop of great jumps last week, to expect this to be a top. I leave the matter for the market to settle, but I expect much greater gains.

The gold price today closed Comex up $19.50 at $1,219.90, then added another $10 afterward. Now it is trading at $1,231.70. Today's close surpassed 2 December 2009's high close at $1,217.40, and surpassed the 2 Dec. intraday high, $1,226.40. Gold only needs to prove this is a breakout into a new rally by closing higher tomorrow or the next day.

Sound strategy is to buy the breakout. The gold price is building a rally that will put a new floor under it at $1,200. New floor for silver will be $18.80.

Closes below $1,185 for the gold price and $18.50 for the silver price would gainsay all of my outlook above.

Confirming the bullish picture for metals, the Gold/Silver Ratio has plunged in the past four days from 68.4 to 63.3 today. Low today knocked on the door of 62:1, the most critical level. Once the ratio falls through 62, it will topple quickly toward 50.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Monday, May 10, 2010

Silver and Gold Prices Will Move Much Higher and Stocks Will Move Lower

Gold Price Close Today : 1200.40
Change: -9.60 or -0.8%

Silver Price Close Today : 18.530
Change 10.1 cents or 0.5%

Platinum Price Close Today: 1696.40
Change: 34.50 or 2.1%

Palladium Price Close Today: 530.25
Change: 17.55 or 3.4%

Gold Silver Ratio Today: 64.78
Change: -0.876 or -1.3%

Dow Industrial: 10,785.14
Change: 404.71 or 3.9%

US Dollar Index: 84.26
Change: 0.39 or 0.5%

Ahhh, it turned out it wasn't natural causes that drove silver up a dollar in 20 minutes last Friday. At 11:15 central time the US Commodity Futures Trading Commission issued a warning to the market to remind traders that speculative trading limits apply throughout the trading day as well as at the end of trading. Exactly at that time both silver and gold prices surged upward, leading to the conclusion that more than a few traders were out there breaking the law with oversized and illegal short positions they suddenly decided to close out. Cheezit, boys, the cops!

Yesterday the Eurocrats laboured till late in the night, burning the taxpayers' midnight oil to figure out how they would bail out the banks. Final plan calls for E750 billion ($954.83 bn) in form of E440 bn from loans from Eurozone governments, E60 bn in EU emergency loans, and E250 bn in IMF loans. Happy Days Are Here Again sang the Euro-stock markets, rising 5 - 6 %. US markets rose about 4.5% (Dow closed 10,78.14, up 404.71 & S&P closed at 1,159.73, up 48.58.)

The US DOLLAR INDEX fel to 82.0909 in Euro trading, then rose on the US open and kept climging steadily the rest of the day. Now trading at 84.256, up 38.7 basis points. Dollar will move higher.

Obviously, only the lunatic can play these markets. Dow was down 350 on Thursday, down 140 on Friday, then up 405 today. Nuts. Markets are showing signs of schizophrenia. Trends will resume: down for stocks, up for US $ and down for Euro, up for silver and gold.

Meanwhile gold opened down at $1,198.85, traded up above $1,200, dipped again, and after 1:00 EST never fell below $1,200. Now trading at $1,200.90, and Comex closed down $9.60 at $1,200.40. Eye-catching here was gold's power to close above $1,200. Most likely gold will see several days of sideways to lower trading without much loss, maybe to $1,185 briefly. A close above $1,210 carries gold up to the last high close at $1,217 then runs wild above that.

SILVER marched in place today, trading between an 18.18 low and an 18.62 high. Comex closed up 10.1c at 18.53. That 100c rise on Friday left a very strange chart. Silver might fall to 17.80 (while market digests Greek bailout) but could just as well work sideways not falling below 18.20. The barrier silver must break to move sharply higher is 18.60c Once thru that gate, 'twill run.

Who can judge such markets, where government surprise partie abound? I can't. I am sure that silver & gold will move much higher and stocks will move lower, but what they might do in the next few days is anybody's guess. Most of all, do NOT short silver or gold. Don't even short stocks. Take or hold your long positions in silver and gold, and be thankful for the relative peace and quiet there.

