Thursday, August 11, 2011

UNDER NO CIRCUMSTANCES Should you Sell Gold or be Short Gold

Gold Price Close Today : 1748.80
Change : (32.50) or -1.8%

Silver Price Close Today : 38.656
Change : (0.669) or -1.7%

Gold Silver Ratio Today : 45.24
Change : -0.057 or -0.1%

Silver Gold Ratio Today : 0.02210
Change : 0.000028 or 0.1%

Platinum Price Close Today : 1787.60
Change : 20.80 or 1.2%

Palladium Price Close Today : 741.45
Change : 15.50 or 2.1%

S&P 500 : 1,172.64
Change : 51.88 or 4.6%

Dow In GOLD$ : $131.72
Change : $ 7.33 or 5.9%

Dow in GOLD oz : 6.372
Change : 0.355 or 5.9%

Dow in SILVER oz : 288.27
Change : 15.67 or 5.7%

Dow Industrial : 11,143.31
Change : 423.37 or 3.9%

US Dollar Index : 74.61
Change : -0.002 or 0.0%

Picture this: markets plunging and rising 4 to 5% a day. Friends, take it from me, the people who make the market simply cannot trade under those circumstances. That turmoil eats you alive.

More evidence a panic is on: I heard today that Swiss 20 francs in Europe are bringing E20 (US$28) over melt per coin and Rooster French 20 francs are bringing E25 (US$35). That's 8.5% and 10.7% respectively. Report says the French are pulling money out of banks on suspicion that after Greece, Portugal, Ireland, Spain, and Italy comes France, and soon. Those are huge premiums considering at wholesale in the US they've been about US$5.

STOCKS today found a friend. My o my. Dow rose 423.37 points (3.95%) to 11,143.31 and S&P500 followed with a 4.63% (51.88 point) rise to 1,172.64

Put that into perspective: Dow in Gold Dollars remains at G$131.72 (7.33 oz). No hope for stocks against silver or gold.

Stocks -- the empty bucket at a raging fire.

US DOLLAR INDEX flatlined today, closed 74.614, down 2.2 basis points. Euro rose 0.46% to 1.4238, meaningless on the chart. Nipponese NGM not yet successful in bringing down the Yen. Their tricks are like using plastic bullets Godzilla.

The GOLD PRICE passed an inscrutable day. High at $1,794.90, low at $1,732. Appeared to break today around $1,760, dropped to $1,750, then briefly to $1,740 and climbed straight back up. Shook the whole incident off and now is trading at $1,764.10. Comex lost $32.50 to close at $1,748.80, but increasingly the real world and Comex have little in common. After Comex closed GOLD climbed over $1,760. Is Comex really relevant, or just useful to those who paint the tape?

Yes, today MIGHT have been the break in gold at a top, but then again, maybe not -- certainly not if driven by panic in Europe. Key will be tomorrow's close, which must not be lower than today's.

UNDER NO CIRCUMSTANCES should you sell gold or be short gold.

The SILVER PRICE lost 66.9c at the Comex close of 3865.6c. Range was 3939c to 3868c. Wide swings are killing me -- silver will be okay and not crash if it can remain above 3700c. Bounced off its 20 DMA today, coming up from beneath. Indicators calling for lower silver.

Now if I were a CLEVER Nice Government Man (no, not a complete oxymoron, since they can print enough money to hire real talent) instead of spending so much trying to crash gold, I would just suppress silver to pull the heart out of gold investors.

Hang on to your silver. Nothing is clear here, and it is for times that lack clarity that we own silver and gold. This much is clear: central banks have not stopped inflating, and must now speed up inflating, so our silver and gold will keep on climbing relentlessly.

On 11 August 1860 the first successful silver mill in American began operating, in Virginia City, Nevada. The Comstock Lode there was discovered in 1859, and as memory serves me it produced over a billion oz. of silver. What most people don't know is that the value of gold produced over the whole life of the mines was about equal to the value of the silver from the Comstock. Adjusted for inflation, production at peak in 1877 alone was about $270 million in gold and $400 million in silver. It wasn't new silver supply that drove the price of silver down after 1873, it was politics and the Crime of '73, demonetizing silver.

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.