Wednesday, September 28, 2011

For Now Silver and Gold Prices Remain in a Down Trend

Gold Price Close Today : 1616.10
Change : (34.50) or -2.1%

Silver Price Close Today : 30.084
Change : (1.400) or -4.4%

Gold Silver Ratio Today : 53.72
Change : 1.293 or 2.5%

Silver Gold Ratio Today : 0.01862
Change : -0.000459 or -2.4%

Platinum Price Close Today : 1531.00
Change : -35.00 or -2.2%

Palladium Price Close Today : 623.00
Change : -27.00 or -4.2%

S&P 500 : 1,151.06
Change : -24.32 or -2.1%

Dow In GOLD$ : $140.84
Change : $ 0.71 or 0.5%

Dow in GOLD oz : 6.813
Change : 0.034 or 0.5%

Dow in SILVER oz : 366.01
Change : 10.56 or 3.0%

Dow Industrial : 11,010.90
Change : -179.79 or -1.6%

US Dollar Index : 77.92
Change : 0.414 or 0.5%

Sobriety visited the stock market today, and no one was much pleased to meet her.

Dow made raggedy attempts to rise, but about 1:00 Reality and Sobriety began selling, and from there it was all downhill and Katy-bar-the-door. Dow sank 1.61% (179.79 points) to 11,010.90, vomiting back all yesterday's gains and part of the day before's. S&P lost 2.07% (24.32 points) to 1,151.06. Gone are the visions of the Great Bucket taking away all the sovereign debt problems, and returned are the grim facts of economic outlook.

In Europe the eurocrats are leveraging the crisis to further their schemes of centralizing more power. Wow, now there's a surprise.

US DOLLAR INDEX yesterday made the "final kiss good-bye" to its breakout point, and today gained 41.4 basis points (0.5%). Dollar's liable to run strong for a week or so, and today was already tapping on 78. The 50% retracement of the decline that began mid-2010 and bottomed in May 2011 is 80.58.

The Franken-currency, the euro, continues to tumble since falling out of its trading range earlier this month. Today closed down a hair at 1.3545. Count on seeing 1.3000, and wait on 1.2000. Japanese yen remains on the upward side of a breakout and above its 20 dma. Closed today at 130.66c/Y100 (Y73.53=$1).

It's a good thing markets are so tough to parse, otherwise the Riviera would be chockablock with successful investors and the room prices would skyrocket. But as it is, just about the time you think you understand what the market is doing, it pulls out the rug and your forehead dives into the concrete.

Take SILVER and GOLD. They fell today, right sharply. Silver lost 140c, most of yesterday's 157c gain, to close at 3008.4c. Oddly enough, Friday's close was 3006c, about the same. Gold closed Comex at $1,616.10, down $34.50. Clearly, resistance at $1,675 yesterday has proven victorious, but gold couldn't be broken below $1600 -- today's low hit $1,598.60.

So you look at that and the last few day's trading, and naturally your little mind extends that fall indefinitely out into the future. But the premium on US 90% silver coin rose yesterday, and today again. Now wholesalers are buying 90% at 85c an ounce under spot and selling at 25c over. Look over your shoulder, too, at that Gold/Silver Ratio, which broke out over 45.50 resistance and has traded as high as 54.481.

These things argue AGAINST lower prices. The SILVER PRICE defended 2950c today, too, and if it can hold that, then Monday becomes a spike bottom. The GOLD PRICE defended the $1,600 level in like manner. So far, so good, but the past 3 days action also might be a reaction to a low, rolling over and turning down once again.

As I said, if this was easy, we'd all be living on the Riviera, smoking two dollar seegars, drinking Ripple, eating gooey-center bon-bons and driving big Chevys. Scoping these markets is all the more tricky because so many huge traders use computer programs, which exacerbates, accelerates, and exasperates every move up or down.

But I am anticipating. For now SILVER and GOLD PRICES remain in a down trend and have done nothing to contradict that. Be patient, keep your money dry and ready to buy more silver and gold.

I apologize that our phones have been so jammed since Friday that we have not been able to return calls timely. Please forgive us. For those of you who want to swap GOLD for SILVER at our trigger point 57.5, I suggest that rather than try to reach us while everybody in the world wants to make a trade or ask a question, you enter an open order with us. That way when the market hits the trigger, we enter the order, but you need to understand that an open order is just like entering an order with us by phone. Unless you call and terminate it before the market hits the trigger price, we will enter the order and cannot later change or cancel it. To enter an open order you must make a $200 deposit, refunded when the order is entered or if you terminate the order before it is entered.

For a letter that explains all this and offers a form for the open order, please send us an email at with "Open Order Letter" in the subject line.

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.

WARNING AND DISCLAIMER. 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 short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

One final warning: NEVER insert a 747 Jumbo Jet up your nose.