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Friday, July 29, 2011

The Gold Price Today Reached a New Intraday High as Well as a New Closing High

Gold Price Close Today : 1,628.30
Gold Price Close 22-Jul : 1,601.30
Change : 27.00 or 1.7%

Silver Price Close Today : 4009.2
Silver Price Close 22-Jul : 4011.3
Change : -2.10 or -0.1%

Gold Silver Ratio Today : 40.614
Gold Silver Ratio 22-Jul : 39.920
Change : 0.69 or 1.7%

Silver Gold Ratio : 0.02462
Silver Gold Ratio 22-Jul : 0.02505
Change : -0.00043 or -1.7%

Dow in Gold Dollars : $ 154.16
Dow in Gold Dollars 22-Jul : $ 163.71
Change : $ (9.54) or -5.8%

Dow in Gold Ounces : 7.458
Dow in Gold Ounces 22-Jul : 7.919
Change : -0.46 or -5.8%

Dow in Silver Ounces : 302.88
Dow in Silver Ounces 22-Jul : 316.14
Change : -13.25 or -4.2%

Dow Industrial : 12,143.24
Dow Industrial 22-Jul : 12,681.16
Change : -537.92 or -4.2%

S&P 500 : 1,292.28
S&P 500 22-Jul : 1,345.02
Change : -52.74 or -3.9%

US Dollar Index : 73.868
US Dollar Index 22-Jul : 74.224
Change : -0.356 or -0.5%

Platinum Price Close Today : 1,778.10
Platinum Price Close 22-Jul : 1,795.40
Change : -17.30 or -1.0%

Palladium Price Close Today : 826.10
Palladium Price Close 22-Jul : 806.95
Change : 19.15 or 2.4%


I got home a bit earlier than expected, so have an opportunity to send y'all a commentary.

Behold the scoreboard! The GOLD PRICE moved to new resistance area, the SILVER PRICE held on, Stocks down 4.2%, platinum lost a little, palladium jumped 2.4%.

The GOLD PRICE today reached a new intraday high as well as a new closing high. When New York opened today the gold price was wallowing at $1,615, then launched like a rocket clean thru $1,625 resistance to $1,632.45. My $1,625 target has now been reached -- let's see if gold can reach $1,670, too. Comex closed up $14.90 at $1,628.30.

Not clear to me, after last week's performance, that gold is being driven by the US debt ceiling farce or not. Certainly, that is contributing to gold's ebullience, but last week when the Euros "solved" Greece's crisis with a bailout, gold fell the first day and completely recovered the next. More than fear is driving gold, but more what?

Debt ceiling limit day falls on 2 August, so it will be interesting to see what happens. That is hanging over the gold market like a cloud, and when it is removed gold will react one way or the other. Everybody expects it to drop, so maybe gold will oblige by rising. No sure thing here, EXCEPT that over the next 3 - 10 years gold will move higher.

The SILVER PRICE gained nothing this week, but that doesn't quite tell the whole story. It performed well up until Wednesday and Thursday, when it staged a usual correction. Today it regained most of that loss, but 4100c remains as solid resistance. Comex silver closed at 4009.2, up 31.3c.

Are we watching silver assume more monetary allure? Rather than falling away from gold as it responds to financial crisis, it has been rising. That shift has been taking place throughout the precious metals bull market, but is it speeding up?

Anyone with two brain cells left to rub together would be anxious about recommending silver and gold here, staring at a financial crisis deadline in four days, because all their recent strength MAY have arisen out of that fear. Possible certainly they will make another plunge downward before launching a lasting rally. STILL and ALL, silver is proving itself more resilient. If gold is higher or steady the second day after a debt ceiling is announced, it will extend its rally MUCH further before stopping, and take silver thru 5000c.

Stocks fainted badly toward end of the week. Dow today closed 12,143.24, down 96.87 or 0.8% and the S&P500 fell below 1,300 to 1,292.28, down 8.39 or .65%. What meaneth this fall? It crashed through 12,300 support, which was also below the last low and nears 12,000 support. Momentum headed earthward as Dow stands below 20 dma (12,512) and 50 DMA (12,321). Looking sick, and if 12,000 holdeth not, greet 11,875, then 11,555.00

Stocks: the broken tooth in your Inventory of Investment Dental Health.

By the way, NEVER forget this: the Keynesian notion that government spending and borrowing can bring prosperity, and that government can or should run the economy, is the most pernicious political idea in the modern world. Until that doctrine, which the Federal Reserve and yankee government follow mindlessly, is destroyed, there is no economic hope for the United States.

USA TODAY, which is the richest source of outright stupidity and perverse misinformation in our corner of the Milky Way Galaxy, and is written at a 4th grade level as well, PERFECTLY encapsulated in one meager paragraph all the wrong thinking that is killing the American economy today. It's really not often that stupidity reaches the Olympian level, but here it is:

"All things being equal, lower [government]spending translates into slower economic growth, since it means cuts in payments to contractors, layoffs of government employees, and smaller entitlement checks. Already in 2011, softer government spending has sapped growth."

Get this straight: all government spending curbs economic growth. All of it. Government produces nothing, therefore must take all its money from producers by taxation or inflation. Government spending misdirects resources, so is worse than merely setting a match to the bills. It actively MALinvests resources and wastes them. Third, government spending starves genuine entrepreneurs and producers for capital. I have another 874 points here, but that will do for starters.

With that bone out of my throat, I will continue.

US DOLLAR INDEX fell 35.4 basis points today, after climbing above 74 yesterday. Now treading at 73.868, down but not hurting. How dare I say that? the 5 day chart shows a sudden drop and bottom on Tuesday and Wednesday, like a spike or island reversal (but not exactly). Of that bottom the buck launched from 73.4 to 74.4, and remember that 74.5 was the last low and so support. Dollar bottoms slowly, and that's what this looks like. Close next week above 20 DMA (74.75) and 50 DMA (74.81) argues dollar is headed for higher latitudes.

Euro spiked up this week, but failed after a one day gap-up rally. Now fidgeting around with its 50 and 20 DMAs. Has failed to break thru resistance.

Yen today reached a higher high than the earthquake brought on in March, 130.17c/Y100 (Y76.82/$) today against 128.79 (77.64) then. Expect the Nice Government Men who work for treasury and Bank of Japan to counterattack next week to drive the yen down. Japanese export-driven economy (in their Keynesian thinking) can't afford a high yen.


Y'all enjoy your weekend.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.

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 outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.



Thursday, July 28, 2011

Gold Price Closed Today at 1,613.40

Gold Price Close Today : 1,613.40
Change : -1.60 or -0.1%

Silver Price Close Today : 39.77
Change : -.77 or -1.9%

Platinum Price Close Today : 1,792.40
Change : -14.50 or -0.8%

Palladium Price Close Today : 827.10
Change : -5.10 or -0.6%

Gold Silver Ratio Today : 40.57
Change : 0.74 or 1.02%

Dow Industrial : 12,240.11
Change : -62.44 or -0.5%

US Dollar Index : 74.12
Change : 0.60 or 0.8%

Franklin Sanders will not be publishing commentary today.



Wednesday, July 27, 2011

The Gold Price Today Hit a New Intraday High of $1,628.55

Gold Price Close Today : 1615.10
Change : (1.70) or -0.1%

Silver Price Close Today : 40.553
Change : (0.138) or -0.3%

Gold Silver Ratio Today : 39.83
Change : 0.093 or 0.2%

Silver Gold Ratio Today : 0.02511
Change : -0.000059 or -0.2%

Platinum Price Close Today : 1789.50
Change : -15.00 or -0.8%

Palladium Price Close Today : 826.05
Change : -12.60 or -1.5%

S&P 500 : 1,331.94
Change : -5.49 or -0.4%

Dow In GOLD$ : $160.01
Change : $ (0.99) or -0.6%

Dow in GOLD oz : 7.740
Change : -0.048 or -0.6%

Dow in SILVER oz : 308.27
Change : -1.20 or -0.4%

Dow Industrial : 12,501.30
Change : -91.50 or -0.7%

US Dollar Index : 73.53
Change : -0.537 or -0.7%

Tomorrow and Friday I will be travelling so will not post any commentaries. However, I will return on Monday, God willing.

