Thursday, December 01, 2011

Gold Price Closed Today at 1,735.30, Down -0.6%

Gold Price Close Today : 1,735.30
Change : -10.20 or -0.6%

Silver Price Close Today : 32.69
Change : -.04 or -0.1%

Platinum Price Close Today : 1,556.20
Change : -3.60 or -0.2%

Palladium Price Close Today : 627.65
Change : 17.65 or 2.8%

Gold Silver Ratio Today : 53.08
Change : -0.25 or 1.00%

Dow Industrial : 12,045.68
Change : 490.05 or 4.1%

US Dollar Index : 78.36
Change : -0.62 or -0.8%

Today's $10.20 loss in the GOLD PRICE (0.6%) to $1,735.30 at Comex close saith little. The genuinely critical level is $1,720 - $1,725, and with a low at $1,733.66 gold came nowhere near that. It did, however, beat twice on the door of $1,750 with a high of $1,753.94.

Once the GOLD PRICE breaks through $1,750 -- assuming it falleth not below $1,725 -- gold will quickly jump higher, first to $1,775 then to the Big Test at $1,800.

Looking at the longer term chart, gold has outlined a RISING trading channel, with a series of higher lows and higher highs.

Yesterday GOLD slammed slap against an internal trend line in that uptrend channel. Should it cross that line at $1,750, then it faces lateral resistance at $1,775 and $1,800, BUT THE CHANNEL'S UPPER BOUNDARY LIES AT $1,875 TODAY. Down below the channe3l boundary lies at $1,680.

We have come to the point where waiting for lower prices makes less and less sense. A close above $1775-$1,800 will rob that strategy of all sense.

The SILVER PRICE looks different. She has traded out into a great even-sided triangle, way out into the nose, and yesterday hit the upper boundary (the descending line). Today she backed off in a predictable little reaction after a long one-day rise. Silver dropped 3.6c to 3269.5c, but the high was 3340c, low only 3245c.

SILVER always forces us to bite our nails, that's her way. On the five day chart she has established support at 3250c, but the issue will be settled at 3400c. If silver fails there, then it will fall back. If it passes that barrier, then 3800c marks the channel top, 3683c the 200 dma. Right now the SILVER PRICE is struggling to pierce its 300 day moving average. It will be a very good sign if she accomplishes that tomorrow.

Yesterday I left out the detail that China, too, climbed aboard the Great Ship Inflation by lowering bank reserve requirements. All and sundry, East and West, still believe a lie and strong delusion, namely, that printing money will somehow fix the problem that printing money caused.

And for your titillation, amusement, and satisfying vindication of the truth, I offer the following figures on PREVIOUS Federal Reserve swap initiatives, such as the one they announced yesterday to bail out Europe. I have given below the date of the initiative, the Dow on that date, the number of days later the next Dow reading was taken, and the LOSS by that date. Forget not, neither overlook ye, that in every single case the Dow INITIALLY rose strongly, then shortly began falling again. Wow, it's almost as if the stupid swap initiative actually DROVE STOCKS DOWN.

12 Dec 2007, Dow 13,473, 41 days later down 11%.

18 Sept 2008, Dow 10,605, 22 days later down 20%

13 Oct 2008, Dow 9,387, 14 days later down 13%, and, learning nothing from experience, in two weeks the Fed tried it again, as follows:

27 Oct 2008, Dow 8,175, 24 days later down 8%.

Them's the numbers, folks, and I hope y'all get the message: the Fed is NOT coming to save you, and all their fancy moves are just so much feckless shuffling on their way over the cliff.

But watch out as the mad-man goes screaming over the brink: he is grabbing everyone to drag them over with him. Miss not this point: by yesterday's action the Federal Reserve made itself Lender of Last Resort to Europe and the world. SOMEbody called the Germans' hand and told Ben the Bernancubus to print a-pace.

In a paroxysm of Double-Speak, Dallas Federal Reserve President Richard Fisher said, "We are not bailing out . . . Europe. We are trying to meet a shortage of dollars." Right, right, and "the check is in the mail," too, etc., and all those other mighty uncandid and disingenuous protests to the contrary. They did what they did, and the thing speaks for itself. Don't try to play Adam on us and re-name the giraffe a hippopotamus. It's a giraffe -- see the 12 foot neck?

All right, enough of this fun! Point for y'all to take home is NOBODY IS GOING TO SAVE YOU. Every government in the world and every central bank is working together and employing the same failed and unworkable strategy: print more money. 'Twill not work. Has reached the limits of its historical epoch. 'Tis dead as a dodo, but if you act not to protect yourself, 'twill suck you down the drain with it.

Only three ways to protect yourself: silver, gold, and productive assets: farms, businesses, all enterprises that produce an ongoing and recession-proof stream of income. Or you can sit there waiting for the Fed's cavalry to come save you, until you turn green with slime.

After yesterday's binge, stocks took a day off to rest. Dow dropped 25.65 (0.21%) to 12,020.03. S&P 500 dropped 2.37 (0.19%) to 1,244.59. I'll be interested to see how low the Fed's swap initiative drives the stock market this time around.

The US Dollar index lost only 7.5 basis points today (0.1%), indicating that somewhat less than 100% of the world believes the swap initiative will in fact cut any knots. Dollar has re-established support at 78 - 78.10, so as long as it holds on there a rally may remain in its future. Considering how well these Fed magic tricks usually work, that rally is most likely.

Like a drunk who TRIES to rally and stand up off the bar floor, the Euro tried yesterday, but didn't do much more than lift up on an elbow. Today at 1.3469, up 0.21%, still way below the 20 day and 50 day moving averages. Could rally to 1.3800, provided its gets a spinal column transplant.

Yen also jumped yesterday, but was docile, calm, and beaten back 0.19% today to 128.68c/Y100 (Y77.71=$1). Momentum is down.

My wife is taking me up to Nashville tonight to hear Gillian Welch. If I'm REALLY good she'll take me to the Krystal and buy me some fries.

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.