On this day in 1934 incredible dust storms swept away an estimated 300 million tons of topsoil from Arkansas, Colorado, Texas, and Oklahoma. Instead of grazing the prairie sod, for which it is perfectly fitted, farmers plowed it up, breaking up the
soil's sod protection. The tuition fee was centuries of topsoil. It always pays to work WITH nature, not against it. Then one remembers, and wonders with trembling, that "no till drill" has taken over agriculture so that today farmers actually hit their fields with powerful plant-killer chemical that kills every living thing in 24 hours, leaving behind a vast grave of brown. Then they come back and plant monoculture Genetically Modified corn or soybeans without tilling, just drilling the seed into the ground. The tuition fee for these chemicals, which kill also all microbial life in the soil, and GMO foods will be high. Nature is vengeful.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Friday, May 07, 2010

Any Higher Gold Price Close Now Will Send The Gold Price Shooting Toward $1,300 Fast

Gold Price Close Today : 1,210.00
Gold Price Close 22nd April: 1,180.10
Change: 29.90 or 2.5%

Silver Price Close Today : 18.429
Silver Price Close 30th of April: 18.611
Change -18.20 cents or -1.0%

Platinum Price Close Today: 1,661.90
Platinum Price Close 30th of April: 1,739.40
Change: -77.50 or -4.5%

Palladium Price Close Today: 512.70
Palladium Price Close 22nd of April: 551.55
Change: -13.95 or -2.5%

Gold Silver Ratio Today: 65.66
Gold Silver Ratio 22nd of April: 63.41
Change: 2.25 or 3.5%

Dow Industrial: 10,380.43
Dow Industrial 22nd of April: 11,008.61
Change: -628.18 or -5.7%

US Dollar Index: 84.542
US Dollar Index 22nd of April: 81.896
Change: 2.65 or 3.2%

This week markets re-taught us the one lesson that everyone must learn to survive: once the bullets start flying it's too late to buy a pistol. No one is clever or fast enough to trade markets like these in an economic climate that ranges from the ludicrous to the surrealistic, when the depression will continue for many more years, with more bank failures & now, it seems likely, widespread sovereign debt defaults (governments not paying their debts). No, you can't trade these markets, you can only identify the primary (15 - 20 year) trends and establish your position when markets are calm, not when the fight breaks out in the bar and people are running for the exits and smashing chairs over each other's heads.

We saw this in the panic of fall 2008, when physical silver and gold price backwardated from paper prices. IF -- if -- you could get delivery of physical silver and gold then, you paid a premium of 15% to 40% over the paper prices. Of course, for a while nobody could get delivery, which was quoted at four to six weeks.

Likewise Obama's and Bernanke's Nice Government Men, with help from the market, rigged up a giant rise off spring 2009's stock market bottom. That gave poor souls holding stocks an unnatural opportunity to sell them at prices above Dow-10,000, even 11,000. Now stock-holders have received the final, ultimate, last-&-never-to-be-repeated warning to sell all stocks & put the proceeds in silver & gold. Are the stocks in an IRA, a 401(k), a pension fund, or just some nostalgic portfolio the investor can't bring himself to treat like an investment? Matters not, get rid of them, while a few days of calm ensue & the NGM are goosing up the stock market again.

Buy gold, buy silver, buy a farm or a revenue-producing, depression-proof business, but y'all had better do something while you still can. When the bullets start flying, it's too late to buy a pistol.

Ponder this from Dr. Robert McHugh of www.technicalindicatorindex.com: "The Wilshire 5000 Index, which is really about 6,000 stocks, is essentially the entire U.S. listed stock market. This index tells us the U.S. stock market has lost $1.0 trillion of value over the past two weeks. All the gains over the past 2 months have been wiped out in the past two weeks. It took just two weeks to destroy two months of gains." (I strongly recommend Dr. McHugh's letter to all serious investors.)

Today I saw something I have never seen in 30 years of trading silver and gold. From 11:20 to 11:30, silver jumped from 17.60 to 1830. By 12:10, it had leapt again to 18.69. Yes, up 109c in 40 minutes. I reckon I am not the only one who expects silver
to play catch up.

