Thursday, December 15, 2011

The Gold Price Close Down 0.6% to Close at $1,574.60

Gold Price Close Today : 1574.60
Change : -9.70 or -0.6%

Silver Price Close Today : 2922.50
Change : 34.40 cents or 1.2%

Gold Silver Ratio Today : 53.879
Change : -0.978 or -1.8%

Silver Gold Ratio Today : 0.01856
Change : 0.000331 or 1.8%

Platinum Price Close Today : 1403.20
Change : -17.50 or -1.2%

Palladium Price Close Today : 617.95
Change : -0.45 or -0.1%

S&P 500 : 1,215.75
Change : 3.93 or 0.3%

Dow In GOLD$ : $155.82
Change : $ 1.56 or 1.0%

Dow in GOLD oz : 7.538
Change : 0.076 or 1.0%

Dow in SILVER oz : 406.12
Change : -3.27 or -0.8%

Dow Industrial : 11,868.81
Change : 45.33 or 0.4%

US Dollar Index : 80.28
Change : -0.308 or -0.4%

Metals had another befuzzled day, with the GOLD PRICE down and the SILVER PRICE up. Gold lost $9.70 to close at $1,574.60 while silver gained 34.4c to 2922.5c. Gold posted its high at $1,593.60 and low at $1,563.90. Silver's range was 2923.6c to 2809.8c.

Yesterday and today the GOLD PRICE has established support at $1,560. SOMEbody is willing to buy it there, and not as many somebodies willing to sell. But that doesn't say $1,560 will hold.

Overnight the SILVER PRICE spiked to a low at 2809.8c, which left behind a bottom-y looking formation. I don't mean "The" bottom, but enough of a platform to stage a bounce off of, say up to 3050c before it runs into opposition.

Tough to describe, but if you drew a line across the May, July, and September gold bottoms, your line would run exactly where gold's fall stopped yesterday and today.

That's not the discovery I made, though. I looked at gold's weekly chart instead of the daily, and something jumped out at my wondering eyes. For the entirety of this bull market, since 2011, the 50 WEEK moving average (now $1,574) has contained any fall. Oh, gold might have pecked thru it by pennies, but save for the giant correction in 2008 when gold dropped through the 50 WMA all the way to and thru the 150 WMA, that 50 WMA has supported the market. No guarantee it will this time, but it's presence nearby implies that gold's decline will halt or slow down. The 150 WMA, in case you are wondering and need something to fret about, lies at $1,267.

If the GOLD PRICE intends to fall a lot further, 'twill do so soon. Otherwise, we keep watching for some confirmation that its fall has ended.

Y'all know already that I went straight to the silver chart to gaze upon the weekly chart. It is not quite as consistent as gold's, but in the main the 50 WMA has also formed the safety net beneath silver. More volatile silver has scratched thru more times that staid gold, but except for 2008, never significantly.

With the 50 WMA now at 3552, SILVER once again, as in 2008, finds itself beneath its 50 WMA. In 2008 once silver broke the 50 WMA it fell to and below the 300 WMA (today at 1865c) before it turned around. The close above that 300 DMA flashed the confirmation that silver's 2008 correction had ended.

These weekly charts suggest that gold's fall may be nearly finished, while silver's is not. That implies a rising GOLD/SILVER RATIO, which suits us just fine. A higher ratio means that we get to swap our gold back into silver and go home with many more ounces than we began with. One thing I like about the gold/silver swapping strategy is that you don't have people talking about jumping off tall buildings when metals drop. Rather, they seize that as an opportunity to increase their ounces by swapping one metal for the other.

Presently the ratio is laboring to break above the 55:1 level. Once it does, it will jump and we will swap.

A word on terms: lots of loose speakers out there don't use words accurately. When I use "bull" or "bear" to describe a market, I don't mean a short phase that lasts 3 or 6 months, but the PRIMARY TREND that runs in the same general direction for 15 to 20 YEARS. Other folks can talk sloppy all they want, but when I use it word it means what I say.

Funny how looking at something from a different angle can entirely change your opinion. I looked at the weekly gold and silver charts today, and was surprised. But more of that later.

The lamebrains were at it again today. Headline ran that "faith in US economic data" had lifted stocks. Ahhh, now there are many things I believe in, seen and unseen, but one thing I do not believe in, and never will, and that's any data from the US government, especially economic data. Even if the diligent data-gatherers at their desks could gather enough accurate and meaningful data, the trimmers in charge would make them "adjust" the data so it gives the politically desired result.

I don't even have to grease up my Ridicule Machine for this one. It's ridiculous enough on its face.

STOCKS did rise today, 38/100th of 1% or 45.33 points to Dow 11,868.81. Wow-de-wow. S&P500 rose 0.32% (3.93 big points) to 1,215.75.

Where do they get the folks who write these headlines, from the US Treasury and Federal Reserve Joint Propaganda Working Group? Look at the 5 day chart. Tuesday the Dow waterfalled thru 11,950 support all the way down to 11,800. It is a market breaking down, like your 20 year old Yugo, burning oil and about to throw a rod.

Back in 2001 it appeared that the Dow would fall to 3,000 or 4,000. It still does.

US DOLLAR INDEX gave back 30.8 basis points (0.4%) to end at 80.281. In the same way that after a big meal you lean back in your arm chair and digest, so is the dollar index. It has gobbled down big gains, and now digesteth. The rally only needs to hold above 80 to remain alive and kicking.

Euro gained 0.22 today to 1.3015 -- as packed with meaning as a 1960s rock song. Twill drop further. Yen gained 0.21% to 128.38c/Y100 (Y77.89/$1), changing nothing.


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.