Tuesday, June 21, 2011

Nothing Yet Convinces me that Silver and Gold Prices have Bottomed

Gold Price Close Today : 1546.00
Change : 4.50 or 0.3%

Silver Price Close Today : 36.373
Change : 0.308 or 0.9%

Gold Silver Ratio Today : 42.50
Change : -0.238 or -0.6%

Silver Gold Ratio Today : 0.02353
Change : 0.000131 or 0.6%

Platinum Price Close Today : 1747.10
Change : 16.60 or 1.0%

Palladium Price Close Today : 766.75
Change : 19.20 or 2.6%

S&P 500 : 1,295.52
Change : 17.16 or 1.3%

Dow In GOLD$ : $162.99
Change : $ 1.01 or 0.6%

Dow in GOLD oz : 7.885
Change : 0.049 or 0.6%

Dow in SILVER oz : 335.14
Change : 0.18 or 0.1%

Dow Industrial : 12,190.01
Change : 109.83 or 0.9%

US Dollar Index : 74.70
Change : -0.328 or -0.4%

The GOLD PRICE continues advancing today, up $4.50 at Comex close to $1,456.00. Why is my enthusiasm not engaged? Trading seems lackluster to me, not much back and forth, and a slow aftermarket. Maybe I'm suffering midsummer lethargy?

Beneath gold now stands $1,535 support and the 20 DMA at $1,534.28. It has reached the last high close, so "Fish or cut bait" time has arrived. If gold does pierce $1,547LinkLink then it will run to the all-time high close at $1,563 (Intraday at $1,575). Then we must ask whether it is double topping or continuing a rally.

The silver price, too, keeps steadily creeping up. Today it gained 30.8c on Comex and ended at 3737.3c, above that thorny hedge at 3600c. It's close to closing through the 20 DMA (3660c), but momentum indicators speak with forked tongue, letting go no secrets.

I reckon I might be missing something, but nothing yet convinces me that silver and gold prices have bottomed, although I expect to see slightly higher prices tomorrow.

As I expected, once stocks penetrated 12,100 they jumped. Dow today closed up 109.83 at 12,190.01, up 0.9%. S&P rose 1.34%, 17.16 points to 1,295.52. Let's ponder this in alternative currencies, in US dollars and in gold.

In US dollars the Dow jumped through the 20 day moving average (12,165) crossing the first tripwire of an advance. First barrier arises at 12,300. Momentum indicators -- RSI and MACD -- loudly whisper stocks will climb more, and will have to cross that 12,300 bridge when they come to it.

In gold terms the dow rose slightly today, but not enough to pierce its 20 DMA (7.93). Closed 7.88 oz., looks lazy.

Logically, I have no dog in this fight. Not that I don't own stocks, but I don't even go to dog fights. Stocks only make sense when an economy makes sense, and the US economy, where folks draw over 50% of income from government, is not a sensible or sustainable economy. I'd about as soon invest in a stable country like Liberia or Sudan. Makes as much sense.

Read an article today that explained WHICH big financial institution victimized the Greek government. Y'all will never guess who -- Hey, how'd y'all know it was Goldman Sachs?

Makes it all the more likely that we are now watching the final asset stripping which is the ultimate payoff of the game. Time the jackal banks have finished stripping the corpse everything public in Greece will be owned by somebody foreign.

Think of two people who can't swim treading water out in the middle of the lake, both clinging and climbing on each other trying to save himself. That's stocks and the US Dollar.

Today stocks rose on the back of a falling dollar. Dollar relinquished 32.8 basis points to close at 74.701. Dollar remains in an uptrend, in spite of this, but the vigor may be aging rapidly. NGM are sweating bullets and bolts trying to hold the buck down and float the euro, I doubt not. Euro jumped up to its 50 DMA today (1.4416) but closed at 1.4411, up 0.71%. You buy it -- I wouldn't. Nice Japanese Government Men have the yen well in hand, tucked in bed under 125c/Y100 (Y80.22/$).

Sorry, I won't be sending a daily commentary because I will be finishing my monthly Moneychanger newsletter for paid subscribers. God willing, I'll be back on Thursday to needle y'all some more.

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.