The US DOLLAR INDEX today traced out a double top around 85.20. May take a rest here and lean back and correct for a day or so. The Greek crisis calls two things into question: the Euro's ability to survive, and all sovereign debt. Investors are scurrying to safety, and in a panic that means the US Dollar (up 3.5% this week) and gold (up 2.5%). You can imagine what gold priced in Euros did. I heard late today that the Canadian mint has shipped so many coins to Europe they are down to selling off the shelves.

Will the Euro survive? That is the question. The southern countries and Ireland enjoyed a property boom and now are enjoying a mortgage and banking bust. Euro-crats solution? Drain the taxpayers, bail out the banks, starve the southerners. This isn't a recipe for currency success.

Will governments default on the bonds? Most likely the weaker ones will, but "weaker" is a relative term when all of them have a balance sheet that looks like it's been dating vampires.

Had I been the Nice Government Men today, I would have backed off and let markets settle before manipulating further. Weight against them is simply too mighty. Looks like they cut stocks loose for today, provided they didn't fall another thousand ticks.

Dow today closed down 139.89 at 10,380.43 while the S&P fell 17.27 to 1,110.88. Support at 10,300 held today, but below that lies merely the psychologically important 10,000 mark, then atmosphere, which holdeth up not much of anything. Don't get cute and short the stock indices, because they are like a wounded rattlesnake. You thought you ran over it and killed it, but when you bend over to pick it up it sinks its teeth into your hand. Sudden rallies possible without warning.

Nor did beating up on GOLD avail them aught. Today's low came about 11:30, then gold just breasted the waves and shot ahead to a $1,212.60 high. On Comex gold closed at $1,210.00, up $13.10. Still trading around that mark. December intraday high was $1,127 and high close was $1,217.40. Any higher close now will send gold shooting toward $1,300 fast. That you will probably see next week, unless the panic sufficiently evaporates to take pressure off gold. That would also let the US dollar down.

From here gold needs to remain above $1,196 or risk losing the ground it has gained.
SILVER astounded me today. I knew it was due to leapfrog a little, but a dollar in one day? Silver now stands about where it stood when this interruption began. First hurdle is 18.80, then the old high at 19.45. At the rate silver is going it might get there by Tuesday. But remember that moves like today are "spongy," and can vanish as fast as they materialized.

The GOLD/SILVER RATIO dropped today to 65.7 from 68.4 earlier this week, but will not clearly be trending down until it falls through 62:1.

The DOW IN GOLD DOLLARS smashed through support this week and closed today at G$177.34 (8.579 oz). It lost G$15.50 (0.75 oz) this week, and should fall rapidly below G$150 (7.256 oz).

The old market proverb says, "Get right and sit tight!" More fulsomely, identify the primary (long term) trend, invest in it, and watch it rise. If you have rid yourself of stocks, bonds, and dollar-denominated assets and with the proceeds bought silver and gold, you can now "Sit tight." Stay at it.

Bottom Line: Silver and gold rally was interrupted by a financial panic last week,then helped by it. Rally has now resumed with vigor. Buy silver and gold.

My comments yesterday about the silliness of government regulations requiring Braille on a sign for the janitor's closet in Office Depot brought a number of reader comments. Best was the question, Why put Braille under the buttons on Automatic Teller Machines? How can a blind person read the screen? Maybe the government will mandate a Braille screen? I don't know how to do it, just do it!

Best of all, as another reader wrote, is Braille on drive through ATMs. How would a blind person drive, let alone read the screen?

Speaking of governments, I have been thinking about Greece. 'Tis an object lesson in how modern government/banking combines wreck economies and frustrate national character. If you have ever known any Greeks, you know that you could pick just about any one of them up off the street in Athens or Nafplion, transport him to Chicago, drop him penniless and shirtless on the street, and come back a year later to find him running his own restaurant with a 40 page menu. Or, if you set him down on a desert
island, within two years he'd have tourists flying in to eat there. Now how can a people so universally successful & hardworking outside of Greece suffer under a failing economy in their own country? Simple: banks & government. Get the government and the banks out of the way, and in two years the Greek economy would be humming like a hive of happy bees. Alas, but no! Rather, Euroland will bail out the banks and wreck the taxpayers and economies in the rest of the union. Look thru the lies: it's not the Greeks who are being bailed out, but the banks.

