Thursday, December 08, 2011

The Silver and Gold Price Dropped, I Bought Silver and Gold Today

Gold Price Close Today : 1709.80
Change : (31.10) or -1.8%

Silver Price Close Today : 3146.7
Change : 108.8 cents or -3.3%

Gold Silver Ratio Today : 54.336
Change : 0.861 or 1.6%

Silver Gold Ratio Today : 0.01840
Change : -0.000296 or -1.6%

Platinum Price Close Today : 1493.50
Change : -29.50 or -1.9%

Palladium Price Close Today : 672.45
Change : -8.60 or -1.3%

S&P 500 : 1,234.35
Change : -26.66 or -2.1%

Dow In GOLD$ : $145.05
Change : $ 0.25 or 0.2%

Dow in GOLD oz : 7.017
Change : 0.012 or 0.2%

Dow in SILVER oz : 381.28
Change : 6.64 or 1.8%

Dow Industrial : 11,997.70
Change : -198.67 or -1.6%

US Dollar Index : 78.83
Change : 0.341 or 0.4%

The GOLD PRICE dropped $31.10 (1.8%), all the way down to the 50 dma ($1,708) but HARK! BEHOLD! It broke not support at $1,700-$1,705. Yes, that means something. It means that it fell from one side of the narrow nose-cone it has traded into, to the other side. Triangle has NOT YET resolved with either an upside or a downside breakout. Stepping away from the chart a little more, that means that the uptrend line in force since the end-September low at $1,535 remains in force.

Here I am out on that limb, once again. I bought gold today.

The SILVER PRICE fell 108.8c, to 3146.7c, down a meaty 3.3%. It pierced the uptrend line by a little, fell as low as 31.42c. This is not yet a downside breakout. It stands on the line, but not yet. I may get my head handed to me on a platter, but I bought more today.

Think: silver has been bumping up against its 300 day moving average (3377c). Maybe this is just the back up for a running start at that line.

If is am wrong, the market tomorrow will gainsay me loudly and finally, fall maybe to 2950c. If I am right, this point offers a spectacular buy.

Euro Central bank did something, but not what anybody wanted. Instead of announcing it would start buying all those sovereign bonds nobody else wants, it announces it was reducing bank reserve requirements 50%, from 2% to 1%, and loosening collateral requirements for loans from the ECB. Also, the bank cut its benchmark interest rate by 1/4%, back to its all-time low of 1%.

Well, great. This does nothing to solve the long term government and bank solvency riddles. Stock markets greeted this good news by dropping thru the trap door in the floor. Euro fell, dollar rose, silver and gold dropped, too.

Confirming for the nonce my interpretation that 12,200 caps the Dow, it fell 198.67 (1.63%) to close at 11,997.70. Owch, bad juju for investor morale to close below 12,000. S&P500 dropped a massive 2.11% (26.66 points) to 1,234.35.

Looks to me like it completed a topping formation from Friday through Thursday, and broke down today. Expect lower prices.

US DOLLAR INDEX rose 34.1 basis points (0.44%) leaving behind a five day chart that bottomed at 78.2 and 78.1. Hit 79. Will go higher. Euro fell off 0.5% to 1.3349, so the ECB's inflationary program helped not at all. Yen flattened at 128.74c /Y100 (Y77.68/$1), down 0.02%.

We see again that markets are not always logical. The ECB announces it will inflate beaucoup more, and silver and gold drop. Right. Maybe on the scale was tipping away a finger of the Nice Government Men? Not question that this brings good news to gold and silver for the long term. Bad news for the rest of the world, but good for metals.

Yesterday Jamie Dimon, CEO of JP Morgan Chase, at a conference sponsored by public-spirited Goldman Sachs, said, "Acting like everyone who's successful is bad and that everyone who is rich is bad -- I just don't get it."

Well, Jamie, mayhap I can 'splain it to you. You complained as if you EARNED your wealth by your extraordinary genius and hard work, and thus stacked penny by penny your estimated $231 mn to $3 bn fortune, along with that $17 mn stock and option bonus you were paid in 2009.

But Jamie, Jamie, some of us slackers remember where you came from. No, you weren't born in Hell's Kitchen, but you did graduate from Harvard Business School. And boy! Did your hard studying pay off. You were so valuable at that point, just getting out of school with no experience, that your father, executive VP at American Express, put in a good word for you with Sandy Weill, then CEO of Amex. And he hired you upon graduation to start at the bottom? Scouring toilets in the Amex headquarters? Sorting packages in the mail room? Licking envelopes with the little people? Well, not exactly, Jamie. Maybe, just maybe, it's been possible for you to jump higher than all those envious slackers because you started higher than them, by 40 or 50 floors. And maybe, just maybe, you have waxed so rich not from genius and hard work, but because your cronies have boosted you along the way.

And while I would be the very last person in the entire universe, known or unknown, ever to say that "rich is bad", I wonder who in God's creation really NEEDS $231 mn to $3 bn, or who really is WORTH $17 mn in bonuses to any company anywhere anytime.

Jamie, I have to say that the slackers look at you and they don't say, "Rich is bad," they say, "Look at the arrogant crony capitalist, who has gotten fat on his connections, family, business and government. How, exactly, does he differ from a tape or pinworm?"

But don't pay 'em no mind, Jamie. We all know how envious those slackers are. Let them eat cake.


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.