Sometimes it's not the BIG things that bother you, but the concatenation of little things. Like working outside and noticing more and more flies, then a little whiff of corruption on the air. Buzzards cruising overhead. Next thing you know, you discover a body.

So today. Here is the pile of stuff insignificant in each item perhaps, but together adding a strange smell to the air:

…wholesale discount on US 90% coin jumped yesterday a nickel and today another nickel, from minus 120 cents to minus 130c in a day. That premium is VERY sensitive to the mood in the silver market. When the discount lessens, the market is looking up. When the discount grows, trouble may be brewing.

…Yesterday platinum and palladium made great leaps ($24.30 and $31.70) but today disgorged much of those gains (-15 and -12.60). Not helpful.

. . . Gold and silver have both stalled. May be only a routine 2-3 day correction, or . . .

. . . Debt ceiling expiry looms, so that's getting closer and closer to resolution, and when 'tis resolved, will rob the metals of that driver.

. . . US dollar bounded up of the trampoline of a new low yesterday (73.527, down 0.537) to recapture all of that loss and then some, gaining 59.3 basis points to 74.067. Chart looks like a sort of spike bottom. Whether a feint or not, if dollar can stay above 74, it's fall has ended.

Euro disappointed all its cheerleaders today by falling back to fill yesterday's gap up and nearing its 50 dma (1.4315). Unless the euro can better yesterday's 1.4526 high, 'tis safe to assume it met the downtrend line's resistance and failed. Yen remains near earthquake highs, closing today at 128.23c per Y100 (Y77.98/$).

As I am blind to the charms of ballet, so I am blind to the seduction of stocks. What do they have that other people see? Today the Dow obliged all its fans by falling 198.75 points (1.59%) to 12,302.55, once again at critical 12,300 support. It's below its 20 dma (12,527) and now its 50dma (12,334). The MACD and RSI have turned firmly down. Dear friends, none of this points upward.

As the Sirens were to Ulysses, so are stocks to today's investors, but unhappily they have not stopped their ears or lashed themselves to the mast.

The GOLD PRICE today hit a new intraday high of $1,628.55 (I told y'all you'd see $1,625) but fell off of that to $1,609.78. Closed Comex at $1,615.10, down $1.70. Technically I recognize that gold made the first half of a key reversal today (new high with lower close), but that must be completed with a lower close again tomorrow.

GOLD must remain above $1,605 or turn down. In spite of all the flies buzzing around my head, I believe this is no more than a short correction and that the uptrend will gain yet more before 2 August when the world ends. Well, when all the Chicken Littles who believe we can't feed ourselves or blow our noses without Government Intervention expect the world to end. I don't, and even if it does, I'm old enough and mean enough to buy me a tin bill and make a living pecking with the chickens.

SILVER is in that same boat with GOLD, posting first half of a key reversal today, new high at 4142c but lower close, down 13.8c at 4055.3c. No omen unless silver closes lower than 4055.3c tomorrow. 4100c proving tougher to penetrate than I expected. Remember that if silver does hold on here, virtually no resistance lies between 4100c and 4980.

I'm holding my breath, but expecting higher SILVER PRICES tomorrow. If silver faints, 3900c is critical must hold line.

On 27 July 1694 the Bank of England received its royal charter and began drinking the nation's blood. Within two years a run on the bank had developed. In 50 years or so the bank owned a public debt in the amount (as I remember) of nearly 50 million pounds sterling, about 11.8 million ounces of gold. Understand that debt as an advance claim on the nation's production -- FOREVER. And of course, our own Federal Reserve keeps up the healthful tradition of the Old Lady of Threadneedle street.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.

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 outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.



Tuesday, July 26, 2011

The Gold Price Keeps on Ratcheting Up Day by Day

Gold Price Close Today : 1616.80
Change : 4.60 or 0.3%

Silver Price Close Today : 40.691
Change : 0.337 or 0.8%

Gold Silver Ratio Today : 39.73
Change : -0.218 or -0.5%

Silver Gold Ratio Today : 0.02517
Change : 0.000137 or 0.5%

Platinum Price Close Today : 1804.90
Change : 14.30 or 0.8%

Palladium Price Close Today : 838.65
Change : 31.70 or 3.9%

S&P 500 : 1,331.94
Change : -5.49 or -0.4%

Dow In GOLD$ : $159.84
Change : $ (1.61) or -1.0%

Dow in GOLD oz : 7.732
Change : -0.078 or -1.0%

Dow in SILVER oz : 307.23
Change : -4.83 or -1.5%

Dow Industrial : 12,501.30
Change : -91.50 or -0.7%

US Dollar Index : 73.53
Change : -0.537 or -0.7%

Sorry I missed y'all yesterday. I was finishing my monthly Moneychanger newsletter. Paid subscribers can log in at www.the-moneychanger.com for the electronic version.

Ever seen someone who will stand and argue with a road sign? I know somebody like that, and standing in the way of gold and silver right now is precisely standing and arguing with a road sign.

The GOLD PRICE keeps on ratcheting up day by day. Now $1,620 is the barrier (high today was $1,620.10), and $1,607 has become support.

The GOLD PRICE will probably hit $1,650 before this stops. Already it is overbought, but can grow more so. Comex gold gained $4.60 to $1,616.80.

The SILVER PRICE keeps advancing, too. Comex closing found silver up 33.7c at 4069.1c. 4100c is now the Great Blockade. Silver's high today came at 4095c. It is tugging at the leash. It will break through 4100c and run farther still.

The SILVER PRICE has the bit in its teeth and will keep on running. Don't get caught short silver here.

Since the US dollar index broke thru its uptrend line, it surprises no one that it fell 53.7 basis points today to 73.527. This trashed support at 74 and sets the buck on the skids for 72.70 before it begins rallying. Today took it below the 20 DMA (74.89) and back to the last low. More downside coming.

Euro today gapped up from below 1.4400 to 1.4511, up 0.95%. That might be a breakout over the downtrend line and lead to 1.4700 to 1.4950. What? It makes no economic sense! Why, who are you to talk about economic sense in a system set up by Salvador Dali?

Yen also continues to climb. Today it's at 128.35c/Y100 (Y77.91/$), almost back to the 128.79 earthquake peak in March.

You know, hard as it is to fathom, it may be that the world actually believes that something will happen if the debt ceiling isn't lifted. Mercy -- they can't be that gullible, can they? Surely they know that debt ceiling will be lifted -- don't they?

STOCKS are tumbling against gold, and not doing too killing well against the dollar. Dow today closed at 12,501.30, down 91.5 and the S&P at 1,331.94, down 5.49.

Dow today fell below its 20 dma (12,521) first warning of a downturn. I keep reading technicians I respect talking about another leg up in stocks, but it's not materializing.

Hold on to your stocks. They're your anchor to poverty.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.

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 outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.



