Wednesday, May 18, 2011

Gold Price hasn't Posted its Bottom Yet

Gold Price Close Today : 1495.60
Change : 15.80 or 1.1%

Silver Price Close Today : 35.094
Change : 1.606 or 4.8%

Gold Silver Ratio Today : 42.62
Change : -1.572 or -3.6%

Silver Gold Ratio Today : 0.02346
Change : 0.000835 or 3.7%

Platinum Price Close Today : 1767.50
Change : 2.70 or 0.2%

Palladium Price Close Today : 736.00
Change : 15.55 or 2.2%

S&P 500 : 1,340.68
Change : 11.70 or 0.9%

Dow In GOLD$ : $173.60
Change : $ (0.71) or -0.4%

Dow in GOLD oz : 8.398
Change : -0.034 or -0.4%

Dow in SILVER oz : 357.90
Change : -14.76 or -4.0%

Dow Industrial : 12,560.18
Change : 80.60 or 0.6%

US Dollar Index : 75.43
Change : 0.026 or 0.0%

Editors Note: We apologies for the errors in the gold price data in Franklin Sanders commentary today which was caused by a software glitch when we format his commentary and through no fault of Franklin Sanders. We have now resolved this glitch and it wont happen again.

Well, Candide, it was the best of all possible worlds today. Everything went up.

Dollar index was knocked off its 75.40 limb, fell as 75.13, but clawed its tomcat way clean up to 75.425, a gigantical 2.6 basis points above yesterady. That may end the dollar's woes for a few days. However, should the dollaar fall below todays 75.13 low, it will disappoint its fans and sink like your car keys out of your shirt pocket when you lean over the gunwale of the bassboat.

Even the Franken-currency, the euro, climbed today, to 1.4238, up 0.01%, barely visible. Yen, on the other hand, fell another 0.33% to Y81.69/$ (122.41c/Y100).

The Dow reversed today and climbed steadily 80.60 points to 12,560.18. Resisance reaches from 12,550 clean to 12,650. Maybe this begins the last push up. S&P500 joined the fun, adding 11.7 to close at 1,340.68.

As the old saying goes, lean on that weak reed and it will pierce your hand. Stay away from stocks. They are the poison oak in the Nursery of Investment Plants.

By the way, the Dow in Gold Dollars, which measures stocks by gold, remains below its 200 day moving average (DMA), therefore trending lower.

SILVER and GOLD came out shaking their heads and lusting for revenge. They got it.

Gold's low yesterday became the springboard for a rally today. From yesteray noon gold steadily gained, reacyhing the disputed $1,490 level. Today it went battering against he gate at $1,500, but without breaking it down. After a sudden rise -- what do you call that? Escalation? More like levitation -- aboiut 9:45, gold soared clean to $1,500, tried thrice to pierce it and failed, then fell off. Comex close found gold up $1,5.80 at $1,495.60.

Five day chart is in rallying mode, but blocking the path stands $1,500. Above that is $1,505. More broadly, none of this back and forth gains any credit until gold betters $1,525. Yes, it's exciting, but essentially merely burns up ammunition. Can't know it was valuable until it tops one of those big numbers. Today's chart whispers that $1,515 is possible in the next two days. Still I suspect, fun as all this may be, that gold hasn't posted is bottom yet.

From its 3300c low about noon yesterday silver went sild today. From a 3411c low it reached 3524c today, and closed near that at 3509.40 on Comex, up a glorious 160.6c, an eyegoggling 4.8%!

Aftermarket has remained high at 3613c.

SILVER took its vengeance on the shorts today, and could punish them all the way up to 3800c and the 20 DMA, or 3900c and the 50 DMA. Yet one feareth that the ultimate low has not yet had time to appear. Today's rally might also vanish like mist tomorrow, since the momentum indicators have not turned up to confirm a rally.

If y'all have read my website,, you know that I am death on paying premium on any silver and gold. Still people call wanting to buy silver American Eagles or Canadian Maple Leaves or silver rounds, when they could buy the more useful and divisible US 90% silver coin for less than 2% over its silver content. Yet they will push right past that to pay $4 an ounce or more for silver American Eagles. Listen, read, mark, learn and inwardly digest this principle: OVER TIME, PREMIUM ALWAYS DISAPPEARS. You will NOT recapture those premium dollars when you sell at the peak, I don't care what any dealer trying to sell out of his inventory tells you. I've been doing this 31 years this year, and I have watched: Over time, premium always disappears, so don't buy premium. Get the most silver and gold you can get for your money.

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.