Friday, August 05, 2011

Look for Lower Silver and Gold Prices

Gold Price Close Today : 1,648.80
Gold Price Close 29-Jul : 1,628.30
Change : 20.50 or 1.3%

Silver Price Close Today : 3819.7
Silver Price Close 29-Jul : 4009.2
Change : -189.50 or -4.7%

Gold Silver Ratio Today : 43.166
Gold Silver Ratio 29-Jul : 40.614
Change : 2.55 or 6.3%

Silver Gold Ratio : 0.02317
Silver Gold Ratio 29-Jul : 0.02462
Change : -0.00146 or -5.9%

Dow in Gold Dollars : $ 143.65
Dow in Gold Dollars 29-Jul : $ 154.16
Change : $ (10.51) or -6.8%

Dow in Gold Ounces : 6.949
Dow in Gold Ounces 29-Jul : 7.458
Change : -0.51 or -6.8%

Dow in Silver Ounces : 299.97
Dow in Silver Ounces 29-Jul : 302.88
Change : -2.91 or -1.0%

Dow Industrial : 11,457.93
Dow Industrial 29-Jul : 12,143.24
Change : -685.31 or -5.6%

S&P 500 : 1,201.16
S&P 500 29-Jul : 1,292.28
Change : -91.12 or -7.1%

US Dollar Index : 74.489
US Dollar Index 29-Jul : 73.868
Change : 0.621 or 0.8%

Platinum Price Close Today : 1,719.00
Platinum Price Close 29-Jul : 1,778.10
Change : -59.10 or -3.3%

Palladium Price Close Today : 740.10
Palladium Price Close 29-Jul : 826.10
Change : -86.00 or -10.4%

Despite the turmoil this week, the GOLD PRICE managed to gain $20.50, while the SILVER PRICE took a bad whupping with a barbed wire whip, but nothing compared to stocks. The PLATINUM PRICE tanked and PALLADIUM PRICE busted. Leave them alone.

Can you picture how the phone lines are heating up from central bank to central bank around the world? Hot enough to fry peppers. Poor Nice Government Men, trying to prop up the euro and stop that money from flying into their own currency. Japanese were brash enough to come out and announce it.

US Dollar Index today lost 63.5 basis points to 74.489, down 0.82%. Gave back half of what it gained yesterday. THIS is how NGM "stabilize" markets.

Despite all, Dollar Index has certainly not broken down and is still grinding out a bottom from which to stage a rally. Remember than in 2008 dollar rallied from 76.15 in late September to 88.19 in November. Panic does that.

Euro mysteriously rose today to close 1.4291, up 1.35%. A great Potemkin currency. Look for 120.

Yen regained some of yesterday's huge loss, closing Y78.43/$ (127.51c/Y100). Still below 20 day moving average and still with that samurai sword hanging over it.

I was just curious what the measured targets of those head and shoulders formations in the S&P500 and Dow might be, so I calculated them: 10,904 for the Dow and 1,140 for the S&P500. Now I know the problem with watching markets is that we grow too pessimistic when the market's dropping and too optimistic when it's rising. You might see a sudden rally back up to 12,000. Might. But 10,904 isn't far from here, either.

Dow rose 0.65% or 74.25 points today to close at 11,457.93. Muse a moment. January 2000 [sic] high was 11,722. Ten years later, stocks are still where they were. Merely to have stayed even with inflation the Dow would have to be 15,365. That's nearly a 25% purchasing power loss. In the same time they've lost over 80% against gold and silver.

Stocks -- like sending out for the barber to bleed you when you have pneumonia.

The GOLD PRICE couldn't quite make up its mind today, ranging from 1670 to 1647.75, but closed near the day's low on Comex at $1,648.80, down $7.40. Then in the aftermarket it kept climbing to $1,663.

Don't get too excited about that. It can well be explained as shorts covering before the weekend in what may be a world wide panic. Anyway, it didn't take gold high enough to do anything more than establish a downtrend with a lower high. The GOLD PRICE has drawn its line in the sand at $1,640. Strong support lurks at $1,605. If gold closes above $1,680, that will tell us it has decided to RISE during this financial crisis instead of falling.

Look for lower GOLD PRICES.

If I contented myself with saying silver had lost 189.5c from Friday to Friday, I would be calling King Kong a "fair-sized monkey." From the week's high close at 4174.7c silver lost 355c to close Comex today at 3819.7c. It lost 122.1c today.

Gold/Silver ratio closed at 43.166, up a full ounce from yesterday.

Silver had a huge 230c range today from 3981 to 3749. After yesterday's huge waterfall silver's bounce was tiny, and regained nothing. Climbed in the aftermarket a little, but clearing books for the looming weekend explains that.

The SILVER PRICE will move lower. First target is the 200 day moving average, now at 3366c. Any close above 4175c gainsays that.

The mess in Europe is not fixable. The banks might be cobbled together again, but not without swift, decisive measures. Of all the EU government and EC responses, none have been swift and decisive. Since they have only two weapons, Liquidity and Blarney, they have only one choice: PRINT MORE MONEY. Caught in the deadly contagion of crisis and panic in the interwebbed world of Globalism they themselves have woven, US authorities will respond with the same weapon: PRINT MORE MONEY.

This will worsen all the economic problems, perhaps even ushering in a hyperinflationary depression. In the immediate future there's better than a 50/50 chance Europe will drag the US into crisis. Here are my suggestions for self-protection:

1. Get liquid. Pay down debt as much as you can. Sell non-performing investments, like stocks, or investments that will suffer from depression or inflation.

2. Close out leveraged positions. Markets are way too volatile for that.

3. Hold on to silver and gold.

4. Hang on to cash anticipating great bargains in a crisis. Remember gold went to $700 and silver to 880c. Gold/silver ratio went to 84, offering a great gold to silver swap. Not expecting those numbers again, but we might see the analogs.

5. Fill up propane tanks, home gasoline or diesel tanks.

6. Stock up on food -- long term storage food, not smoked oysters and tomato soup. Rice, for instance. Dehydrated food. MREs.

7. Stock up on ammo.

8. Get out of the city, or at least have a country place waiting to receive you.

Don't wait, and don't misunderstand. The numbers above are NOT my targets for silver and gold. As yet I am not even sure gold will act as it did the last time, plummeting while the dollar rocketed. Maybe gold will drain off some of that flight to quality from the dollar.

Don't be fooled by my calm words, either. Y'all are reading the equivalent of an air raid siren, and y'all had better run for cover.

MILK NAZIS STRIKE AGAIN! Government guardians of the public health are at it again, arresting the owners of Rawesome Foods in Los Angeles and even the head of the local Weston A. Price Foundation chapter. What called forth the SWAT team? Milk. Deadly raw milk. You see, in Los Angeles the murder rate is so low, and drug traffic so rare, the authorities have time to focus on the real criminals who dare to sell raw milk, which, after all, has not yet been proven safe in the 6,500 years mankind has been guzzling it. If the government didn't stop this insolent crime why, health might break out all over, and what would we do then? Who would drink the High Fructose Corn Syrup soft drinks? Who would take all Big Pharma's drugs? It would be a national catastrophe.

The purpose of all regulation is to stifle competition. Milk is the most consumed food in the US. Who subsidizes the milk industry that produces all that dead and deadly pasteurized milk? Whoops -- the US government.

My dear friend Catherine Austin Fitts published an article today analyzing the effect of stifling competition. Y'all will want to go read it at Don't miss it.

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.