Monday, September 26, 2011

Rare Opportunity to Buy Silver and Gold at Fire-Sale Rates

Gold Price Close Today : 1592.70
Change : (45.00) or -2.7%

Silver Price Close Today : 29.929
Change : (0.131) or -0.4%

Gold Silver Ratio Today : 53.22
Change : -1.265 or -2.3%

Silver Gold Ratio Today : 0.01879
Change : 0.000436 or 2.4%

Platinum Price Close Today : 1562.00
Change : -48.40 or -3.0%

Palladium Price Close Today : 632.00
Change : -9.10 or -1.4%

S&P 500 : 1,162.95
Change : 26.52 or 2.3%

Dow In GOLD$ : $143.34
Change : $ 7.39 or 5.4%

Dow in GOLD oz : 6.934
Change : 0.358 or 5.4%

Dow in SILVER oz : 369.00
Change : 10.67 or 3.0%

Dow Industrial : 11,043.86
Change : 272.38 or 2.5%

US Dollar Index : 77.95
Change : 0.646 or 0.8%

I reckon mobs of silver and gold investors out there are chewing their fingernails down to the quick, but they could spare themselves a lot of blood loss if they'd lift up their heads and look around. 'Tain't the end of the world, let alone the end of the bull market. 'Tis a routine correction - a large one, but routine as a bull market unfolds.

Dollar index today rose through 78 and closed at 78.50. Then something happened in the aftermarket, I don't know whether it was a news item or just the herd stampeding the other way, and the dollar sank back to 77.95, which was still higher than Friday. Dollar will rise further. Euro rose to 1.3451 at close today, up 0.37%, but in aftermarket trading stands at 1.3365. Doomed. Yen rose 0.44% to 130.97 cents/Y100 (Y76.35=$1). Trying to rise.

The Tooth Fairy visited the stock market today and raised the Dow 272.38 points (2.53%) to 11,043.86. S&P500 also rose 2.33% or 26.52 points to 1,162.95. Technically looks like Thursday and Friday formed a rounding bottom, and it rose today to the 11,100 point where it broke down Wednesday. Must prove itself by crossing that barrier.

STOCKS -- Wall Street's way of harvesting Main Street.

GOLD and SILVER markets today hardly can be described. I came in and silver was at 2884, I grabbed phones and started answering and before I could cover what I'd sold SILVER had climbed 100c. Today's low came at 2604c, but about 3:00 a.m. our time. Nobody got it there. High on silver was 3078c, and after closing Comex down 13.1c at 2992.9c, it's trading in the aftermarket at 3062c. What chaps me most of all is the premium on US 90% rising, 50c/oz. at a lick at the end of the day. Back in 2008, y'all may remember, same thing happened when all forms of physical silver just disappeared.

The GOLD PRICE lost $45.00 when Comex closed, coming to rest at $1,592.70. High was 1,637.65, low (again, at 3:00 a.m.) at $1,532.45. In the aftermarket it climbed to $1,623.65.

Hogwash. It's neither normal nor sensible, but then sometimes markets aren't either.

Here's what's most occupying my mind. The gold/silver ratio as a percentage of its 20 day moving average yesterday touched 120%, highest it has ever been, far's as my file runs to 1998. Today it fell a little, to 116.8%. Generally that's a very reliable indicator, 115% at bottoms and 88 - 92% at tops.

What does that mean? That we may have seen the high in the gold/silver ratio. However, as violent as this day's trading was, I want to give SILVER and GOLD PRICES another little while to fall. I may end up eating gravel, but the rational side of my brain keeps telling me to wait just a little.

Another thing nagging at me is that the SILVER PRICE has dropped below its 300 day moving average, a rare occurrence. Now it might stay below that 300dma for two or three weeks, but crossing it almost always says, the bottom is near.

SILVER and GOLD PRICES could drop more. My rational mind and the charts tell me that. But my intuition keeps on asking where all that buying was coming from today. A 70 cent silver rise and $31 silver rise in the aftermarket is right stout, no matter how you cut it.

Gently, gently I am starting to buy. Just can't help it, I'm too nervous about silver and gold. Nervous, too, about the unfolding crisis. Of this much I am sure: you are now watching a rare opportunity to buy silver and gold at fire-sale rates.

Friday after markets closed Comex announced it was raising margins on silver and gold contracts. No doubt somebody got that news before the press release and sold in anticipation. But the stories metastisizing on the internet that this proves a conspiracy are just silly. Commodity markets are run for the benefit of the market makers, and it's not in their interest for investors to go bankrupt. They raise margins on EVERY hot market.

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.