Monday, August 15, 2011

Gold Price Today Simply Refused to Take a Back Seat

Gold Price Close Today : 1755.50
Change : 15.30 or 0.9%

Silver Price Close Today : 39.298
Change : 0.197 or 0.5%

Gold Silver Ratio Today : 44.67
Change : 0.166 or 0.4%

Silver Gold Ratio Today : 0.02239
Change : -0.000084 or -0.4%

Platinum Price Close Today : 1813.00
Change : 17.00 or 0.9%

Palladium Price Close Today : 744.00
Change : 0.00 or 0.0%

S&P 500 : 1,204.49
Change : 25.68 or 2.2%

Dow In GOLD$ : $135.22
Change : $ 1.37 or 1.0%

Dow in GOLD oz : 6.541
Change : 0.066 or 1.0%

Dow in SILVER oz : 292.20
Change : 4.00 or 1.4%

Dow Industrial : 11,482.90
Change : 213.88 or 1.9%

US Dollar Index : 73.86
Change : -0.657 or -0.9%

GOLD PRICE today simply refused to take a back seat. Friday it made a low at $1,724, but today the low came at $1,732.20. After closing Comex at $1,755.50, up $15.30, it relentlessly elevated in the aftermarket to $1,766.10, the high for the day.

Let's talk about maximum downside. Chart shows a gap at $1,675, so that might be a target. Before that, $1,720 is stubborn support. Further down, $1,625 will catch gold, then below that lies the 50 DMA at $1,587.54.

However, I am not yet willing to count the panic past and GOLD defeated. Any close over $1,800 turns gold's face skyward. A close below $1,725 turns it down decisively.

SILVER on Comex closed at 3929.8c, up 19.7c, but that tells only a short part of the tale. After Comex closed the SILVER PRICE  kept on bulling ahead, nearly 60 more cents to 3991, well above the 20 day moving average at 3965c. I remind y'all the 20 DMA serves as the trip wire for POSSIBLE upmoves. Possible because the crossover must be confirmed by higher closes.

The SILVER PRICE keeps on refusing to roll over and play dead. I understand that this sort of range trading frustrates intensely, but we merely have to endure it.

Y'all ought to be accumulating both silver and gold. Forget about corrections -- they will come and go, 5%, 10%, or 30%, yet we don't look at those, but at the unseen goal, the triple, quadruple, or quintuple. Ride the primary trend, forget about the rest.

In an example of near-perfect government stupidity, France, Spain, Italy, and Belgium have banned short selling of financial (read "bank") stocks. Of course, determined investors will find other creative ways to short the sector, maybe even by shorting the euro, but statistics from earlier bans show that they are hopelessly ineffective to stop price slides. Worse yet, bans add uncertainty to the market and cripple the market's ability to discover an accurate price based on true value.

As usual, the world's bank-controlled puppet governments act to cripple markets and prop up the banks. Were I a depositor in French, Spanish, Italian, or Belgian bank I'd pull out my money so fast the suction would rip the paper off their walls. The ban virtually guarantees that the banks are so rotten they cannot withstand the action of a free market. Otherwise, why protect them?

If governments subsidized air, we'd all be suffocating in ten days. I'm only a natural born fool from Tennessee, and even I know that.

STOCKS had a big day, cavorting like goats in August up 213.88, up 1.9% on the Dow to 11,482.90. S&P cavorted, too, up 25.68 or 3.03% to 1,204.49.

Did this surprise y'all? After a waterfall the size of Victoria Falls, there'll come some kind of bounce. But I will warn y'all that the waterfall has not reached its bottom pool, but is only bouncing off the rocks. Reaction may reach 11,860, maybe even the 200 dma 11,993.51, maybe even 12,000, but gravity has stocks firmly in hand now, and will work his will.

I bet a lot of y'all don't know about goats in August, do you?

Stocks -- they are the pool of cool alkaline water in the Investment Desert.

The US DOLLAR INDEX tumbled 65.7 basis points today (0.85%) to 73.864. That fits the Nice Government Men's need to contain the dollar's rise and the euro's fall and the yen's rise. However, it doesn't change the dollar chart. Last low was 73.82, one before that was 73.42, and wanting a close below that, the dollar remains in an embryonic uptrend.

The euro, the currency with the electrical connections in its neck like the Frankenstein monster, found an outlet today, plugged in, and jumped 1.35% to 1.4442.

Japanese Yen today dropped a tee-tiny bit, to 130.17c/Y100 (Y73.82/$). Still near all time highs.

On 15 August 1971 President Tricky Dick Nixon imposed a 90 day wage and price freeze, a 10% import surcharge, and closed the gold window ending the convertibility of dollars into gold for foreign nations under the Bretton Woods Agreement. Bretton Woods was worse than a three-legged mule, expensive to feed with no real benefit, but it was an agreement, a word-giving. Nixon launched the nations of the world of floating exchange rates and wholly irredeemable fiat money. Si monumentum quaeris, circumspice.
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.