Friday, July 22, 2011

The Gold Price has Traced Out a Giant W on its Chart, With a Double Bottom at Roughly $1,580 - $1,585

Gold Price Close Today : 1,601.30
Gold Price Close 15-Jul : 1,589.80
Change : 11.50 or 0.7%

Silver Price Close Today : 4011.3
Silver Price Close 15-Jul : 3906.3
Change : 105.00 or 2.7%

Gold Silver Ratio Today : 39.920
Gold Silver Ratio 15-Jul : 40.698
Change : -0.78 or -1.9%

Silver Gold Ratio : 0.02505
Silver Gold Ratio 15-Jul : 0.02457
Change : 0.00048 or 2.0%

Dow in Gold Dollars : $ 163.71
Dow in Gold Dollars 15-Jul : $ 162.25
Change : $ 1.45 or 0.9%

Dow in Gold Ounces : 7.919
Dow in Gold Ounces 15-Jul : 7.849
Change : 0.07 or 0.9%

Dow in Silver Ounces : 316.14
Dow in Silver Ounces 15-Jul : 319.44
Change : -3.30 or -1.0%

Dow Industrial : 12,681.16
Dow Industrial 15-Jul : 12,478.21
Change : 202.95 or 1.6%

S&P 500 : 1,345.02
S&P 500 15-Jul : 1,315.79
Change : 29.23 or 2.2%

US Dollar Index : 74.224
US Dollar Index 15-Jul : 75.140
Change : -0.916 or -1.2%

Platinum Price Close Today : 1,795.40
Platinum Price Close 15-Jul : 1,760.30
Change : 35.10 or 2.0%

Palladium Price Close Today : 806.95
Palladium Price Close 15-Jul : 782.35
Change : 24.60 or 3.1%


Let numbers speak, not opinions, ratiocinations, and interpretations. Through all the up and down, silver and gold held their ground gained this week. Stocks added a little, while the dollar fell. Platinum gained 2% and palladium with +3.1% was the big gainer for the week.

Now come the opinions, ratiocination, interpretations, and wild guesses.

Tuesday, Wednesday, Thursday, and today the GOLD PRICE has traced out a giant W on its chart, with a double bottom at roughly $1,580 - $1,585. If anybody still thought he could parse this market, he was handed his head again today. After the European bail out was announced, the GOLD PRICE fell to $1,585. Pressure of Greek default removed, bailout arranged ought to have eased demand for gold, right? Wrong. Came roaring back today, up $14.50 to $1,601.30 on Comex and an intraday high at $1,607.

What else can you say but, "The GOLD PRICE will move higher next week." It will break through $1,607 and keep on going, since it refused to break down when the euro deal was announced.

Here's an intriguing tidbit. Soon there will be no gold coins that sell for less than $100. There's the Mexican two pesos (0.0482 oz) for about $78 and the Mex 2-1/2 pesos (0.0603) for $97. If they were available, the old US $1 gold pieces (0.048375) would cost about $78. When that $1.00 gold piece reaches $100, that is, 1/100th of the paper dollar's 1913 value, gold will stand at $2,067.18, a mere 29% above its present value.

Silver's spike bottom on Wednesday marked the beginning of another uptrend, or at least yesterday's and today's lows were higher than Wednesday. The SILVER PRICE was stymied by 4025c today, but refused to sink lower than 3889c. Comex gained a staggering 117.6c to close Comex at 4011.3c, over 4000c again.

Standing in the way is resistance just under 4100c. Once the SILVER PRICE crosses that, y'all must bear in mind, virtually no resistance appears before the last high at 4982c. Meanwhile the 20 DMA (3682c) crossed above the 50 DMA (3633c) and other momentum indicators have turned up. I have to conclude the SILVER PRICE will move higher next week.

Yes, I know it's all out of season and unexpected, but even against the tide of "good" news out of Europe, silver and gold are determined to rise. Don't stand in their way, they'll bruise you.

The intraday Dow high at 12,754 was matched almost exactly by yesterday's 12,751. Either that marked a double top whence the Dow will fall, or it is merely pausing in a new rally.

Favoring a rally is the Dow's position above its 50 and 20 DMAs (12,343 and 12,465). Also the 20 DMA crossed above the 20 a week ago, turning the momentum up. So it can rise further still.

Stocks were confused today. Dow fell 43.25 to 12,681.16 while the S&P500 rose 1.22. Last two days action on the daily chart is rolling over floorward.

I've been over and over stocks in my mind, and I just can't get around the gigantic facts. In inflation adjusted terms, stocks have lost since 2000. In silver and gold terms, they've lost more than 80%, with another 80% to go. I know there must be some reason that people want to own stocks, I simply cannot imagine what it might be.

Stocks remain the Vanishing Creame in the Investment Make-up Cabinet. Rub it in, your capital vanishes.

Sobriety bit today after yesterday's drunken enthusiasm over the Greek bail-out deal -- maybe I ought to call that a "deal-ette", since it ain't much of a deal -- and the US dollar index rose 20.9 basis points to 74.224, up 0.27%. Doesn't help the technical damage dollar did yesterday by falling through the uptrend line from May. Only question now is which previous bottom will catch the dollar, 74.11, 73.50, or 72.70? Yesterday's goose carried the euro only to the downtrend line, not thru, and today it gave a chunk of that back. Closed 1.4372, down 0.37%. Remains barely above 50 and 20 DMAs, which are paralleling each other (1.4301 and 1.4273). Euro remains locked in a downtrend, in spite of all the help the Nice Government Men and Benevolent Central Bankers have given it.

Japanese yen broke out upwards two weeks ago and at yesterday's high of Y78.22/$ (127.85c/Y100) threatens the earthquake high at 128.79. BoJ NGM must be having three hissy fits.

O, black day! On 22 July 1944 the Bretton Woods (New Hampshire) Conference created the International Monetary Fund and the post war monetary arrangements with the dollar only fixed to gold and every other currency fixed to the dollar. For the US economy it was a one way ticket to hell, because it guaranteed that US manufacturers were subjected to rising costs and lower prices thru domestic inflation, while their international competitors exporting to America had falling costs and rising prices by receiving gold-convertible dollars. Great idea, Nice Government Geniuses. Any wonder American industry dwindled over the next 30 years?

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.



Thursday, July 21, 2011

More Technical Evidence the Gold Price Will Move Lower

Gold Price Close Today : 1586.80
Change : (9.90) or -0.6%

Silver Price Close Today : 38.937
Change : (0.609) or -1.5%

Gold Silver Ratio Today : 40.75
Change : 0.377 or 0.9%

Silver Gold Ratio Today : 0.02454
Change : -0.000229 or -0.9%

Platinum Price Close Today : 1784.10
Change : 9.30 or 0.5%

Palladium Price Close Today : 806.50
Change : 12.70 or 1.6%

S&P 500 : 1,343.80
Change : 17.96 or 1.4%

Dow In GOLD$ : $165.77
Change : $ 3.02 or 1.9%

Dow in GOLD oz : 8.019
Change : 0.146 or 1.9%

Dow in SILVER oz : 326.79
Change : 8.89 or 2.8%

Dow Industrial : 12,724.41
Change : 152.50 or 1.2%

US Dollar Index : 74.04
Change : -0.750 or -1.0%

The GOLD PRICE took a jawbuster today and fell $9.90 to $1,586 at Comex close. We're right back where we were on Tuesday, only with more technical evidence the GOLD PRICE will move lower. Could stop at $1,560 support, or reach 50 DMA at $1,532 (or $1,540 support). Any close above $1,605 gainsays that and turns gold up like an express train.

Not sure yet what we are seeing, but one of two transmogrifications. First may be a small correction to the latest breakout that returns to somewhere near 50 DMA, then shoots again skyward. Second might be the last leg down of the correction that began end April. That makes the high Tuesday the top of a B-wave in an A-down, B-up, C-down correction, and we might see lower prices than we have yet, i.e., lower than $1,462.

Either way, I expect gold by 31 December to be trading higher than it is today.

Ahh, this catches the eye! The SILVER PRICE today did not fall nearly to its Tuesday or Wednesday lows (3850c and 3814c). On Comex it lost 60.9c to close at 3893.7c, but it plainly has rolled over and should move lower. Will 3800c stop it? I don't know. The SILVER PRICE stands in the same case as gold. If it dips below 3780, you have to reckon with 3350c again. A close above 4088c contradicts that.

Be patient. All this Greek-rescue and debt-ceiling theater will be over soon, and more ugly monetary realities will emerge, pushing both metals higher. The July rally in silver and gold vividly illustrate how nervous the world is. None of that will change or depart.