Enjoy your weekend!

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Thursday, May 06, 2010

This Gold Price Rally is Not Near its End, and in Fact I am Targetting $1,375

Gold Price Close Today : 1196.90
Change: 22.30 or 1.9%

Silver Price Close Today : 17.493
Change -1.8 cents or -0.1%

Platinum Price Close Today: 1648.90
Change: 1.10 or 1.10

Palladium Price Close Today: 502.45
Change: -1.50 or -0.3%

Gold Silver Ratio Today: 68.42
Change: 1.344 or 2.0%

Dow Industrial: 10,520.32
Change: -347.50 or -3.2%

US Dollar Index: 84.80
Change: 0.72 or 0.9%

Peace be with you all!

You've heard of Black Friday and Silver Tuesday? Well, welcome to Souvlaki Thursday! The day I pick to take my wife shopping in Florence just happens to be the day the Dow drops 1,000 [sic] points, the US dollar index rises 72 basis points, and gold jumps $35.

About 4:30 I returned to my office and on the Internet my son had pulled up Money Central at msn.com. One side headline whined, "Trading error reportedly blamed." I fell off my chair and rolled on the dusty plastic mat laughing. What brilliant propagandist in DC thought that honker up?

At 2:00 p.m. the Dow was cruising along down about 170 points when an Unseen Thumb and Forefinger pulled the plug. Next anybody knew the Dow had plummeted 1,000 points to 9,869.62. It was down 998.5 points or 9.2%, at which juncture the Nice Government Men swung into action and manipulated the market up 650.7 points in less than an hour. Great work, fellows! The Dow closed down only 347.8 points at 10,520.32. S&P Low came at 1065.79, down 100 points or 8.5%. It closed at 1128.15, down 37.72 or 3.4%.

Ahh, friends, that don't happen in nature.

Let me dose you with a little perspective. On 19 October 1987 the Dow fell 508 points or 22.6%. 28 October 1929, fell 6.3%. Next trading day, 28 October 1929, fell 12.7%. On 29 October the Dow fell another 11.7%. On 4 Nov 1929 it dropped 5.8%, then another 9.9% next trading day. So today's low down 998.5 points was a 9.2% drop, ranking right up there with the really big ones.

For all intents and purposes today's low hit the February low, and fell far below the 200 DMA, now at 10,184.89. That's it, the breakdown from the broadening top. Gurus and paid pimps will tell you 'tis only the backwash of the passing Greek crisis. Greek, Schmeek -- that may have served as the catalyst but the weakness was already festering and 'twas the weakness that broke down, not Greece.

Now the sirens of Wall Street will do their best to sing a lovely song to drown out today's cacophony, but stop your ears! Stay out of stocks.

If I were the Nice Government Men and "tasked" (as they like to say in Governmentspeak) with keeping the leaky stock market afloat, I would be working overtime tonight calling hedge fund and pension fund and mutual fund managers and company presidents and ordering them to buy stocks like mad tomorrow or face SEC and EPA problems the rest of their natural lives. Ergo, be ye not surprised if stocks recover sharply tomorrow. 'Twill make now a whit of difference: the silver thread has been cut, the crystal bowl shattered, the milk spilt, the barbecue sauce poured down the drain. What comes next, despite all the camouflage, persiflage, and decoupage from Wall Street & its kept media, will be lower stock prices. It may sound obvious, but stating the obvious is my only poor gift but a valuable one in an Age of The Numb: stock market rallies do not begin with thousand point drops.

As I was thus musing, I happened to read an e-mail from a subscriber who wrote about today's stock market results: "Chauncey Gardner would now say, `The roots are now severed.'" Again, I hooted and hollered. He alludes to the movie, Being There. Video clip at http://www.youtube.com/watch?v=YgGvd1UPZ88&playnext_from=TL&videos=oA4JpU4caxM.

