Thursday, June 16, 2011

Silver and Gold Prices will Likely End the Year at Prices Higher than those we've Already Seen this Year

Gold Price Close Today : 1529.30
Change : 3.70 or 0.2%

Silver Price Close Today : 35.553
Change : 0.147 or 0.4%

Gold Silver Ratio Today : 43.01
Change : -0.074 or -0.2%

Silver Gold Ratio Today : 0.02325
Change : 0.000040 or 0.2%

Platinum Price Close Today : 1757.00
Change : -17.90 or -1.0%

Palladium Price Close Today : 759.85
Change : -17.10 or -2.2%

S&P 500 : 1,267.64
Change : 2.22 or 0.2%

Dow In GOLD$ : $161.69
Change : $ 0.50 or 0.3%

Dow in GOLD oz : 7.822
Change : 0.024 or 0.3%

Dow in SILVER oz : 336.44
Change : 0.42 or 0.1%

Dow Industrial : 11,961.52
Change : 64.25 or 0.5%

US Dollar Index : 75.43
Change : -0.175 or -0.2%

A ferocious thunderstorm at my office and a DSL breakdown at home kept me from sending the commentary to you timely yesterday, but today the sun is shining. Well, in some places and for some people.

STOCKS kept from slipping below 11,983 although the came close when the Dow fell to 11,875. While momentum indicators look sore oversold, the five-day chart has that "I tried, Mama, but all I came home with was this handful of beans and a hangover" look to it. Tuesday, after a 172 point loss on Friday, the Dow shot up to 12,076.11. Okay, looking like a turnaround, but yesterday it lost 178.84 to fall to a new low for the move. Today missed being a key-reversal by closing not down but up a scraggly 64.25 points.

Stocks are trapped under 12,000, and now a close over 12,100 is needed to prove a rally. Meantime, not far from today's close at 11,961.52 lies today's low at 11,875. A trend in force remains in force until contradicted. Downtrend surely hasn't been contradicted yet.

As hissing cockroaches are to pets, so are stocks to rational investments.

S&P 500 rose 2.22 to 1,267.64. Hiss. Hiss.

US DOLLAR INDEX today gave back 17.5 basis points (0.23%) to close 75.426. Friends, after a 111 basis point gain yesterday, y'all show some mercy. Dollar actually reached 76.015 today, about the time US Markets were opening -- people fleeing the euro, I reckon.

Dollar Index has now reached its last high (76.16) and is pointed straight skyward toward the 200 day moving average (DMA) at 77.52. The European turmoil could send it much higher.

As the dollar surged skyward yesterday, so the same Greek protestors that lit its fuse trampled the euro on the way. Since Tuesday it has fallen from 1.4500 to 1.4206 now. Today it made a bounce of sorts, but not enough to challenge 1.4200, which has now become resistance. In the past two days the euro has fallen below its 50 (1.4418) and 20 (1.4346) day moving averages, and when it passes through 1.4000, the last low, it will accelerate on its journey to the center of the earth. You can bet the lights will be on late where the European Nice Government Men work as they try to figure how to manipulate their way out of this mess. Greek government got another tranche of bailout money from the ECB today which ought to hold it about two months. Greek prime minister -- it sounds to me, and remember I'm just a natural born fool from Tennessee and don't know a thing about Greek politics -- is posturing as the crucified one who must swallow this bitter pill for his country. Save it for the Grade B melodramas. He ain't saving the country, he's saving the banks. I reckon those 20,000 Greeks in the streets suspect that themselves.

Japanese yen is twitching just over its 20 DMA. Closed today at Y80.70/$ (123.91c/Y100). NGM in the Land of the Rising Sun are puking in their wastebaskets over the idea that some of that money running out of euros will run not into dollars but into euros, making their job (keeping the yen down) unbearable.

GOLD chart today looks like the EKG of a 14 year old girl watching the Beatles on Ed Sullivan. What a mess.

Monday, Tuesday, and Wednesday gold posted slightly higher lows. High for the week so far came at $1,534 yesterday, and today traded rangebound between $1,521.25 and $1,532.75, with a slightly upward bias toward day's end.

Now all this is as exciting as a basket of new puppies, but signifieth little. Unless gold climbs over that last high ($1,546.78), this rally is only twisting back and forth around the 20 DMA (1,529.20) without yielding much information or expectation of higher prices. Expect a higher close tomorrow as Europeans won't want to go home for the weekend long euros or short gold.

Keep your eye on the range: breakdown comes under $1,510 and breakout comes above $1,546.75. Inbetween is only chatter.

Would y'all be interested to learn that gold in euros closed today at E1081, right at the last and all-time high of E1083? It did. Also, euro gold has formed a flat topped rising triangle that usually breaks out upside. DO NOT SHORT eurogold.

My baby SILVER was right tight lipped today, too. Comex silver rose a weak and equivocal 14.7c to 3555.3c. All week silver has been coiling tighter and tighter into a narrow triangle, but gives no information about which direction it will break out, up or down. 3580c is the price to beak, but above that stands 3600c like a stone wall. Silver has to penetrate 3650c before one can credibly even mention rallying. Down trend remains in force.

I warn y'all, this lethargy in SILVER and GOLD will not last forever. Keep your eyes peeled for bottoms coming in the next 6 weeks at most. Silver and gold will likely end the year at prices higher than those we've already seen this year.

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.