Tuesday, June 28, 2011

Silver and Gold Prices Have Merely Stalled in their Descent

Gold Price Close Today : 1499.70
Change : 3.70 or 0.2%

Silver Price Close Today : 33.638
Change : 0.053 or 0.2%

Gold Silver Ratio Today : 44.58
Change : 0.040 or 0.1%

Silver Gold Ratio Today : 0.02243
Change : -0.000020 or -0.1%

Platinum Price Close Today : 1696.10
Change : 18.30 or 1.1%

Palladium Price Close Today : 740.95
Change : 11.95 or 1.6%

S&P 500 : 1,296.67
Change : 16.57 or 1.3%

Dow In GOLD$ : $168.01
Change : $ 1.61 or 1.0%

Dow in GOLD oz : 8.127
Change : 0.078 or 1.0%

Dow in SILVER oz : 362.35
Change : 3.75 or 1.0%Dow Industrial : 12,188.69
Change : 145.13 or 1.2%

US Dollar Index : 75.04
Change : -35.300 or -32.0%

Y'all can say that today was a good day for metals because the SILVER PRICE, GOLD PRICE, PLATINUM PRICE, and PALLADIUM PRICE all rose, but pardon me if I partake not of your jubilation. Gold closed Comex up $3.70 at a psychologically weak, morale-thumping $1,499.70. Not quite $1,500, is it? Why couldn't it jump that last 30 cents?

The SILVER PRICE added 5.3c (5.3/100th of a dollar) to close at 3363.8c. Don't sing to me about a 5.3 cent rise -- y'all wouldn't even bend over to pick a nickel up off the sidewalk.

Today's rises look like tiny reaction bounces after a great fall, the infamous "dead cat bounce."

I am the first to deny I hold the gift of prophecy or clairvoyance, but silver and gold have merely stalled in their descent at points where they paused earlier. The fall so far does not sufficiently wipe away the overbought condition from the end-April peaks.

More, the d rose a little more today, to 44.584. Making new highs for the move. One more day's loss like yesterday's (105.3c) would carry silver to its 200 day moving average, now 3150c.

I have to think both will move lower, but I want y'all standing by, coiled tight and loaded for bear, lots of gunpowder and nails, ready to buy silver (and gold) with all you've got. Shortly, shortly, watch carefully.

Today's stock market drama took stocks through resistance from Dow 12,000 to 12,100 to bump up against the 12,200 ceiling. Resistance in this area stretches back to March. By the way, the Dow rose a meaty 145.13 points (1.21%) to 12,188.69. S&P 500 added 16.75 (1.29%) and ended at 1,296.67.

Momentum indicators are favoring higher prices for stocks, so where does that leave us? Assuming stocks penetrate 12,200, preferably tomorrow, there's a chance they could rally clean to the last (May) high at 12,876. That will close the whole drama in one last grand theatrical fling, for further ruin surely lies ahead of stocks.

You're only a natural born fool from Tennessee, Moneychanger! How can you be so sure you're right about stocks?

Because it's not me that sure, but the primary trend. Stocks topped in January 2000, and haven't exceeded that 11,722 level -- adjusted for inflation -- and won't until their bear market ends, sometime around 2015 or 2020. Your eye can't trace that out when you price stocks in ever-shrinking dollars, but it's plain as the milk moustache on your face when you price stocks in gold or silver. Fight the bear market if you will, but it will rip you apart in the meantime.

A friend today told me his father was drawing all his money out of stocks because he was disgusted with the market and couldn't make any money. Now a stock market is supposed to function as a market for capital, but with government manipulation and Fed money creation, it's just a gambling den and a screen for depression. Y'all think: what would happen if investors like my friend's dad, all over the country, took their money out of the crooked stock market and invested it in local enterprises? We'd have the biggest economic boom since 1792, for presently the stock market starves local entrepreneurs of capital. Tragedy is that otherwise prudent and well-meaning investors are seduced by Washington and media apparatchiki who pimp for Wall Street.

Today the US DOLLAR index is down 35.3 basis points, trading at 75.039, down 0.45%. Dollar may have busted itself today by dipping below 75, although it barely recovered. 75 is the pivotal point. If the dollar falls through that, it falls a long way. 50 DMA may act as a safety net at 74.91. Even if the buck drops back to 73.90 or even 73, it's due for a bigger rally. May take months to unfold.

Dr. Frankenstein must have jolted the euro today because it rose up to the 20 DMA, which coincidentally is where the 50DMA also resides. If the euro, The Only Currency With Bolts In Its Neck, can cross that it will perhaps reverse the downtrend which now straitly imprisons it. EU bigwigs are rumbling and grumbling at Greek parliament, threatening everything but tar and feathers if they don’t pass that austerity package. Got to save those banks, you stingy Greeks!

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.