Monday, March 14, 2011

The Gold Price Must Hold On Above $1,420 and Better $1,436 Or It Will Turn Down

Gold Price Close Today : 1424.60
Change : 3.10 or 0.2%

Silver Price Close Today : 35.825
Change : 10.5 cents or -0.3%

Gold Silver Ratio Today : 39.77
Change : 0.202 or 0.5%

Silver Gold Ratio Today : 0.02515
Change : -0.000129 or -0.5%

Platinum Price Close Today : 1753.50
Change : -27.50 or -1.5%

Palladium Price Close Today : 747.50
Change : -15.00 or -2.0%

S&P 500 : 1,296.39
Change : -4.66 or -0.4%

Dow In GOLD$ : $174.03
Change : $ (1.11) or -0.6%

Dow in GOLD oz : 8.419
Change : -0.054 or -0.6%

Dow in SILVER oz : 334.77
Change : -1.42 or -0.4%

Dow Industrial : 11,993.16
Change : -51.20 or -0.4%

US Dollar Index : 76.35
Change : -0.207 or -0.3%

The GOLD PRICE and SILVER PRICE spake today with forked tongue. Gold rose $3.10 on Comex to $1,424.60, silver fell 10.5c to 3582.5c. All this equivocates like a Republican congressman in a Democratic district, or an NPR executive caught on video tape. Gold closed higher, yes, but not boldly, and not above the morale-building $1,425, despite a high at $1,430. Today's trading was merely sideways travel between $1,420 and $1,430. No doubt the earthquake is sending some folks running to gold.

Same folks are running out of silver, most likely. Think about it: when risk appetite is rising, people buy stocks and silver. When risk appetite is falling, people buy gold and .45s. One (namely, me) is deeply tempted to guess that flight-to-safety buying is holding gold up but not bleeding over to silver.

Truth to tell, silver's chart differeth not largely from gold's. Today was a sidewise, tightening band between 3627c and 3557.6c. This has not violated any uptrend, but feels weak.

Clearly, fear-filled gravity is operating on all markets. To remain trending upward, the SILVER PRICE must NOT close below 3550c and must exceed 3650c. The GOLD PRICE must hold on above $1,420 and better $1,436 or turn down.

I lean toward lower silver and gold, but am flinched for the possibility they might yet add another upleg.

Lawzy-mercy! As I used to hear my country aunts say in astonishment, markets are barking and yowling. 'Tain't nice.

Look at the US dollar index. Were we to take it in isolation and with a gullible want of suspicion, we would conclude it had lunged toward the upside, failed, and followed through downside. Today it fell through the 76.50 base from which it had last leapt up, down 20.7 basis points to 76.347.

Yet, dwelleth the dollar in a vacuum? Hardly. We know the Central Bank heads and financial "ministers" (think "Elmer Gantry") meet once a month for supper at the Bank for International Settlements in Basel. Do you really think they talk about the rubber Chicken Divan, or do they put their heads together to manipulate their joint currency exchange rates? If you picked "talk about the rubber Chicken Divan," go to the back of the class. Your bulb has burned out its filament.

So when the world's 3rd largest economy suffers a terrible earthquake that threatens to annihilate both its currency and its stock market, do you reckon it occurred to anyone in Tokyo to call anybody in Washington and Frankfurt about jimmying exchange rates until the crisis blows over?

Thus it behooves us to parse the euro and yen charts together with the dollar. We see that the earthquake seems to have reversed the euro off its 20 DMA, and today it gapped up. Bad headache for the Nice Government Men around the world straining every nerve to keep the world safe for paper money.

Oddly enough, last Thursday the yen GAPPED UP out of a down trend to the top of its recent range, not that you or I would be buying yen in the face of that earthquake, but somebody was buying 'em like a meth-head buying Sudafed.

And how, pray, was the yen to rise but by sacrificing the dollar? What's a little exchange rate adjustment among crooked central bankers?

When you glance at the Tokyo Nikkei stock average, you understand why the NGM are manipulating 24 hours a day. In the last four days it has dropped from 10,600 to 9,620 today, crashing from its 20 DMA through the 50 and down through the 200 DMA.

Today the Dow just fell out of bed and smashed at its lowest clean through 11,900 to 11,897.31. But Lo and Behold! about 12:30 Santa Claus, the Easter Bunny, the Tooth Fairy, Elves, Trolls, Bigfoot and the Yeti all started buying stocks off 11,900, and the recovery reached 11,993.16 by closing time, down only 51.24. (S&P500 closed 1,296.39, down 4.66)

Dear Readers, this is the Big One, the down leg that will with vicious, brutal speed eat up months and months of gains.

Yet more pain aboundeth in diverse markets. If that ain't a head and shoulders in Platinum that broke down today, then it surely is a Kopf und Schulter. Break of $1,760 neckline projects a fall as low as $1,620. Palladium isn't much better, and appears to have rolled over. Close below 750 takes it to 650. Explain to me, if you please, how this can be positive for silver and gold?

On this day in 1900 the banks finally won when the US congress passed the hilariously mis-named "Gold Standard Act." It didn't set any standard, and couldn't make gold the standard anyway, since the dollar of silver (371.25 grains) had already been made the standard in 1792. However, it was a needful step in shoving both silver and gold out of the system altogether, and replacing them with created-out-of-thin-air bank credit.

Lest you think I am cynically reducing everything to mere economic events, I urge you to consider the human side of the Japanese earthquake. It now appears that 10,000 or more may have lost their lives to the tsunami. I don't know what else you might do, but you can certainly pray for the survivors and rescue workers.

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.