The EU is pulling an old trick for bailing out banks. setting up a special fund or agency to dumped all the bad paper into, then working it out over time. US government pulled the same trick with the early 1990s savings and loan crisis. They set up the Resolution Trust Corp. to manage the insolvent SandLs and sell off their pile of bad mortgages and property and ease the loss off onto the taxpayer a little at a time. Europeans call it the European Financial Stability Fund (EFSF), but it is the same "dump the slop into one bucket" strategy. ECB agreed to "maybe" accept Greek collateral if Greece defaults. In other words, they will.

So for the nonce, the crisis is papered over. Stock markets took that as good news -- they would have taken the atomic bombing of Paris as good news today. Dow rose 152.50 to 12,724.41 (+1.21%) and the S&P500 added 17.96 (1.35%) to 1,343.80.

Dow broke thru 12,600 on the open, in fact, to 12,750 and stalled there. Now the Dow has reached the point where it stalled before, so two roads are possible: it fails, and begins a long plunge. Or, it will clear the 12,750 level, move higher, complete a double top with the last high of 12,876, and THEN plunge.

Either way, stocks remain the eau de polecat in the Investment Parfumerie. Stay away, because once you get that stuff on you, you can't wash it off with lye soap.

Zut alors! The word about the EU fix must have leaked out early, because the dollar began falling from the NY open and never stopped till it neared 74. Traded sideways the rest of the day, then broke down to 73.80. Meanwhile the euro jumped to 1.4436, up 1.53%. Doesn't matter. Choosing between the dollar and the euro is like choosing off the salad bar in a hog sty, but I'd choose the dollar every time. Euro remains in its down trend, dollar broke down and will revisit 73.50 or 72.70. NGM will see to that.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.


- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.



Wednesday, July 20, 2011

If the Gold Price Does Drop Again, Buy all the Way Down to to $1560

Gold Price Close Today : 1596.70
Change : (4.20) or -0.3%

Silver Price Close Today : 39.546
Change : (0.665) or -1.7%

Gold Silver Ratio Today : 40.38
Change : 0.563 or 1.4%

Silver Gold Ratio Today : 0.02477
Change : -0.000350 or -1.4%

Platinum Price Close Today : 1774.80
Change : 7.00 or 0.4%

Palladium Price Close Today : 793.80
Change : 6.55 or 0.8%

S&P 500 : 1,325.84
Change : -0.89 or -0.1%

Dow In GOLD$ : $162.76
Change : $ 0.24 or 0.1%

Dow in GOLD oz : 7.874
Change : 0.012 or 0.1%

Dow in SILVER oz : 317.91
Change : 4.87 or 1.6%

Dow Industrial : 12,571.91
Change : -15.51 or -0.1%

US Dollar Index : 74.84
Change : -0.384 or -0.5%

The GOLD PRICE today bounced back from a firm bottom above $1,581, leaving behind a double bottom with yesterday. Gold reached 1602 but not until after Comex had closed up $4.20 a $1,596.70. Trading now around that $1,602.

If I were a big trader, I would want a flat position before that EU summit announcement, and wait to see how that played out before I went long or short. Governments are famous for surprise parties that wreck trading plans.

Nothing has changed, of course, or will change, so maybe we missed a buying opportunity yesterday. If the GOLD PRICE does drop again, buy all the way down to to $1,560. Something over $1,625 lies in the near future.

The SILVER PRICE, too, appears to have made a quick bottom yesterday, although it reached a lower low today at 3814c. I wouldn't swing over Grand Canyon using this for a rope, but my guess is that the silver price will rise tomorrow, announcement or not. Blocking silver's trajectory is 4000c, then 4075c. Underneath is support at 3800 and 3850c.

I'm going to be interested to observe how the SILVER PRICE acts at 4200c, about the only resistance between here and 4982c.

Gold/Silver ratio rose today to 40.376. The only chart I look at that gives me any expectation of lower silver and gold prices -- think one more big down leg to complete the correction from end-April highs -- is that gold/silver ratio chart. BICBW.

Y'all who did swaps from silver to gold at the lowest levels, say, below a spot ratio of 35, need to think about swapping back. To figure roughly your profit in ounces, divide today's ratio by the ratio the day you swapped. If today's ratio is 40.376 and you swapped at 32, then you could gain 40.376/32 = 1.26 or 26% in silver ounces swapping today. Better think about that, and don't get carried away by greed.

I promise to be a good boy and just grin like a natural born fool from Tennessee today and not say anything about the gawkingly incredible stupidities of central banks, the federal government, or the Twin Bees, Bernard and Ben, or other central banks and governments.

Unless, of course, I am provoked.

Whatever rocket fuel stocks were using yesterday played plumb out today. Stocks painted a raggedy, up and down chart but never managed to hold on to any gains and finished the day in the red. Dow lost 15.51 (0.12%) to close 12,571.91 and the S&P500 lost 0.86 (0.07%) to close at 1,325.84.

Stepping back from the 14 month chart a gagging impulse o'ertakes me screaming, "Broadening top!" This killer formation will drag every hopeful bull into the bear's lair and keep him their to be mauled at the bear's leisure. That doesn't mean that it will drop off right away like your car keys falling out of your shirt pocket into the lake when you lean over the side of the bass boat. Naww, it can linger on for some time, travelling up and down, then suddenly sink out of sight, leaving you staring down at the bottom of a well wondering how deep it might be.

Stocks -- they are the Arm Garter Factory in the Inventory of Modern Investment Choices.

US Dollar Index was beaten down as low as 74.755 today but that 74.80 support caught and held. Even though it dropped 38.4 basis points from yesterday (0.49%) it held on where it had to. Now if it keeps falling thru 74.80, then the dollar's frustrating uptrend will be broken. Euro rose a little today to 1.4230, up 0.52%. Yen rose about the same to Y78.76/$ (126.96c/Y100).

I reckon every market is holding its breath now, waiting for word from the EU summit over the sovereign debt crisis, and for word from Wimbledon -- no, no, make that Washington, I get confused about locations when we talk about playing games -- about raising the debt ceiling. That summit takes place tomorrow, but the fix may apply only to Greece. If that's all they accomplish, market won't move much in the aftermath and the euro will probably resume dropping, gold rising, stocks fainting. Remember, the big banks must be bailed out at all costs, if every Greek in the world has to slave for them forever. (I was provoked.)

On 20 July 1714 (New Style, 1 August old style) took effect in England the Riot Act. The act enabled local officials to order any group of more than 12 to disperse who were "unlawfully, riotously, and tumultuously assembled together" by reading a proclamation, hence our phrase that to put an end to someone's bad behaviour is to "read them the Riot Act." Those not dispersed within one hour were guilty of felony without benefit of clergy punishable by death. Benefit of clergy was a privilege whereby first time offenders could get lesser sentences for felonies. For violating the Riot Act, no such mitigation was allowed, so once you heard it read, you either ran or hanged.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.



Tuesday, July 19, 2011

The ONLY Strategy for a Bull Market is to Buy and Keep on Buying - The Trend is Your Friend

Gold Price Close Today : 1602.10
Change : 12.30 or 0.8%

Silver Price Close Today : 40.211
Change : (0.122) or -0.3%

Gold Silver Ratio Today : 39.84
Change : 0.425 or 1.1%

Silver Gold Ratio Today : 0.02510
Change : -0.000271 or -1.1%

Platinum Price Close Today : 1767.80
Change : -7.40 or -0.4%

Palladium Price Close Today : 787.25
Change : -8.50 or -1.1%

S&P 500 : 1,326.73
Change : 21.29 or 1.6%

Dow In GOLD$ : $162.41
Change : $ 1.39 or 0.9%

Dow in GOLD oz : 7.857
Change : 0.067 or 0.9%

Dow in SILVER oz : 313.03
Change : 5.96 or 1.9%

Dow Industrial : 12,587.42
Change : 202.26 or 1.6%

US Dollar Index : 75.16
Change : -0.327 or -0.4%

The proverb says, "A cobbler should stick to his last." The "last" is the form a cobbler makes shoes on, so it means that you should stick to what you do best and most profitably..

