Friday, December 30, 2011

The Gold Price Rose 9.2% in 2011 Bull Market in Gold and Silver Has Not Ended

Gold Price Close Today : 1,565.80
Gold Price Close 23-Dec : 1,604.70
Change Day: -38.90 or -2.4%
Change Year: 144.70 or 9.2%

Silver Price Close Today : 2787.5
Silver Price Close 23-Dec : 2904.6
Change Day: -117.10 or -4.0%
Change Year: -303.5 or -10.9%

Gold Silver Ratio Today : 56.172
Gold Silver Ratio 23-Dec : 55.247
Change Day: 0.93 or 1.7%
Change Year: 10.197 or 18.2%

Silver Gold Ratio : 0.01780
Silver Gold Ratio 23-Dec : 0.01810
Change Day: -0.00030 or -1.6%
Change Year: -0.00395 or -22.2%

Dow in Gold Dollars : $ 161.30
Dow in Gold Dollars 23-Dec : $ 158.37
Change Day: $ 2.93 or 1.8%
Change Year: $-7.05 or -4.4%

Dow in Gold Ounces : 7.803
Dow in Gold Ounces 23-Dec : 7.661
Change Day: 0.14 or 1.8%
Change Year: -0.341 or -4.4%

Dow in Silver Ounces : 438.30
Dow in Silver Ounces 23-Dec : 423.26
Change Day: 15.04 or 3.6%
Change Year: 63.88 or 14.6%

Dow Industrial : 12,217.56
Dow Industrial 23-Dec : 12,294.00
Change Day: -76.44 or -0.6%
Change Year: 644.14 or 5.3%

S&P 500 : 1,257.60
S&P 500 23-Dec : 1,265.33
Change Day: -7.73 or -0.6%
Change Year: 0.08 or 0.0%

US Dollar Index : 80.205
US Dollar Index 23-Dec : 79.999
Change Day: 0.206 or 0.3%
Change Year: 1.032 or 1.3%

Platinum Price Close Today : 1,393.30
Platinum Price Close 23-Dec : 1,424.10
Change : -30.80 or -2.2%

Palladium Price Close Today : 649.50
Palladium Price Close 23-Dec : 662.60
Change : -13.10 or -2.0%

Gold Price Performance Percentage Annual Change for the Past 10 Years

Silver Price Performance Percentage Annual Change for the Past 10 Years

*These tables are both available on the front page of and update daily

The GOLD PRICE and SILVER PRICE staged a rally today all out of proportion to the US dollar's meager drop. Gold gained $25.90 to close Comex at $1,565.80 while silver added 60.1c to close 2787.5c.

Sure, maybe that jump arose out of folks closing out short position before the long weekend, but maybe not. Remember that silver closed higher yesterday while the GOLD PRICE fell. It's way to early to say definitively, but we may have seen gold's bottom at $1,522 (intraday) yesterday. Silver might continue to struggle.

For the new year, silver and gold may move sideways in frustration until mid-February, or at worst, late May. I'm basing this on their behaviour when they previously crossed below their 300 and 200 DMAs in correction.

This much I am sure of. Unless the European bank solvency crisis breaks out into a delirium and frenzy (daily a possibility), I was wrong to wax so bearish on metals at mid-December. We will NOT see huge drops in silver and gold unless a financial panic breaks out in Europe. But panic or not, silver and gold will be higher this time next year than they are now, because THEIR BULL MARKET IS NOT OVER. Look at 10 year charts of silver or gold to prove it to yourself. And neither in price nor in time have they fulfilled their bull market promise yet.

What would signal trouble? SILVER PRICE breaking below 2600c and gold below $1,500. Only way I know to deal with this is to buy and keep on buying as they step down, or if they step down.

For this special year end edition I have added two columns to show the end-2010 close and % change from 2010 to 2011. By the way, y'all print out a copy of today's commentary and keep it so you can calculate what your silver and gold portfolio was worth at end-2011.

Looking at the 2010-2011 results, this was not a year for commodities. Platinum and Palladium, down 26.9% and 23.5%, took the biggest hits this year, and silver lost 10.9%. Yet in the teeth of all that, gold rose 9.2%. Hmmmm.

The GOLD SILVER RATIO gained 18.2% in 2011, so we made the right move selling the ratio (swapping silver into gold) early last year. We have now come in the last two days to within a gnat's eyebrow of our 57.5 trigger point to swap back from GOLD into SILVER, but market has not hit that yet. If it ever comes, it ought to come very soon.

In the Potemkin economy, stocks finished the year blowing hot and cold out of both sides of their mouth. Dow gained 5.3%, but the Dow comprises only 30 giant stocks. The broader S&P500 gained -- nothing. Virtually identically flat, from 1,2547.52 to 1,257.60.

Nasdaq lost 1.8% for the year; Nasdaq 100 gained 2.7%, while the very, very broad Wilshire 5000 lost 1.3%. Banner year, huh?

'Twasn't really a year for the US dollar, either, which gained a meager 1.3%. However, the dollar is now rallying. If it can penetrate 80.50, it will run very hard in the first quarter for 83.50, maybe much higher (88.50).

One thing you must keep foremost in your mind: THE BULL MARKET IN SILVER and GOLD HAS NOT ENDED. It will run another three to ten years.

No harbinger flits above the horizon signaling that the economy will get better next year, or that governments and central banks have yet learned their lessons, namely, they cannot efficiently control the economy or the money supply, and that inflating the currency will not cure a depression caused by inflating the currency and government economic interference.

In other words, they are all dead as do-do birds, along with their system, but they refuse to recognize it, lie down, and die without torturing the rest of the world several more years. Eventually they will be abolished, but how many more tears and years will be needed?

Today the Dollar lost a meaningless 13.6 basis points (0.17%) to 80.361. It remains in its uptrend. However, the Japanese yen flashed out its sword and cut my head off. Just about the time I thought it was going nowhere, it jumped 0.96% to 130.06c/Y100 (Y76.89/$1). The yen has vaulted over its 20 day moving average (128.49) and its 50 DMA (129.08). Unless the yen backs off immediately, it has its eye on 131 or higher.

On 30 December 1861 the US government and banks stopped paying out gold for gold obligations. Not much new, is there? They've been cheating us for centuries, banks and governments.

God bless you all in 2012 and always!

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.