Friday, July 29, 2011

The Gold Price Today Reached a New Intraday High as Well as a New Closing High

Gold Price Close Today : 1,628.30
Gold Price Close 22-Jul : 1,601.30
Change : 27.00 or 1.7%

Silver Price Close Today : 4009.2
Silver Price Close 22-Jul : 4011.3
Change : -2.10 or -0.1%

Gold Silver Ratio Today : 40.614
Gold Silver Ratio 22-Jul : 39.920
Change : 0.69 or 1.7%

Silver Gold Ratio : 0.02462
Silver Gold Ratio 22-Jul : 0.02505
Change : -0.00043 or -1.7%

Dow in Gold Dollars : $ 154.16
Dow in Gold Dollars 22-Jul : $ 163.71
Change : $ (9.54) or -5.8%

Dow in Gold Ounces : 7.458
Dow in Gold Ounces 22-Jul : 7.919
Change : -0.46 or -5.8%

Dow in Silver Ounces : 302.88
Dow in Silver Ounces 22-Jul : 316.14
Change : -13.25 or -4.2%

Dow Industrial : 12,143.24
Dow Industrial 22-Jul : 12,681.16
Change : -537.92 or -4.2%

S&P 500 : 1,292.28
S&P 500 22-Jul : 1,345.02
Change : -52.74 or -3.9%

US Dollar Index : 73.868
US Dollar Index 22-Jul : 74.224
Change : -0.356 or -0.5%

Platinum Price Close Today : 1,778.10
Platinum Price Close 22-Jul : 1,795.40
Change : -17.30 or -1.0%

Palladium Price Close Today : 826.10
Palladium Price Close 22-Jul : 806.95
Change : 19.15 or 2.4%

I got home a bit earlier than expected, so have an opportunity to send y'all a commentary.

Behold the scoreboard! The GOLD PRICE moved to new resistance area, the SILVER PRICE held on, Stocks down 4.2%, platinum lost a little, palladium jumped 2.4%.

The GOLD PRICE today reached a new intraday high as well as a new closing high. When New York opened today the gold price was wallowing at $1,615, then launched like a rocket clean thru $1,625 resistance to $1,632.45. My $1,625 target has now been reached -- let's see if gold can reach $1,670, too. Comex closed up $14.90 at $1,628.30.

Not clear to me, after last week's performance, that gold is being driven by the US debt ceiling farce or not. Certainly, that is contributing to gold's ebullience, but last week when the Euros "solved" Greece's crisis with a bailout, gold fell the first day and completely recovered the next. More than fear is driving gold, but more what?

Debt ceiling limit day falls on 2 August, so it will be interesting to see what happens. That is hanging over the gold market like a cloud, and when it is removed gold will react one way or the other. Everybody expects it to drop, so maybe gold will oblige by rising. No sure thing here, EXCEPT that over the next 3 - 10 years gold will move higher.

The SILVER PRICE gained nothing this week, but that doesn't quite tell the whole story. It performed well up until Wednesday and Thursday, when it staged a usual correction. Today it regained most of that loss, but 4100c remains as solid resistance. Comex silver closed at 4009.2, up 31.3c.

Are we watching silver assume more monetary allure? Rather than falling away from gold as it responds to financial crisis, it has been rising. That shift has been taking place throughout the precious metals bull market, but is it speeding up?

Anyone with two brain cells left to rub together would be anxious about recommending silver and gold here, staring at a financial crisis deadline in four days, because all their recent strength MAY have arisen out of that fear. Possible certainly they will make another plunge downward before launching a lasting rally. STILL and ALL, silver is proving itself more resilient. If gold is higher or steady the second day after a debt ceiling is announced, it will extend its rally MUCH further before stopping, and take silver thru 5000c.

Stocks fainted badly toward end of the week. Dow today closed 12,143.24, down 96.87 or 0.8% and the S&P500 fell below 1,300 to 1,292.28, down 8.39 or .65%. What meaneth this fall? It crashed through 12,300 support, which was also below the last low and nears 12,000 support. Momentum headed earthward as Dow stands below 20 dma (12,512) and 50 DMA (12,321). Looking sick, and if 12,000 holdeth not, greet 11,875, then 11,555.00

Stocks: the broken tooth in your Inventory of Investment Dental Health.

By the way, NEVER forget this: the Keynesian notion that government spending and borrowing can bring prosperity, and that government can or should run the economy, is the most pernicious political idea in the modern world. Until that doctrine, which the Federal Reserve and yankee government follow mindlessly, is destroyed, there is no economic hope for the United States.

USA TODAY, which is the richest source of outright stupidity and perverse misinformation in our corner of the Milky Way Galaxy, and is written at a 4th grade level as well, PERFECTLY encapsulated in one meager paragraph all the wrong thinking that is killing the American economy today. It's really not often that stupidity reaches the Olympian level, but here it is:

"All things being equal, lower [government]spending translates into slower economic growth, since it means cuts in payments to contractors, layoffs of government employees, and smaller entitlement checks. Already in 2011, softer government spending has sapped growth."

Get this straight: all government spending curbs economic growth. All of it. Government produces nothing, therefore must take all its money from producers by taxation or inflation. Government spending misdirects resources, so is worse than merely setting a match to the bills. It actively MALinvests resources and wastes them. Third, government spending starves genuine entrepreneurs and producers for capital. I have another 874 points here, but that will do for starters.

With that bone out of my throat, I will continue.

US DOLLAR INDEX fell 35.4 basis points today, after climbing above 74 yesterday. Now treading at 73.868, down but not hurting. How dare I say that? the 5 day chart shows a sudden drop and bottom on Tuesday and Wednesday, like a spike or island reversal (but not exactly). Of that bottom the buck launched from 73.4 to 74.4, and remember that 74.5 was the last low and so support. Dollar bottoms slowly, and that's what this looks like. Close next week above 20 DMA (74.75) and 50 DMA (74.81) argues dollar is headed for higher latitudes.

Euro spiked up this week, but failed after a one day gap-up rally. Now fidgeting around with its 50 and 20 DMAs. Has failed to break thru resistance.

Yen today reached a higher high than the earthquake brought on in March, 130.17c/Y100 (Y76.82/$) today against 128.79 (77.64) then. Expect the Nice Government Men who work for treasury and Bank of Japan to counterattack next week to drive the yen down. Japanese export-driven economy (in their Keynesian thinking) can't afford a high yen.

Y'all enjoy your weekend.

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.

Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.