Tuesday, April 12, 2011

Gold and Silver Prices Had a Rough Day

Gold Price Close Today : 1467.40
Change : (6.00) or -0.4%

Silver Price Close Today : 40.604
Change : 0.004 cents or 0.0%

Gold Silver Ratio Today : 36.14
Change : -0.151 or -0.4%

Silver Gold Ratio Today : 0.02767
Change : 0.000115 or 0.4%

Platinum Price Close Today : 1781.50
Change : -29.40 or -1.6%

Palladium Price Close Today : 773.75
Change : -22.50 or -2.8%

S&P 500 : 1,324.46
Change : -3.71 or -0.3%

Dow In GOLD$ : $174.42
Change : $ 0.74 or 0.4%

Dow in GOLD oz : 8.437
Change : 0.036 or 0.4%

Dow in SILVER oz : 304.92
Change : 0.03 or 0.0%

Dow Industrial : 12,381.11
Change : 1.06 or 0.0%

US Dollar Index : 75.056
Change : 0.187 or 0.2%

I'm late because at the end of the day the Spirit of Trading moved on the minds of multitudes to call all at once. This fell amidst a magnificent rain storm with raging vertical lightning. Beautiful to watch, but the cloud cover baffles my satellite internet, so I had to rush home where I have cable internet. About that time my wife Susan rings up wanting 5 lb. of frozen hamburger out of the refrigerator in the barn across the road. Greater love hath no man for his wife than he will walk bareheaded thru a drizzling rain for frozen hamburger. But it was truly exhilarating, a cold spring rain filled with singing birds, and the whole world smelled clean. That's quite a trick with a barn, even for Spring.

The US DOLLAR INDEX continues in its coma: high of 75.08, low 74.90, no progress, no movement, up a chiselling 18.7 basis points. Clearly 75.10 has become the challenge for the dollar to overcome, but I wouldn't run out and lay a lot of money on the dollar breaching that right away. If the dollar foots around with 74.80 it will certainly hit 74.23, and maybe the low 70s. Euro fiddled today, closing 1.4436, down 0.32%. Yen closed 84.42Y/$ (118.46c/100 yen).

STOCKS again tried to rally but failed. 12,450 has trapped the Dow, which has thrice tried to pierce that barrier. Now maybe that's a sign of strength, but up 1.06 points seemeth not strong to me. S&P fell 3.71 to 1324.46. Dow closed 12,381.11.

Stocks: y'all just hang on to them. Sooner or later they'll pry you away from all your capital.

GOLD and SILVER had a rough day. Now before I say anything, I tell y'all I don’t want a lot of steaming emails about my about-face, because I'm not making one. I've been telling y'all that this wild ride could end at any time, and one day it will. Today might have been that day, but only half the testimony has been taken.

The GOLD PRICE touched its high at $1,475.65 today. After the New York open it climbed off $1,465 over $1,470, but very shortly. It then bumped along from 10:00 to 2:30 between $1,465 and $1,470. Comex closed down $6.00 at $1,467.40. Here in the late (7:40 CDT) aftermarket gold has traded as low as $1,456.65.

The five day chart draws plain lines in the sand. Gold needs to cling to $1,455, but gold could tumble clean to $1,430 without falling out of its upward channel.

But a bigger question looms: was today the first half of a dreaded key reversal? Gold barely broke into new high territory with a lower close for the day. A lower close tomorrow would put the second and final piece of the key reversal in place. There's no way to know until we see how the market plays out tomorrow. Clearly a push above $1,470 gainsays all this key reversal worry, or any close higher than today's.

If life were easy everybody would do it. The SILVER PRICE did not make anything easy for us today.

It reached a new intraday high at 4195c (!), but on Comex closed at 4060.4, up a razor-thin 4/10c. What is that?

The daily chart tells an even raggeder tale. That new high came about 1:00 a.m. NY time, and although it traded on the plateau of 4100c from 6:00 a.m. to 12:00 p.m. the day decidedly plunged. Ahh, break to new high ground, but no lower close -- or can you call a 4/10c rise "higher". Is that legit? Sensible?

An hour after Comex shut the doors silver plunged to 3972c, then jumped back above 4000c.

Now all this might say -- along with the seasonal expectation -- that silver has topped. But it could just as clearly (and probably does) say that silver had a great run last week and needs a breather this week.

How do we tell the difference? It would be good if silver held the line above 3950, but 3800c would do.

You might complain that I'm talking out of both sides of my mouth, but that's how I keep from biting my tongue. A little correction has arrived. As long as gold doesn't fall below $1,430 nor silver below 3800c, it will be brief.

By the way, the gold/silver ratio made yet another new low today at 36.139.

I have one leetle chicken bone in my craw I have to cough out, and that's the reason why these internet silver puffers bother me like bull chiggers. They froth and fume about how silver is going to the moon, and their chatter pulls in a lot of ignorant people who just see the shooting star and understand nothing of what set it on that trajectory. So they buy, then they don't get rich overnight, silver corrects, and they all panic. They have been shorn, just like sheep, thanks to the puffery. Worse, they don't understand silver's volatility, so they'll probably sell at the bottom of a correction, just in time to see it launch into orbit again.

Fear and greed don't strike me as very flattering or profitable guides for investing.

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

- Franklin Sanders, The Moneychanger

© 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.