Monday, October 24, 2011

Will We See a Higher Gold Price For The Next Few Days? Comex Closed Today at $1,651.50

Gold Price Close Today : 1651.50
Change : 16.40 or 1.0%

Silver Price Close Today : 3162
Change : 44.7 cents or 1.4%

Gold Silver Ratio Today : 52.23
Change : -0.223 or -0.4%

Silver Gold Ratio Today : 0.01915
Change : 0.000081 or 0.4%

Platinum Price Close Today : 1543.20
Change : 27.20 or 1.8%

Palladium Price Close Today : 640.00
Change : 23.00 or 3.7%

S&P 500 : 1,254.19
Change : 15.94 or 1.3%

Dow In GOLD$ : $149.12
Change : $ (0.15) or -0.1%

Dow in GOLD oz : 7.214
Change : -0.007 or -0.1%

Dow in SILVER oz : 376.77
Change : -2.04 or -0.5%

Dow Industrial : 11,913.62
Change : 104.83 or 0.9%

US Dollar Index : 76.04
Change : -0.474 or -0.6%

The GOLD PRICE upside down head and shoulders that appears on it's five day chart confirmed itself again today. Bottom of the head last Thursday came at $1,605, neckline stands about $1,660, so that gives a target of $1,715. Any trading below $1,635 would gainsay that outlook and send GOLD down. However, I believe we will see higher prices for a few days. Comex closed gold today at $1,651.50, up $16.40 (0.4%)

The SILVER PRICE is riding the same train with GOLD. 3200c is now silver's barrier above. Comex closed today at 3162c, up 44.7c (1.4%). Silver must hold 3125c or destroy its optimistic pattern. Target is about 3400c.

Pssst! Don't tell anybody, but things are not going well in Euro-land. Sarcophagus and Ferkel are not getting along. At one point this weekend folks down the hall could hear them yelling at each other, and Sarcophagus was making snide remarks remarks about Ferkel eating cheese when she was supposed to be on a diet.

The meeting decided on only one thing for certain: to hold another meeting in four days. Meanwhile all sorts of financial gymnastics are being suggested so that Greece doesn't have to use the D-word. Banks want their haircut limited to 40%, while autocrats say they'll have to take a 60% loss.

Just to put all this into perspective against the Grand-Canyon-ness of the sovereign debt mess, the 440 million euros already in the European Stabilization Fund would not suffice to pay off Greece's debt by itself, let alone any of the other bankrupts.

The crisis has not ended, the public is simply refusing to register it. Witness US stocks today, playing on the slopes of a smoking, steaming Mt. Vesuvius in Europe. Dow rose 104.83 (0.89%) to 11,913.62 while the S&P500 outpaced the Dow, rising 15.94 (1.29%).

Not because I am a spoilsport only, but out of curiosity I ask in passing, "If European banks are trashed, can US banks escape unscathed? The US economy?" I fell like the fellow in the movie, "They Live", who finds the special sunglasses that enable him to see that aliens are walking around running the earth. Am I the only one who can see these things? Surely not, but then, I don't work for any government or central bank. I'm just a natural born fool from Tennessee, not smart like them fellers.

US DOLLAR INDEX dropped today to 76.04, losing 47.4 basis points or 0.61%. That carries the $ index down past its 50 day moving average (DMA, now 76.41) and almost to its 200 DMA (now 75.84). If my expectation is correct, the dollar index ought to catch and hold here, and soon begin turning up.

Euro rose 0.26% to 139.29, and is not exactly burning up the boards, blocked at 1.395, and not benefiting from the insane euphoria over this past weekend's non-event. True, the euro did cross above its 50 DMA (138.82) so mayhap this will be the last push up that carries the Euro to its 200 DMA (140.65) and the end of its rally.

The yen keeps on refusing to behave. After last Friday's new all time high, it closed higher than Friday's close at 131.43c/Y100 (Y76.07/$1), up 0.24%. Nice Government Men in Tokyo better catch it soon or they may have to deal with a financial earthquake.

Y'all need to read Michael Lewis' book, Boomerang: Travels in the New Third World, not because he draws the right conclusions but because he shows the vastness of the insane booms in Iceland, Ireland, Greece, German banks, and US state and municipal governments. With an obtuseness that stretches credulity, he concludes that our evolutionary "lizard core" is to blame. To reach that gem, he had to ignore (1) that without banks there can be no credit-fed boom, because they create the credit, and (2) without governments offering them, there would be no cushy government jobs and pensions for folks to grab at. You build a system driven by greed, then are SURPRISED that it brings out greed in people? Well, there's a lizard in there somewhere, I reckon, but I can't find him. Maybe he's hiding behind banks and governments.

Y'all read the book anyway. 218 pages on a big, fat leading, so it'll take about 4 hours to read.

On 24 October 1929 Black Thursday hit Wall Street in the fist day of the stock market crash that kicked off the Great Depression.

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 bubble has burst, primary trend down.

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.