In the last 2-1/2 months I have been steadily whipped in trying to find a bottom in silver and gold's reaction off their end-April highs. They simply have not unfolded as I expected. Problem is, trying to get a little better price for people, I have told some to hold off for those better prices, just in time to watch silver and gold skyrocket.

In a bull market, waiting to buy is almost always -- with few exceptions -- a mistake Your shoemaker's last is identifying and aligning yourself with the primary trend that will last 15 - 20 years. Your last is not trying to scalp out silver and gold at the correction's plumb bottom. If you buy and it drops 10%, it won't matter in the long run for the market will double, triple or quadruple. The trend will bail out your worst timing mistakes.

So don't ever expect to hear me say "Wait to buy" again. I'll tell you what I think the market is doing, but y'all need to remember that the ONLY strategy for a bull market is to buy and keep on buying. The trend is your friend.

Today y'all saw a very overbought gold and silver market spooked by silly, inconsequential news. The euro eased up on hopes that an EU summit would fix the sovereign debt crisis (it won't), then O'Bama said the budget plan floated by the "Gang of Six" senators might break the impasse over raising the federal debt ceiling (not likely).

Even if the Gang of Six plan were adopted, it would only cut $4 trillion over 10 years -- they have to multiply the reductions by 10 years, otherwise you couldn't find them with an electron microscope. But multiply a $3.5 trillion budget, which WILL NOT stop growing, by 10 to $35 trillion, then divide $4 trillion by that. It's a minute 11.4%. Friends, when over 30% of income in the US comes from direct federal government spending, that's not a dwarf star in a dark sky.

The European crisis will be papered over with a "re-scheduling" which will bail out the banks and feed those tapeworms even more fatly and permanently on the victim countries. The debt ceiling question is 100% theater, as every goof involved knows they have no choice and no will but to raise the debt ceiling. They are quibbling about $100 million. If you were spending too much on your $2000 monthly budget and tightened your belt by a like amount you would be struggling along on only $1,999.94. Drama, the theater of the despicable.

But the Beast of Muddy Brain can't see it, and so is sucked in to its own destruction and deceit, flaring in empty hope when O'Bama speaks a kind word toward a deal.

To fix the problem requires a will to let the bankrupt fail, let unemployment rise, let bad debt be written off, suffer two years of economic agony, and never again be seduced by the Keynesian stupidity that government can guarantee prosperity by borrowing and spending. Or that individuals can prosper by borrowing to consume. Since you won't see that until Ben Bernancubus can walk on water, you will see more of the same stupidity until finally the machine grinds to a hyperinflationary halt and a dictator arises to decorate the lampposts with bankers and their politician flunkies. Pray for a better outcome.

The GOLD PRICE hit $1,609.89 today and was rolling along for what anyone might have expected to be an easy down day. Comex closed down only $1.20 at $1,600.90 after a $1,609.90 high. Then came the announcement shortly after the close, and in less than half an hour after market gold dropped to $1,585, then to $1,582.30. Support lies at $1,575 - $1,580, then $1,560. Lowest extent of the fall will probably hit tomorrow, for I don't expect this to last long. Unless gold drops significantly below $1,560, I believe it has begun a new rally. But watch $1,560, and the 20 DMA at $1,430.

Absent that gainsaying below-$1,560 close, the GOLD PRICE should reach $1,675 before it really corrects.

The SILVER PRICE had lost only 12.2c by the time Comex closed at 4021.1c. Then came the "News" and in a few more than 30 minutes silver had lost 100c, then hit a low at 3853c. It quickly recovered and climbed above 3900c in the aftermarket, but will take another blow tomorrow. Support comes at 3850c and at 3800.

I will buy at 3850c and buy more at 3800c. Yes, I am aware this all might be a trap and silver might drop thru the whole support area 3350c - 3850c, but I'll buy some anyway.

TODAY stocks, oversold and grasping at straws, jumped in a single mighty bound on open from below 12,400 Dow to above 12,500 and then to 12,600. Dow closed up 202.26 (1.83%) at 12,587.42 and S&P500 added 21.29 to end up 1.63% at 1,326.73

Think. Ponder. Savor the thought. Once upon a time stock markets were driven by economic realities; today they are driven by political will o' the wisps.

Stocks have become the Bigfoot in the Investment Menagerie. Do yourself a favor: get out of the middle of the road. Eighteen wheeler's coming. Sell your stocks.

Dollar index took a blow to the chin today, dropping 26.2 basis points to 75.221 (down 0.34%). Remains above support at 74.80 and above 20 and 50 DMAs (75.10 and 75.02). Uptrend unbroken.

Euro put a little profit in day traders' pockets today, but without altering anything on the chart. Remains in a downtrend. Of course, if the Euro summit on Thursday publishes some bogus "solution", euro will jump, probably to 1.4500. But if they really do solve anything, well, I'll grow me a tail, swing through the trees and start eating bugs and leaves for a living.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.

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 outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.



Monday, July 18, 2011

They Cannot, Dare Not Stop Inflating, and that Will Keep Driving Silver and Gold Prices to the Stars

Gold Price Close Today : 1,602.10
Gold Price Close 8-Jul : 1,541.20
Change : 60.90 or 4.0%

Silver Price Close Today : 4033.3
Silver Price Close 8-Jul : 3653.6
Change : 379.70 or 10.4%

Gold Silver Ratio Today : 39.722
Gold Silver Ratio 8-Jul : 42.183
Change : -2.46 or -5.8%

Silver Gold Ratio : 0.02518
Silver Gold Ratio 8-Jul : 0.02371
Change : 0.00147 or 6.2%

Dow in Gold Dollars : $ 159.81
Dow in Gold Dollars 8-Jul : $ 169.77
Change : $ (9.96) or -5.9%

Dow in Gold Ounces : 7.731
Dow in Gold Ounces 8-Jul : 8.213
Change : -0.48 or -5.9%

Dow in Silver Ounces : 307.07
Dow in Silver Ounces 8-Jul : 346.43
Change : -39.36 or -11.4%

Dow Industrial : 12,385.16
Dow Industrial 8-Jul : 12,657.20
Change : -272.04 or -2.1%

S&P 500 : 1,305.44
S&P 500 8-Jul : 1,343.80
Change : -38.36 or -2.9%

US Dollar Index : 75.378
US Dollar Index 8-Jul : 75.082
Change : 0.296 or 0.4%

Platinum Price Close Today : 1,775.20
Platinum Price Close 8-Jul : 1,730.50
Change : 44.70 or 2.6%

Palladium Price Close Today : 795.75
Palladium Price Close 8-Jul : 775.05
Change : 20.70 or 2.7%


Every morning I drive down Suck Stem Branch Road and just before I drive into the Green Cathedral there lives a groundhog. I bear no animus to any groundhog, but for some crazed reason, the groundhog sits in the ditch and waits until my car gets within about 35 feet and at that precise moment races across the road in a suicidal game of chicken with my 3,500 lb. Isuzu Trooper. I have observed that rabbits and squirrels, too, will abandon a perfectly secure refuge to rush to their own destruction awaiting in midroad. Yet this suicidal behavior can't hold a candle to human beings. We have central banks.

I missed sending a commentary last Friday, so will sum up last week from Friday a week ago to today, Monday.

Certain numbers will leap out at you from the scoreboard: the SILVER PRICE up 10,.4% the GOLD PRICE up 4%, Dow in Silver ounces down 11.4%, Dow in Gold Dollars down 5.9%. Not a good week for stocks or dollar denominated assets.

