Wednesday, June 15, 2011

Can the Gold Price Pierce that 1535 Level is the Crucial Question

Gold Price Close Today : 1525.60
Change : 1.80 or 0.1%

Silver Price Close Today : 35.406
Change : (0.004) or 0.0%

Gold Silver Ratio Today : 43.09
Change : 0.056 or 0.1%

Silver Gold Ratio Today : 0.02321
Change : -0.000030 or -0.1%

Platinum Price Close Today : 1774.90
Change : -22.10 or -1.2%

Palladium Price Close Today : 776.95
Change : -19.55 or -2.5%

S&P 500 : 1,265.00
Change : -22.87 or -1.8%

Dow In GOLD$ : $161.21
Change : $ (2.60) or -1.6%

Dow in GOLD oz : 7.798
Change : -0.126 or -1.6%

Dow in SILVER oz : 336.02
Change : -5.01 or -1.5%

Dow Industrial : 11,897.27
Change : -178.84 or -1.5%

US Dollar Index : 75.55
Change : 1.056 or 1.4%

Editors Note: A fierce thunderstorm blew in and suffocated Franklin Sanders satellite internet so we were not able to get this commentary out to you yesterday.

Yesterday stocks presented us with a riddle that today they answered. They were either reaching up for a "final kiss good-bye" to the level where they broke down, or reversing upward. Today, by breaking so much below their previous low close, they showed they are ready to drop more, not rally. Dow closed today at 11,897.27, down a massive 178.84, down 50 more points than it rose yesterday. S&P 500 dropped 22.85 to 1,265.

Back in February the Dow caught and held at 11,983.17. Today it's 14 points above that. A slip tomorrow will give the Dow a 400 point haircut.

On fears Greece will default -- and if enough rioters take to the street, that will hurry the process -- the euro tanked and the US dollar index gained a meaty 111 basis points or 2.4%!

GOLD and SILVER rose more in the aftermarket than during the US trading day. Silver actually closed down 4/10 of a cent to 3540.6c while gold rose to close Comex $1.80 higher at $1,525.60.

But in the aftermarket the gold price is trading at $1,531 and silver at 3587c. If gold were being driven only by fear of euro troubles, silver would not have rallied with it. In any event, the gold price is leading both right now, and gold is rising. Whether it can pierce that $1,535 level poses another and more crucial question.

Of course, the way to solve all these so-called financial crises, which are really solvency crises for the banks who loaned the money by creating it out of thin air, is to let the over-indebted countries, including the USA, default and let the banks go bust. Doesn't anybody realize that the banks are causing the problem, then making it worse with bailouts. Here's a guess, just a guess: if all the mega banks in the world shut down tomorrow, we'd have an uneasy six months adjusting, but their removal would begin a reign of prosperity not witnessed for 50 years.

Well, we'd have to get rid of the central banks, too, really, to keep the problem from recurring. And we'd have to boot government out of the cockpit of the economy. If we did that, why, every starveling in the US would be eating bacon three times a day.

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.