Laugh yourself sick.

Dow in Gold Dollars today dropped from G$191.27 (9.252 oz) to G$181.70 (8.790 oz), and fell through the bottom of the trading range.

I reckon the interpretation that gold had broken out over $1,160 resistance and dropped back yesterday to confirm that breakout with a "final kiss good-bye" proved correct. Comex gold leapt up $22.30 at $1,196.90, slicing through resistance like Rommel slicing through North Africa. Gold kept right on rising in the aftermarket and the prices you see below are based on a current $1,208.20.

This gold rally is not near its end, and in fact I am targetting $1,375, yet expect a vicious and fierce counterattack from the NGM tomorrow. Might give you a buying opportunity.

Speaking of NGM, we come to the conundrum of silver's lagging. The Gold/Silver ratio shot up to 68.42:1 today. Lo, we might well ascribe this to natural causes, namely, worldwide financial anxiety (not to say panic) driving investors more into gold than silver for safety. Okay, I can buy that, but remember: I am the kind of paranoid who always asks questions when he witnesses an anvil spontaneously shoot up into the air.
Then my mind harkens back to the 1990s and that unutterably lengthy period when silver flatlined along with gold, even in a decade where the silver supply shortfall amounted to 1.5 billion (with a "B") ounces.

And I scratch my paranoid scalp, and think, "If I were trying to suppress gold's price, I'd first sell lots and lots of paper silver to drive silver down because experienced traders watch that ratio and expect the two to move together. Couldn't have gold flat with silver rising. Besides, I get much more bang for my manipulating buck by selling in the much smaller silver market.

But then, I am well known as a paranoid who doesn't even believe in the Tonkin Gulf Incident or lone assassins or tooth fairies or government's fundamental beneficence or Ben Bernanke's genius.

There I am in Office Depot today and I needed to use the restroom. I walked into the hall where the restroom doors were, and I noticed on one side a "Lounge" sign with Braille letters underneath. Then there was the Women's restroom with Braille, and the Men's restroom with Braille. Then there was the Janitor's Closet with a Braille sign under the word "Janitor", and I began to wonder, "How many blind janitors work at Office Depot?" I've never heard of a blind janitor before. Do they have a nationwide Union of Blind Janitors? At last it dawned on me: this is your government in action! I don't know the law or regulation, but nobody but the government would require that. Nobody.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Wednesday, May 05, 2010

The Dollar's Ascent Has Not Been Able to Break the Back of Gold's Rally

Gold Price Close Today : 1174.60
Change: 6.00 or 0.5%

Silver Price Close Today : 17.511
Change -30.7 cents or -1.7%

Platinum Price Close Today: 1647.80
Change: -30.80 or -1.8%

Palladium Price Close Today: 503.95
Change: -17.80 or -3.4%

Gold Silver Ratio Today: 67.08
Change: 1.492 or 2.3%

Dow Industrial: 10,868.12
Change: -58.65 or -0.5%

US Dollar Index: 84.17
Change: 0.87 or 1.0%

US DOLLAR INDEX rose 87.1 basis points to 84.17 right now, near the high of 84.307. The dollar rose quickly on the open, then fell slowly to 83.75, and rose steadily the rest of the day. While the intraday trading doesn't look like a panic, what do you call a market that rises 180.4 basis points in three days when it normally trades 20 to 30 bps per day? A slow stampede? Clearly sorting out the Greek crisis has shaken a lot of other skeletons out of the Eurocloset, and not only the debt-ridden PIGS. No, there is the matter of European unity and the missing leadership which threaten the Euro's very being. Dollar has further to rise.

But notice that the dollar's ascent has not been able to break the back of gold's rally. One suspects that some of that panicky money fleeth into gold rather than dollars. Expected is that the second day of a rout would be as bad as the first, but no, today's trading only forced the GOLD PRICE back to a low of $1,157.50, that is, below the critical $1,160 breakout point. That was a very fast, sharp V-move that immediately jumped back to $1,176.40 (the high) and closed on Comex up $6 at $1,174.60, only $8 below Monday's high.

