Friday, November 18, 2011

Whatever Gold Price Downside Risk Remains Here Is Peanuts Compared to the Triple of Quadruple Upside

Gold Price Close Today : 1,724.70
Gold Price Close 11-Nov : 1,787.50
Change : -62.80 or -3.5%

Silver Price Close Today : 3241.3
Silver Price Close 11-Nov : 3467.1
Change : -225.80 or -6.5%

Gold Silver Ratio Today : 53.210
Gold Silver Ratio 11-Nov : 51.556
Change : 1.65 or 3.2%

Silver Gold Ratio : 0.01879
Silver Gold Ratio 11-Nov : 0.01940
Change : -0.00060 or -3.1%

Dow in Gold Dollars : $ 141.39
Dow in Gold Dollars 11-Nov : $ 140.54
Change : $ 0.84 or 0.6%

Dow in Gold Ounces : 6.840
Dow in Gold Ounces 11-Nov : 6.799
Change : 0.04 or 0.6%

Dow in Silver Ounces : 363.93
Dow in Silver Ounces 11-Nov : 350.52
Change : 13.41 or 3.8%

Dow Industrial : 11,796.16
Dow Industrial 11-Nov : 12,152.93
Change : -356.77 or -2.9%

S&P 500 : 1,215.65
S&P 500 11-Nov : 1,263.73
Change : -48.08 or -3.8%

US Dollar Index : 78.081
US Dollar Index 11-Nov : 76.906
Change : 1.175 or 1.5%

Platinum Price Close Today : 1,593.30
Platinum Price Close 11-Nov : 1,643.20
Change : -49.90 or -3.0%

Palladium Price Close Today : 606.10
Palladium Price Close 11-Nov : 660.95
Change : -54.85 or -8.3%

The GOLD PRICE failed in its second try at $1,800. Reached for it on Monday, but fell back to $1,760 - $1,765 and traded sideways through Wednesday. Once it broke $1,740 on Thursday, gold tumbled all the way to $1,711.

Can't interpret that as anything but a breakdown. This should be the second and final leg down we've been waiting for.

How far will it run? Support remains at $1,705, and below that at $1,675. The GOLD PRICE caught this week at the 50 dma (1,715.80) but next week might reach $1,675. If that holds not, then look at $1,600, $1,536, and $1,475.

Today the GOLD PRICE gained $4.90 to close Comex at $1,724.70, a flat wee bounce after falling $54.00 yesterday.

In view of the unsolved European crisis and the ripeness of this gold correction, I am ready to start buying by averaging down. Buy some at $1,705, $1,675, $1,605, etc. BECAUSE I DO NOT KNOW WHERE THIS WILL START BUT I AM CONFIDENT GOLD REMAINS IN A BULL MARKET WITH FAR MORE UPSIDE. Whatever 10% or even 20% downside risk remains here is peanuts compared to the triple or quadruple upside.

The SILVER PRICE was taken to the same woodshed as gold. Once it broke 3350c on Thursday, silver never stopped until it hit 3088c. Today it rebounded, but not with anything more than a dead cat bounce to 3250c.

To gainsay this breakdown, silver would have to close above 3250c then rapidly above 3400c.

Down below several landing zones appear possible. 3000c is one, then 2850, and finally 2600c. Lower prices are possible, but not likely.

I expect to see most of the metals' downside in the next two weeks, if not sooner. DON'T MISS THIS: Right now, when every timid heart, including your own, is trembling, audacity and a cool head will pay off. Now is the time to buy, not when all the silly media cheerleaders have discovered a strong upward trend and prices are running away to the upside.

GOLD SILVER RATIO swappers should mark that my commentary yesterday contained an error. I meant to recommend you swap silver for GOLD, not vice versa. Ratio is rising, which means silver is growing cheaper against gold, and we always swap from the dear metal into the cheap. If you swapped silver for gold in the spring at any level lower than 42:1, you can swap gold for silver now and realize gains in silver ounces above 28.5%. Me, I would scoop those ounces off the table and into my lap.

SWAPPERS who swapped higher than 42:1 keep on waiting for a 57.5:1 ratio, which may come soon.

Delude not thyself, neither listen to siren voices blaring that the precious metals bull market has ended. It has not, and will run to yet greater heights in the next 3-10 years.

I don't know what happened and can't find out yet, but my commentary for 17 November was not sent out or posted to the website (there was none for 16 November). Whenever they're not posted at you can also check at, where they are also posted.

The week was not kind to the little things, or to anything else, except the US dollar index. Ever-volatile silver and palladium took the deepest wounds, but stocks didn't lag far behind. Never mind the two bank-owned shills who seized power in Greece and Italy, markets are not satisfied. That fear and uncertainty is churning all markets, and will until some real solution is brought forth. By the way, "real solution" includes not "haircuts" for the banks, but "eviscerations." A debt jubilee. Debt is so huge that it can't be paid without perpetual debt slavery. This crisis snowball is fast rolling down hill, and soon will speed out of control, I fear.

Before I say anything, I want y'all to know I'm tearing the tops off the charts and reading out whatever they say, good or bad. If y'all don't like it, don't shoot the messenger.

Stocks this week fell down out of an even-sided triangle at 11,950 and gives the Dow an initial target of 11,250, below the 50 day moving average (11,523 today). Now looks as if the Dow will NOT make any final push up after all.

All this is a breakdown after a Jaws of Death has formed, a most reliable top formation. Bad vibes. Bad karma. Bad juju.

Today the Dow gained 25.43 (measly 0.22%) to close at 11,796.16. S&P, on the other hand, dropped 0.48 (0.004%) to 1,215.65, while the Nasdaq Composite and Nasdaq 100 both closed slightly lower. That argument signals bewilderment in the market, and bewildered markets don't rally, generally.

Stocks -- somebody (not I) might be able to pick winners in the next 4 years, but there' won't be many. Most will be mauled by the bear.

US DOLLAR INDEX dropped 20.1 basis points today (0.26%) to 78.081, but look, folks, it jumped in one week 117.5 basis points 1.5%. Money fleeing Europe is driving it, and will drive it. It is rallying, and could reach 83.15.

The Japanese Nice Government Men will have to tame the rambunctious yen, and right soon. Without exports, Japan will become an island of unsalable parked cars. They've hit it twice since the earthquake, but every time it comes right back -- lots of scared money out there looking for a refuge. They must hit it again soon. Today at 129.98c/Y100 (Y76.93/$1).

The world is so scared of the Euro that it has gapped down twice in the last two weeks and will continue to fall toward 1.2000. Closed today 1.3515, up 0.39%.

We have a beautiful glowing red-orange fall sunset here this evening, better than fine wine.

Y'all enjoy your weekend!

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.