Monday, November 14, 2011

The Gold Price Remains in an Uptrend Closing at $1,777.80

Gold Price Close Today : 1777.80
Change : (9.70) or -0.5%

Silver Price Close Today : 3401.3
Change : (65.8) cents or -1.9%

Gold Silver Ratio Today : 52.268
Change : 0.712 or 1.4%

Silver Gold Ratio Today : 0.01913
Change : -0.000264 or -1.4%

Platinum Price Close Today : 1644.40
Change : 1.20 or 0.1%

Palladium Price Close Today : 664.90
Change : 3.95 or 0.6%

S&P 500 : 1,251.91
Change : 11.94 or 1.0%

Dow In GOLD$ : $140.45
Change : $ (0.09) or -0.1%

Dow in GOLD oz : 6.794
Change : -0.004 or -0.1%

Dow in SILVER oz : 355.13
Change : 4.59 or 1.3%

Dow Industrial : 12,079.06
Change : -74.62 or -0.6%

US Dollar Index : 77.47
Change : 0.608 or 0.8%

The GOLD PRICE tripped $9.70 to close at $1,777.80 on Comex, but that painted no big break on the chart. All it did was return to that well-known $1,775 support, reserving its option to challenge $1,800 again this week. The five day chart shows gold touching $1,800 last Wednesday, and nearly touching it again this weekend. That could make a double top, but the GOLD PRICE has not tipped its hand yet. A trend in force remains in force until broken, and gold's uptrend hasn't been broken yet.

A break below $1,775 would hurt gold badly, pointing it toward a minimum $75 and possibly $100 drop (as low as $1,675). Danger of that happening would be annihilated by a two-day gold close above $1,800, and break gold out upside.

The SILVER PRICE is mimicking the GOLD PRICE, but with a bit less fervor. She has returned to that well known 3400c support/resistance, and the stakes here are high. Should the SILVER PRICE fall through 3400c, it steps off the top of the building into thin air. Today's range was 3478 - 3393c.

Most likely course is a downside break, since the SILVER PRICE has formed an ascending wedge which usually resolves by breaking out downside. That, however, could reverse in an instant with any slip by the Fixers in Europe. Markets are nervous as a banker in church.

Here's a message for gold-silver swappers. If back earlier this year you swapped out of silver into gold at any realized GOLD/SILVER RATIO of 38:1 or lower, you can now swap back into silver with an approximate 37% gain. I'd grab that. (If your spring swap realized a ratio higher than 38:1, your return will be reduced accordingly. Also, this will only work if you swap back into US 90% silver coin. Any other form of silver severely lowers your gain in ounces because they carry such high premiums).

Why do this now? Because a 37% profit in silver ounces is a 37% profit, plenty big enough to satisfy anybody for six months' investment.

This recommendation has nothing to do with short term expectations for silver or gold or stocks, but is based solely on (1) the rule to take profits timely and (2) the long term ratio trend, which is down.

Today's markets really didn't tell us very much. Stocks dropped a smidgen, along with SILVER and gold, while the euro fell and the dollar index rose. Still, everything remains in the old familiar trading ranges. Wait -- y'all don't think markets really have been fooled by those two Establishment front men installed to end all popular government in Italy and Greece, do y'all? As I always say, the Establishment has only two weapons, liquidity and blarney. Those two shills represent big booms from the Blarney Cannon.

To the facts! US dollar index rose 60.8 basis points or 0.78% to 77.471, a sizeable move. What accomplisheth this on the 5-day chart? Wednesday last week the $ index rose straight up from 76.6 to 78.0, peaked nearly 78.20 early Thursday, then fell into Friday's low about 76.8. It left behind a support level at 77.40.

Thus today's rise, clearing 77.40, contradicts all that downside last week, and points the dollar up again. As long as it advances tomorrow, 'twill be in rally mode.

Watching the Japanese yen is as embarrassing as accompanying your friend to his daughter's piano recital where you doesn't know the piece and thumbfingers her way through. Money has been fleeing Europe and some wanted to run into the yen, but the Japanese Nice Government Men couldn't allow that, because a higher yen chokes off Japanese imports, and Japan is nothing more than an island-factory exporting to live. At last they acted, and the yen dropped from 132c/Y100 to 127.50 in one day. But it was shortsighted, because they only punished those long Yen without giving them a reason not to buy yen again. The yen has since crept up to close 129.69 today, up 0.87% and above its 20 day moving average (129.62 today). Worse still, it has crept back above the downtrend line and the trading range above that, and is about to cross above the 50 dma (129.93).

All this isn't because the Yen is the prettiest currency around and everybody wants to dance with her. Rather, she just doesn't have quite as many warts as all the other girls.

The euro rose on Friday with the news that Fixers had been installed in Italy and Greece, but puked back all those gains today. Closed 1.3630, down 0.87%, and headed for 1.2000.

STOCKS today continued slowly the decline begun from Friday. That Friday peak itself is part of a double top about 12,175. Expectation remains -- unless gainsaid by a close above 12,175 -- that the Dow Jones Industrial Average will continue to sink.

Momentum is BARELY up since the Dow stands above its 200DMA (11,977), but not by much. May still see one last push up to 12,400 before it collapses, but sooner or later collapse it will.

Dow closed down 74.62 (0.61%) at 12,079.06. S&P 500 dropped more, 11.94 (0.94%), to 1,251.91.
News stories are surfacing again about counterfeit coins pouring counterfeit coins pouring out of China.

Remember that counterfeiters most often counterfeit coins that carry large premiums, so that out of an ounce of $,1800 gold they can produce 20 one-dollar coins that sell for $10,000 an ounce. That's another reason always to stick with low premium bullion type coins and eschew numismatic coins.

Besides, the weight and dimensions of bullion coins -- Austrian 100 coronas, Mexican 50 pesos, Krugerrands, American Eagles, Maple Leaves -- are all known, and simply by WEIGHING you will catch almost all counterfeits. You'll find a complete chart of weights for gold coins at

These counterfeit reports generate waves of hysteria in the market, when in fact counterfeit gold coins are generally a negligible problem. Of course, you ought always work with a reliable gold and silver dealer who has been in business for a long time -- like us. Remember that thirty years' experience might not mean much. Many dealers have 30 years' experience, but it's only one year's experience thirty times. Be careful, and count your change.

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.