The SILVER PRICE lost another 30.7c to close at $17.511, a cosmetically please close above $17.50 support. Today's low today fell at $17.04, so viewed from the standpoint of its recovery from that attack -- up 47c -- silver fared not so ill.

For now I must assume that we are seeing the gold price slapped by a financial crisis favouring the dollar but not broken, the silver price suffering as usual more than gold but also not broken, and stocks broken.

STOCKS kept on falling today. Dow lost another 58.65 points to close at 10,868.12, right at the bottom of the megaphone and near the 50 day moving average (now 10,832.88). S&P lost even more, down 7.73 to 1,165.87. Be warned that stocks are rattlesnake crazy here. They may continue cascading, or suddenly rally for a final "good-bye kiss" to higher prices. Either way, the trend now has turned down, the top is in, and lower prices will soon come.


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Tuesday, May 04, 2010

Do I Hear the Death Knell Tolling for Silver and Gold Prices?

Gold Price Close Today : 1168.60
Change: -14.10 or -1.2%

Silver Price Close Today : 17.818
Change 99.5 cents or -5.3%

Platinum Price Close Today: 1678.60
Change: -46.80 or -2.7%

Palladium Price Close Today: 546.70
Change: 0 or 0.0%

Gold Silver Ratio Today: 65.59
Change: 2.719 or 4.3%

Dow Industrial: 10,927.77
Change: -225.06 or -2.0%

US Dollar Index: 83.30
Change: 1.03 or 1.2%

I neglected to tell y'all yesterday that some sections of Nashville received 16 inches of rain in 36 hours, one-third of a year's rain in one and a half days.


TODAY the US DOLLAR INDEX exploded upward 102.7 basis points to 82.399, smashing 82.60 resistance. First target is 86.87.

Do I hear the death knell tolling for silver and gold? Hardly, but that's what all the blow-hard gurus and media experts will be blathering. When they do, remember they're the same ones who have been telling you to buy stocks, which fell 2.2% today versus gold's 1.2% drop.

What drove the dollar up? Maybe the specter of centrifugal force shattering the Euro precipitated a run into dollars. It crossed above 82.6 and climbed evenly the rest of the day, pausing only at 83.20. Doesn't look like a panic move.

The DOW fell 225.6 to 10,926.77, losing 2.2%. S&P500 lost 2.4%, down 28.66 to 1,173.60. Low was an ominous 10,869.25. Dow cut clean through its 20 day moving average (11,065.15) & kept on falling. Shaky support trembles at 10,800, more manly support awaits at 10,730, then real support at 10,500.

This is a "broadening top" (megaphone), so even from this low stocks might suddenly oscillate back to the top of the range. Today's low at 10,9869 lay about the bottom of the megaphone's mouth, so a close lower than that tomorrow would bind the fate of stocks to gravity for some time.

As I have said before, and will continue to say as long as the chart sings such a plain song, get out of stocks. They are in a primary down trend (bear market) that will last at least another 5 years. Coming soon, to this location, Lower prices!

I reckon the silver and gold debacle today annihilates my Three Criteria For Ease of Mind -- or does it? Predictably always-more-volatile silver took the brunt of the higher dollar blow, losing a gargantuan 99.5c to close on Comex at 17.818. That didn't stick, as silver is now trading at 17.89.

How much damage was done? Silver closed below its uptrend line stretching back to February and below its 20 DMA (18.12). However, a little peek for slumming below the uptrend line is standard behavior for silver, so maybe it means nothing and will not follow through. Solidest support stands around 17.50. Overhead silver must climb above 18.10 to re-enter the uptrend channel.

'Twas arresting, how much deeper wound silver took. Gold's was a mere scratch. On Comex gold closed at $1,168.60, down $14.10 and cosmetically below $1,170. Odd, all day I never saw it trade below $1,170. Now gold is trading at $1,172. Today did no damage at all to the uptrend, nor did it near the 20 DMA ($1,155.17 today). No, gold remains in its uptrend, and y'all have been given the opportunity to buy silver on sale. Odd -- all of gold's fall occurred between 9:00 and 11:00. Hmmmm.