The GOLD PRICE today reached 103% of its last high. It's over $1,600, with Comex closing today at $1,602.10, up $12.30. On the weekly chart 'twill hit the upper trading channel boundary about $1,650, but $1,625 remains another ancient target. I noticed Steve Saville commented yesterday that GOLD had been moving up 9 days straight, an awfully long unbroken stretch. Well, today it made that ten days, yet surely some pause, some correction must strike soon.

The SILVER PRICE returned to center stage today, gaining 127c to shutter down Comex at 4033.3c, after a high of 4071c. That took the gold/silver ratio down to 39.722. Silver above 4100c means the Dogs of Rally are racing again. Stand not in the path of this juggernaut, but bear always in your mind that it might turn at any time. Clearly silver is following gold, actually, outrunning it, but both are being driven by institutional stupidity, government misfeasance, central bank malfeasance, and the need to feed the banks. Can that last forever?

Ooooo. I should have said that some other way.

Every time the SILVER PRICE approaches its last high, the shorts flee and the bulls take the field, pushing to the next level: 3940c yields, then shoots to 4050c. I'm not opposed to buying here if you have a calm and equitable mind that recognizes the risk of all those institutional players suddenly coming to their senses -- or, more precisely, APPEARING to come to their senses.

In the long run it makes no difference what they do, they cannot, dare not stop inflating, and that will keep driving SILVER and GOLD PRICES to the stars. I fear, I truly fear, that silver and gold are accelerating into that state that panicked buyers will not look at charts or even ask prices, they will simply buy, buy, buy in their desperate need to flee fiat currencies.

Stocks today reached G$159.81 (7.731 ounces), a new low for this move and a tiny breakdown thru the bottom support line. The DiG$ frequently makes that breakdown without following through, but if it does then look for a speedy plunge to G$145 (7.014 oz). Dow in Silver Ounces is verging on a breakdown through 300 oz. of silver buying the whole Dow.

Stocks spent the last four trading days steadily digging lower and lower. Now that they have reached 12,300, they might catch on that stouter support. On the other hand, they tried to pierce their 20 and 50 day moving averages today (12,346 and 12,359) but didn't close beneath them.

Stocks remain the Typhoid Mary of Investment Healthcare Professionals.

By the way, the new low for the Dow in Gold Dollars whispers that either stocks are about to plunge or gold is about to skyrocket.

The US DOLLAR INDEX rose 14.8 basis points today (0.19%) to its present 75.378. Mark, simply, that the dollar remains in an uptrend from last Wednesday's 74.65 low and from its May 72.70 low: higher highs, lower lows makes an uptrend. As long as the Dollar Index remains above 74.75, the trend remains in force, targetting 78.

Euro struggleth still. Today closed at 1.4110, down 0.34%. Hard to look at this chart, a jagged descent as bad as the face of Mt. Everest, and imagine that it will turn and climb. Close below 1.395 and 1.3913 (200 DMA) kicks the euro into the abyss. Yen has made a classic pennant which in a sane world where central banks and governments don't manipulate markets, points to Y76.27/$ (131.12c/Y100). Don't look for that, however, because the Japanese Nice Government Men will be zeroing in on that rate to make it sink.

Footnote from last week's trip: if y'all are ever in Chattanooga, do not miss eating at the Boathouse restaurant on the Tennessee River. It is superb. The grilled squid with arugula and garlic will make you tongue slap your jaws.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.

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 outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.



Friday, July 15, 2011

Gold Price Closed Today at : 1,589.80

Gold Price Close Today : 1,589.80

Silver Price Close Today : 39.06

Platinum Price Close Today : 1,755.00

Palladium Price Close Today : 779.40

Gold Silver Ratio Today : 40.70

Dow Industrial : 12,479.73

US Dollar Index : 75.24



Thursday, July 14, 2011

Gold Price Closed Today at $1,589

Gold Price Close Today : 1,589.00
Change : 3.80 or 0.2%

Silver Price Close Today : 38.68
Change : .54 or 1.4%

Platinum Price Close Today : 1,774.30
Change : 7.30 or 0.4%

Palladium Price Close Today : 782.10
Change : -.65 or -0.1%

Gold Silver Ratio Today : 41.08
Change : -0.48 or 0.99%

Dow Industrial : 12,437.12
Change : -54.49 or -0.4%

US Dollar Index : 75.22
Change : -0.81 or -1.1%



Wednesday, July 13, 2011

The Gold Price Could Easily Close Above $1,600 Tomorrow, and Hit $1,625 or More

Gold Price Close Today : 1585.20
Change : 23.30 or 1.5%

Silver Price Close Today : 38.148
Change : 2.519 or 7.1%

Gold Silver Ratio Today : 41.55
Change : -2.284 or -5.2%

Silver Gold Ratio Today : 0.02407
Change : 0.001254 or 5.5%

Platinum Price Close Today : 1756.30
Change : 23.50 or 1.4%

Palladium Price Close Today : 777.60
Change : 12.55 or 1.6%

S&P 500 : 1,317.72
Change : 4.08 or 0.3%

Dow In GOLD$ : $162.90
Change : $ (1.82) or -1.1%

Dow in GOLD oz : 7.880
Change : -0.088 or -1.1%

Dow in SILVER oz : 327.45
Change : -21.90 or -6.3%

Dow Industrial : 12,491.61
Change : 44.73 or 0.4%

US Dollar Index : 75.16
Change : -0.650 or -0.9%

Sorry, business takes me to East Tennessee tomorrow and I won't be back until Saturday, so I won't be sending commentaries tomorrow or Friday.

I seem to remember a point back in April as silver was peaking when it gained 8% in one day. Today it gained in one flat-footed leap 7.1% or 251.9c to close at 3814.8c. Gold added 1.5% or $23.30 to close at $1,585.20. Meanwhile, the dollar fell.

Overnight the GOLD PRICE backed off to $1,565, but had eased up to up to $1,575 by New York open. About 9:00 all the nay-sayers ran for cover, and gold shot steadily up to $,1587.7 at 11:15. Rest of the day rolled over a little. Comex closed $1,585.20, up $23.30. Probably the Bernancubus' statements helped drive gold higher.

Only a fool would stand in the way of a rally like this. When it tops it will begin to waver, to back and fill, but that ain't yet. Could easily close above $1,600 tomorrow, and hit $1,625 or more.

CAREFUL! Rapid rises tend to be spongy and turn around quickly. Keep reminding yourself that as gold rises, just to retain a philosophical outlook.

To turn down the GOLD PRICE would have to close below $1,560. Look for the NGM to attack it tomorrow. They whacked the dollar today so are now free to turn their attention to gold and silver. Won't matter, unless some cure is found for the European financial crisis.

After gapping up yesterday to a new all-time high gold moved up to another new all-time high in euros, closing at E1,121.

As I guessed, the SILVER PRICE poked its nose thru the 50 day moving average at 3616c and panicked all its enemies and short sellers. 251.9c gain in one day is a huge move, for silver or anything else. By 9:00 silver had already hit 3700c, then perhaps Bernancubus' remarks about his future monetary generosity kicked in and drove silver to a high of 3840c. Comex closed 3814.8c, but could drive thru 3850c tomorrow, which sets it up for another leap straight up to 4000c - 4100c.

The SILVER PRICE will move much higher.

Somebody told me the Bernancubus' said in his comments today that gold is not money. Poor ol' boy's been hanging out in them Ivory League colleges too long. If he pulled down the United States Code off his shelf and read Title 31 he would find that all sorts of gold coins are legal tender -- "money" -- under United States law. I reckon they don't teach them economists to read when they're playing in the Ivory League. Only a natural born fool from Tennessee would go to the trouble of pulling down the law book and reading the law. Economists are above that.

Dollar fell today to 75.159, down 65 basis points or 0.84%. That was a Birth Certificate sort of day, appearing to show one thing but pointing at another.

No doubt Bernancubus' Nice Government Men, together with the Euro NGM, have been sweating bullets and losing sleep trying to keep that dollar down and the Euro up. They work together, you know.

