Thursday, September 29, 2011

Unless the Gold Price Batters Through that $1,620 Ceiling and the Silver Price Through 3100c, Lower Prices Lay in Store

Gold Price Close Today : 1615.50
Change : (0.60) or 0.0%

Silver Price Close Today : 30.472
Change : 0.388 or 1.3%

Gold Silver Ratio Today : 53.02
Change : -0.704 or -1.3%

Silver Gold Ratio Today : 0.01886
Change : 0.000247 or 1.3%

Platinum Price Close Today : 1528.00
Change : -3.00 or -0.2%

Palladium Price Close Today : 623.00
Change : 0.00 or 0.0%

S&P 500 : 1,160.40
Change : 9.34 or 0.8%

Dow In GOLD$ : $142.73
Change : $ 1.90 or 1.3%

Dow in GOLD oz : 6.904
Change : 0.092 or 1.3%

Dow in SILVER oz : 366.04
Change : 0.04 or 0.0%

Dow Industrial : 11,153.98
Change : 143.08 or 1.3%

US Dollar Index : 77.93
Change : 0.078 or 0.1%

Metals put in a mixed close day. The GOLD PRICE gained a microscopic 60 cents to close Comex at $1,615.50 while the SILVER PRICE gained 38.8c to close 3047.2c, but didn't break through 3100c resistance or even 3050c, although in the aftermarket it has climbed to 3072.5c.

Ambivalence, ambivalence, all is ambivalence! The SILVER PRICE has established support at 2900c, but cannot climb through 3100c. The GOLD PRICE has some sort of floor at 1580, but cannot break through the $1,620 ceiling. All this has unfolded against a background of lower highs and lower lows, i.e., a downtrend.

Thus we must conclude that unless the GOLD PRICE batters through that $1,620 ceiling and the SILVER PRICE through 3100c, lower prices lay in store. However I caution that gold and silver could still rally up to the bottom of that consolidation area, about $1,750, seem strong as a garlic milkshake, then step into an elevator shaft.

Be patient, be patient. Buy some if you just can't stand the wait, but be patient.

What doth one say about a market that rises to a high of 11,269, then gives up 40% of that 259 point gain to close at only 11,153.98, up 1.3%? One sayeth, "The Dow is tapped out." S&P500 rose a feebler 9.34 (0.81%) to close 1,160.40.

All this, remember, was riding the crest of the euphoric wave pouring out of Euroland because the German Bundestag voted today to sell out Germany to the banks, i.e., back the

Bucket for Sovereign Debt a.k.a. euro bailout fund hung with the cosmically impossible name of European Financial Stability Facility. Sounds like some place you'd get your oil changed when your Volvo engine's running too hot.

Durned if the eurocrats aren't getting away with turning the crisis to their advantage and increasing their centralized tyranny!

It is historically ironic that Germany now has all she fought for in two world wars, but without the bloodshed: the Fourth Reich. I went to school in Germany and am a great admirer of German culture and civilization, except for the Nazi aberration. Remember that the German Empire began to be built on the ruins of Rome with Charlemagne (768-814 a.d.) and was officially founded as the First Reich with the crowning of Otto I in 962. (Remember that the Franks like Charlemagne were really Germans who settled in France, so ultimately the French are really Germans, or the Germans are French, and I'm my own grandpa.) The First Reich lasted until Francis II abdicated in 1806. The Second Reich came with the founding of the Prussian empire upon the defeat of the French (those "other" Germans) in 1871 with Wilhelm I. That Reich ended in 1918 when Wilhelm II "the Incompetent" abdicated. Then the Nazis came along and, as they always so skillfully did, co-opted existing symbols while filling them with wholly new meaning. (Think of the Hakenkreuz or swastika used to replace the Christian cross.) Anyway, the Nazis proclaimed the Third Reich, and that ended with Hitler in 1945. Later skilful German statesmen worked to set up a European political order that would be peaceful and prosperous, but somewhere along the way that metastasized into the European bureaucracy. Bottom line is, today the Germans are the lynchpin, not to say the rulers, of the Eurozone. The ancient Reich has been revived. And in Asia, the Japanese have hegemony in the "Greater East Asia Co-Prosperity Sphere" they sought to establish by force 1905 - 1945. Ironically enough, most of the big German and Japanese corporations from those "bad" years are still around, Mitsubishi, e.g., making cars instead of Zero fighter planes, Krupp, Siemens, etc. Governments and dictatorships may come and go, but corporations are forever. The US won the war, while the corporations stole the peace.

Whoa! Sorry, I got clean off point. Back to today's markets.

US DOLLAR INDEX was 77.93 when I began writing this, up only 7.8 basis points, but now is trading over 78 at 78.028, up 0.23%. SOMEbody (read: Nice Government Men) keeps slapping the dollar down every time it pokes its uppity head above 78. That won't last forever, and the dollar will move higher. Poor, pitiful Euro rose a little today, 0.38%, to 1.3593, ready to begin its next plunge. Yen dropped 0.34% to 130.18c/Y100 (Y76.81/$1). Japanese NGM have still not chastised and tamed their wayward currency.

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.