One casualty of Gold's drop has been the low premium on Krugerrands. Somebody big has thrown an order on the market for the usually-low-premium Krugerrands, and it must be a sizable because the premium has jumped over 1% (about $12) and some wholesalers are refusing to sell Krugerrands, anticipating a short squeeze.

Today's bottom line: Dollar index broke out upside and should carry to 86 or higher, troublesome but not nearly fatal to silver and gold; stocks likely broke the back of a year long uptrend and began a long fall; gold remains in an uptrend & silver will have to lick her wounds a few days but most probably remains in an uptrend, too.

On this day in 1626 Peter Minuit, a Dutch colonist, arrived at Manhattan Island with 4 boats of settlers and 300 cattle. From the Indians for 60 guilders worth of cloth, beads, and brass buttons he bought the island. Generally this is thought to be a classic example of an totally bone-headed trade, but think about it. A gulden or florin was a ducat, 0.1106 troy ounce of gold, so 60 gulden was 6.636 ounces of gold. It was probably a pretty big pile of cloth & beads. More than that, the Indians must have thought, "These Dutch have no real estate savvy at all! They're willing to pay all this stuff for this little island and the hunting here isn't even worth canoeing over from the mainland. Let's take these suckers before they change their minds."


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Monday, May 03, 2010

We are on the Way to Much Higher Silver and Gold Prices - Wait No Longer

Gold Price Close Today : 1182.70
Change: 2.60 or 0.2%

Silver Price Close Today : 18.813
Change 20.2 cents or 1.1%

Platinum Price Close Today: 1725.40
Change: -14.00 or -0.8%

Palladium Price Close Today: 546.70
Change: -4.85 or -0.9%

Gold Silver Ratio Today: 62.87
Change: -0.543 or -0.9%

Dow Industrial: 11,151.83
Change: 143.22 or 1.3%

US Dollar Index: 82.37
Change: 0.56 or 0.7%

Surprise. Surprise. Surprise. It's Monday and the stock market rose. The Nice Government Men are becoming terribly sloppy, following the same pattern week after week. Ponder -- Denket mal -- The Dow lost 158 points Friday and gained 143.22 today to close at 11,151.83. This is not progress, 'tis merely burning up buying power. If your car was stuck in the mud and you gunned it and the speedometer showed 50 mph while you were standing still, would you count that progress? The stock market's pattern is a broadening top, and soon it will cross the fateful trigger around 10,950 when the nice government men are not watching or are too overpowered to stop it. Then,
then, 'twill begin its cascade. Stay out of stocks. S&P500 closed at 1,202.26, up 15.57.

Get ready for yet another tergiversation. The US DOLLAR INDEX refused to follow through downside in spite of all the opportunity given it by Friday's below-82 close. Today it shot up 56 basis points to 82.366. The chart shows a regular stair step pattern that usually reflects strength. Ahh, but in the world of government and central bank manipulation, which is real and which is Memorex? Only the manipulators know for sure. Just reading the chart as it stands & casting aside my suspicions, I'd say it may drop to 81.50 before advancing above 82.70 (the last intraday high), but in any event should head higher. And tomorrow I may tergiversate another 180 degrees.

As unseen friends seemed to intervene beneath the counter in favour of stocks and the dollar today, so unseen hostiles were sniping at GOLD. By 10 a.m. today gold had scaled the heights of $1,187.60 the Whoosh! A surge of selling sent gold waterfalling to $1,180, then just as quickly buying geysered it back to $1,186. The rest of the day gold spent easing off sideways, and close up only $2.60 at $1,182.70. Not it's trading at $1,184. The gold price will move higher.

The SILVER PRICE today gained 20.2c to close at 1881.3c, fulfilling the second of my Three Criteria for Ease of Mind: gold over $1,170, silver over 18.80, and the gold/silver ratio below 62:1. Today the ratio dropped 63 to close at 62.822.

We are on the way to much higher silver & gold prices. Wait no longer.

Thank you for your expressions of concern, but the floods did not come nigh us. We all live on ridge-tops, although several roads were washed out. North of us in Nashville the flooding was terrible, but we were spared.



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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.