All that was necessary was to push the dollar thru 75.50 and the stop orders and nervous traders did the rest, carrying it down to 75.159, now trading at 74.968, down 84.1 basis points. Let's see -- European financial crisis, gold up 1.5%, euro sinking out of sight yesterday nearly through its 200 DMA, AND the dollar sinks. Sure, that makes sense. Yeah, that's SOME birth certificate.

More, the Bernancubus unlimbered Samson's best weapon today to talk the dollar down allowing how he'd supply more "stimulus" if needed.

I hope y'all have caught on, but I wonder when everybody else will stop paying attention to this wretched sideshow and dump dollars altogether as too big a mess to be borne.

Stocks were buoyed a bit by the Bernancubus-ism's rolling out of the Sybillic lips today, but it was nothing worthy of awe. Stocks' high today took them up 165 points, but they closed up only 44.73 points (Dow at 12,491.61). You may call that a lot of things, but "strong" ain't one of 'em.

Stocks -- the broken tooth in the Hall of Investor Dental Health.

On 13 July 1931 the German Danabank failed, leading to closing all German banks until August 5. The more things change, the more they stay the same.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.

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 outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.



Tuesday, July 12, 2011

Today's $13.10 Rise Took the Gold Price to $1,561.90, a New High Close

Gold Price Close Today : 1561.90
Change : 13.10 or 0.8%

Silver Price Close Today : 35.629
Change : (0.060) or -0.2%

Gold Silver Ratio Today : 43.84
Change : 0.441 or 1.0%

Silver Gold Ratio Today : 0.02281
Change : -0.000232 or -1.0%

Platinum Price Close Today : 1732.80
Change : 2.30 or 0.1%

Palladium Price Close Today : 765.05
Change : -22.60 or -2.9%

S&P 500 : 1,313.64
Change : -15.88 or -1.2%

Dow In GOLD$ : $164.74
Change : $ (2.16) or -1.3%

Dow in GOLD oz : 7.969
Change : -0.105 or -1.3%

Dow in SILVER oz : 349.35
Change : -1.06 or -0.3%

Dow Industrial : 12,446.88
Change : -58.88 or -0.5%

US Dollar Index : 76.02
Change : 0.051 or 0.1%

Weird day. Fates are messing with the markets.

Fear of European financial crisis keeps panicking buyers out of euros and stocks and into dollars and GOLD -- but not SILVER.

I reckon I got something right yesterday, snuffing out the nervousness when I wrote, if gold "trading even HINTS it intends to pierce that [$1,560 resistance] level, gold will race toward $1,575."

Somebody heard that hint today. Overnight the GOLD PRICE traded down to 1540, and opened in NY at 1549.60. Stayed under $1,555 until 1:30, when the whispers hit the market. Not sure if that was the time that S&P announced it was downgrading Ireland's debt to junk status or not, but that would surely fit. Literally, next thing I saw was the GOLD PRICE at $1,564, then $1,573.25.

Let's deal with that new all-time high close first. On 2 May gold topped at $1,556.70. Today's $13.10 rise took Comex gold to $1,561.90, a new high close. Two interpretations wrestle here: is it a double top, or a breakout beginning a new rally?

Remember the rule of thumb says a market must break out by at least 2% (some say 3%) to qualify as a breakout. That would take gold to $1,587.85 ($1,603.40 for 3%).

Here's the risk. Markets correct downward in three waves, A-down, B-up, C-down. I claim not to be able to discern these, but my untrained eye sees A-down to $1,462, then works at trying to find the rest of B and C. Then I recall that B waves are often so ebullient, especially in bull markets, that they exceed the high beforehand and appear to be breaking out to a new rally, until their bottom falls out in a C-Down that takes them to new lows.

And bear in mind that sudden, jerky moves can reveal strength beneath, but they also are handmaiden to tops.

NOTE WELL that I am NOT calling this move by that name, only explaining that gold's position is nowhere near as clear as the mindless enthusiasts would have you believe.

On the other hand (Mercy! I'm sounding like an economist!) gold has made a slightly higher new high, and a financial crisis is fueling it, and you'd have to be a central banker not to conclude that gold will drive higher for the next few days. Question is, how much higher?

Right here there's not enough tea in China or ham in Tennessee to tempt me to short gold. To turn bearish gold would first need to close below $1,540 then follow up quickly with a close below $1,520. Tomorrow, gold could easily touch $1,600, and run on to $1,625.

All things considered, I would buy here (did buy some today) and not mourn too long if gold fell back down. Why not, because I can't add and subtract? No, only because gold, despite whatever intervening tumbles, will end the year much higher, and scale price heights presently inconceivable even to its cheerleaders.

Did I mention that gold in euros made a new all-time high today, too? E1119, versus old high at E1088, 2.8% higher.

Here's an added twist to yesterday's SILVER PRICE story. Silver, as I noted, tends to outperform gold when stocks are strong, and underperform when stocks are weak. Historical fact, not treason. Yet more lurks beneath the surface. When gld rises, most observers expect silver to rise as well, so if you are jimmying the gold price, as Nice Government Men are wont to do, you need to jimmy silver, too, so that the market says, "Gee whiz! Gold is rising but silver is not -- maybe that means the gold rise is phony!" Just a thought.

And what brought that though bubbling to the surface of my boiling brain was silver's behavior.

Yesterday it lost 85c, to 3568.9c. Overnight it sank like a rock to 3475c, but just as swiftly arose from its bed of shame in the gutter, shook itself off, and shot up the stairs to close Comex at 3562.9c, THEN add another 53c in the aftermarket to 3616c.

Meanwhile all the gurus and media voices are intoning their mantra (stocks and silver, remember) that silver is falling in response to reduced global economic expectations. Yeah, maybe. And maybe not.

Add all that up, and I wouldn't short silver with your money. Silver's tussling with its 50 DMA at 3617c, and tomorrow is liable to paint a black eye on all those clever people and run for 3850c.

I'm just doing the best I can to stay long silver, but as quick as I buy it somebody calls and buys it away.

Another tasty tidbit: that wholesale buy discount on US 90% silver coin which stood on 98c under spot on 6 July, today has climbed to 68c under spot. This transpires after a long period when the discount has ranged 115c - 105c. I trust that premium to tell me when silver is serious about rising, and its screaming that right now.

European financial crisis is driving this gold rally, so don't get too excited. Once fuel is withdrawn from a fire, it dies out. Buy sparingly here, with one eye on the end of the crisis, and one on its worsening.

Gold silver ratio today rose a 0.50 to 43.838. One remember with sharp longing the Fall 2008 US financial crisis and the opportunity it afforded to swap gold for silver at ridiculously high ratios, and to gobble up silver on the cheap. We might see that again, and join in shooting fish in a rain barrel.

Dollar index last night punched thru 76 and ran to 76.70 before the Nice Government Men called out their cowboys to tame that bucking bronco. They managed to run it down today to 75.703, but it was like holding a basketball underwater. Not much changed from yesterday it's now trading at 76.022, but that's as phony as the Consumer Price Index. 'Twill rise again tomorrow.

The euro added more downside to yesterday's gap, down 0.44% to 1.3970. The 200 DMA draweth nigh, and standeth now at 1.3902. The yen slipped out of the Japanese NGM's grip like a bar of soap in a bathtub, gapping up to Y79.18/$ (126.3c/Y100). NGM won't be enjoying sake and sushimi in peace tonight, I dare say.

Markets are whipping stocks like a rented mule. Dow lost 58.88 today to settle at 12,446.88 (down 0.47%) and S&P retreated 5.85 (0.44%) to 1,313.64. Trading was jerky and ragged. Looking bewildered, timid, and scared.

Stocks -- you can count on 'em in a crisis, just like a sprained ankle.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.



Monday, July 11, 2011

For the Nonce, and Probably for the Duration of this Financial Panic, Silver and Gold Seem to Have Parted Ways.

