Thursday, February 24, 2011

The Gold Price Was Punched to the Ropes Today After the Comex Close

Gold Price Close Today : 1413.40
Change : 12.90 or 0.9%

Silver Price Close Today : 33.166
Change : (0.132) cents or -0.4%

Gold Silver Ratio Today : 42.62
Change : 0.556 or 1.3%

Silver Gold Ratio Today : 0.02347
Change : -0.000310 or -1.3%

Platinum Price Close Today : 1776.00
Change : -7.40 or -0.4%

Palladium Price Close Today : 773.80
Change : -3.90 or -0.5%

S&P 500 : 1,306.10
Change : -1.30 or -0.1%

Dow In GOLD$ : $176.51
Change : $ (2.16) or -1.2%

Dow in GOLD oz : 8.539
Change : -0.104 or -1.2%

Dow in SILVER oz : 363.88
Change : -1.11 or -0.3%

Dow Industrial : 12,068.50
Change : -37.28 or -0.3%

US Dollar Index : 77.09
Change : -0.317 or -0.4%

The GOLD PRICE and the SILVER PRICE were punched to the ropes and hit the mat after the Comex close. Stock continue to slide, as does the dollar. Oil -- light crude -- hit $100 bucks yesterday and fell to 93 today. Platinum and palladium are also ailing.

Gentle readers, it is not a "good day" in any market when it closes up at a new high then falls out of bed (top bunk of the bed, at that) in the aftermarket. So gold today, and silver.

Nervous, nervous -- Gold traded almost all day above 1410, and closed Comex (1:30 Eastern time) at $1,415.30, up $1.90. Rumors about Libya flew and suddenly the bottom dropped out, as low as $1,394.30. When I checked last the GOLD PRICE was trading at $1,396, down $19.30 from Comex.

Which way do these forks in the road take us? First fork takes us to gold making a shallow correction, say to $1,380, then resuming its rally. T'other fork runs to a longer correction after failing today at the old high ($1,422.60, but today came close enough). Clearly the turmoil in the Middle East is influencing the market, both ways. That ain't much to build a rally on.

On a five day chart gold plunged through its uptrend line, breaking down badly. On a longer chart today's break did not hit the trend line, but all isn't well. A little gap up on Tuesday makes the chart look like an island reversal (a gap up, several days trading sideways, then a gap down leaving an island behind). If gold gaps down tomorrow, you have to call it an island reversal.

The SILVER PRICE chart looks much like gold, smashing down through the five day trend line, a clear breakdown. Now the number for silver to defend becomes 3150c - 3100c.

After closing down 13.2c at 3316.6c on Comex, silver dropped to a low of 3172.2 cents, 144c off its Comex close. On a longer chart silver dropped clean to its uptrend line. Support awaits at 3100c, then 2832c.

Now I never say "I told you so" because I think that is the height (the lowth?) of bad manners, but I do recall somebody yesterday musing that when the party gets so wild that people start throwing bottles and fighting and screaming, it may not be long before the cops pull up.

From a Comex close of 42.673 the GOLD/SILVER RATIO jumped in the aftermarket to 43.7! If you were EVER planning to swap silver for gold, you'd better do it Johnny-quick-smart.

I'd stand back from silver and gold to give them a couple of days to settle. As I said, this might be shallow and temporary, or it might entail more pain, even surgery.

Epicenter of all these tergiversations appears to be the risible dictator of Libya, the fellow who wears the baker's cap. Yesterday the rumor flew that he was in trouble, might flee, and in the melee Libya's oil production (12th largest world producer, largest in Africa) might fall. Oil rose to 100. Today, he shot a couple of hundred more protesters, discouraging democracy, and the rumor flew he was NOT leaving. Oil tanked, taking silver and gold with it.

Meanwhile that old derelict, the US DOLLAR, just keeps on rolling downhill. Having throw down its chance to rally with contempt, it reached 77 today, on its way to 76.90 and lower. The scrofulous euro, for reasons that will never be derived from facts or reality, has rallied to its last low. What happens now? Dollar and euro swap directions?

Y'all don't know what an effort I have to make to keep from waxing bitter over these scabrous, scrofulous fiat currencies. They are the vampire fixed on the carotid artery of the whole world, roaches feeding on the world's pantry, damp, mangey rats ferrying their economic plague from one country to another. And the bristly swine that run them, the much bepraised central bank heads and experts? Yellow egg-sucking dogs, not worth the powder to blow them to a higher state of existence.

Whoa. Get a grip. Let it roll, their day will not last long. One (that would be ME) prays and hopes to see the end of their rule with one's own eyes, and not too far from now.

Before I forget about it, I want to tell y'all about my friend Jim Smith's Back to The Land Store. Visit him at He sells anything you'd need for a mule, a garden, or a milch cow. Need open-pollinated non-GMO seeds? Jim's the go-to man. And, alone, I believe, in the western world, he has garden tools that won't break the first time you use them. Visit them on the internet or call 866-764-0034. Jim is in Erin, just two hours up the road from us.

STOCKS today slid again. Dow gave up another 37.28 points to close at 12,068.50. It barely managed to stay above the psychologically critical 12,000 round number, and hit a low at 11,983.17. Mercy! I would love to have been a fly on the wall in the Nice Government Men's command center when the Dow pierced 12,000. Coffee cups and donuts went a-flying every which way as they leapt to their computers to slam in those orders and get that index up. Shame their naps were disturbed.

S&P500 dropped as low as 1,294.26, but ended down only 1.3 points at 1,306.10.

On a five day chart the Dow is impulsing downward. Today probably marked the end of the first leg, so tomorrow (helped by the end of the week) stocks might climb as high as 12,152. That will give out and they'll fall again, gaining speed as they plunge each successive level of support technical and psychological. If y'all are watching, I'd bring gauze and plenty of adhesive tape, cause it's likely to get bloody.

More proof stocks have turned: the Dow in Gold Dollars now stands at G$176.51 (8.538 oz), having rolled over at G$188 and crashed through G$180 on the way to tunnel beneath its 200 DMA once again.

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

- Franklin Sanders, The Moneychanger
Phone: (888) 218-9226 or (931) 766-6066

© 2011, 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.