Gold Price Close Today : 1548.80
Change : 7.60 or 0.5%

Silver Price Close Today : 35.689
Change : (0.847) or -2.3%

Gold Silver Ratio Today : 43.40
Change : 1.214 or 2.9%

Silver Gold Ratio Today : 0.02304
Change : -0.000663 or -2.8%

Platinum Price Close Today : 1727.50
Change : -3.00 or -0.2%

Palladium Price Close Today : 767.60
Change : -20.05 or -2.5%

S&P 500 : 1,319.49
Change : -24.31 or -1.8%

Dow In GOLD$ : $166.91
Change : $ (2.84) or -1.7%

Dow in GOLD oz : 8.074
Change : -0.137 or -1.7%

Dow in SILVER oz : 350.41
Change : 3.98 or 1.1%

Dow Industrial : 12,505.76
Change : -151.44 or -1.2%

US Dollar Index : 75.97
Change : 0.644 or 0.9%

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 outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

Friday the GOLD PRICE had bumped up against the ceiling at $1,545, and kept bumping along over the weekend In European trading early today it began battering the hatch, then burst through about 7:00 a.m. NY time. By NY open the climb had already reached $1,550, and accelerated, but stalled at $1,556. Oddly, oddly -- in the view of those who know not the Nice Government Men who shepherd the markets -- about 10:30 some massive selling took the market in 15 minutes from $1,556 to $1,542. Means, motive, opportunity: We know the NGM have the means to manipulate silver and gold prices, we know their motive is to keep gold from running away while the euro is sinking out of sight, and of course they had opportunity and occasion today. Did them no good, though, because the gold price swiftly recovered to 1848, then climbed steadily through the day, ending Comex up 7.60 at $1,548.80. In the aftermarket it's trading $1,552 - $1,555.50.

Take the main chance: the GOLD PRICE will rise higher. It has now reached that $1,560 resistance, and if trading even HINTS it intends to pierce that level, gold will race toward $1,575. Remember meanwhile that panic is driving this, and as quick as the NGM cobble together Humpty-Dumpty again, that driver will disappear. All in, it appears that the GOLD PRICE has now forged a bottom off its May high. Trading range is from $1,480 to $1,560. Wherever this rally takes gold, it's not likely to trade below $1,510 again.

How is it, you may ask, that GOLD, which has been paralleling stocks and moving with them contrary to the US dollar, would suddenly rise with the dollar while stocks stumble? I reckon the financial crisis brewing in Italy grips so many hearts with panic that they are fleeing to liquidity, i.e., dollars and gold, and out of stocks. Unfortunately, that applies to silver also, which moves against gold as stocks move. When stocks wax strong, so silver waxes strong against gold, and vice versa. In times of panic, silver follows stocks.

Five day SILVER PRICE chart shows a turnaround. SILVER made peaks Friday and today around 3685. Silver misplaced 84.7c on Comex today, closing at 3568.9c. That fall took the gold silver ratio up from Friday's 42.183 to 43.397, a 2.9% rise. Whew. Remember that's temporary.

By 8:30 a.m. this morning silver was touching 3685c, but then wavered, lost 40c in the next two hours, and found a cliff to fall off at 3640c. In 15 minutes it dropped 90% to 3550c, but recovered a little and flatlined the day away.

Stand back from the chart and ask what that means? It means that silver has twice been turned back from 3675-3650c, and it bent silver away from the 50 DMA (3642c) nearly to its 20 DMA (3534c). None of that settles the issue positively, but it whispers that silver has been turned back for more penance at lower prices. A close above 3650c would gainsay that.

For the nonce, and probably for the duration of this financial panic, silver and gold seem to have parted ways.

Schizophrenia savaged markets today: stocks tanked, dollar rose, gold rose, silver fell. But mayhap it makes some sense.

Stocks woke up in a bad mood and moved on to a migraine. Dow dropped a meaty 151.44 points (down 1.2%) to 12,505.76. S&P500 surpassed it with a 24.31 (1.81%) drop to 1,319.49 (maybe that should be "underpassed").

The chart leads to one of two conclusions: either stocks have made a double top and will keep sinking from here, or they will recover from the present fall and reach a new high slightly higher than the last at Dow 12,875, and THEN keep sinking. Either way, lower, much lower prices await them, for their primary downtrend (bear market) runneth still.

Stocks -- they are the can of anchovies in your Investment Survival Pack.

Seems the specter of big Italian banks being found udders up in the pasture is panicking folks out of euros and into the dollar and gold -- not so much silver.

Dollar index shot up today, breaking down the door at 75.40 and rushing all the way to 76.156. Never mind the occasion, technically this sets up the dollar to break down that 76 door, too. Trading now up 64.4 basis points (0.83%) at 75.971. As I have been warning, dollar moved higher.

Of course, that means the Frankenstein currency, the euro, moved lower. While the dollar is closing in on its 200 day moving average (77.01) from below, the euro today gapped down toward its 200 Dma (now 1.3899). Looks like somebody dropping a 3 inch bolt out a 3rd story window on a still day. Jumped clean over 1.4200 to 1.4100, and closed at 1.4032, down 1.63%. Could easily hit 1.2000 or lower before this settles out. Bear in mind that all the European mega banks are wallowing as deep in rotten sovereign debt as American banks were wallowing in rotten mortgage debt in 2008 (well, more accurately, the American banks also have weighty exposure to euro sovereign debt). Point is that a financial panic such as gripped the US in fall 2008 might now seize Europe. Watch: that will send the dollar skyward, the euro earthward, gold skyward, and silver earthward. And ALL stock markets toward the earth's core.


Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.



Saturday, July 09, 2011

SILVER and GOLD PRICES Probably Made Their Last Low Last Friday

Gold Price Close Today : 1,541.20
Gold Price Close 1-Jul : 1,482.30
Change : 58.90 or 4.0%

Silver Price Close Today : 3653.6
Silver Price Close 1-Jul : 3369.4
Change : 284.20 or 8.4%

Gold Silver Ratio Today : 42.183
Gold Silver Ratio 1-Jul : 43.993
Change : -1.81 or -4.1%

Silver Gold Ratio : 0.02371
Silver Gold Ratio 1-Jul : 0.02273
Change : 0.00098 or 4.3%

Dow in Gold Dollars : $ 169.77
Dow in Gold Dollars 1-Jul : $ 175.48
Change : $ (5.71) or -3.3%

Dow in Gold Ounces : 8.213
Dow in Gold Ounces 1-Jul : 8.489
Change : -0.28 or -3.3%

Dow in Silver Ounces : 346.43
Dow in Silver Ounces 1-Jul : 373.44
Change : -27.01 or -7.2%

Dow Industrial : 12,657.20
Dow Industrial 1-Jul : 12,582.77
Change : 74.43 or 0.6%

S&P 500 : 1,343.80
S&P 500 1-Jul : 1,339.67
Change : 4.13 or 0.3%

US Dollar Index : 75.082
US Dollar Index 1-Jul : 74.296
Change : 0.786 or 1.1%

Platinum Price Close Today : 1,730.50
Platinum Price Close 1-Jul : 1,719.20
Change : 11.30 or 0.7%

Palladium Price Close Today : 775.05
Palladium Price Close 1-Jul : 759.70
Change : 15.35 or 2.0%

SILVER and GOLD PRICES probably made their last low last Friday, but remember the difficulties of summer, so they may see more range trading, bounded by $1,560 and $1,490 and 3850c - 3370c -- through most of August. However, as it was plain last week that the gold price closing above $1,510 would turn the gold price up, and turn up it did, with a vengeance, gaining 4% in 4 days. Today it added another $11 to reach $1,541.20. Yes, I did say yesterday that a close over $1,540 would take gold at least to $1,560. Look for it next week.

The gold price chart in euros looks even more bullish than the dollar gold chart, as my friend Bob the Technical Genius pointed out to me. There it touched its 200 DMA last week, and has climbed nearly to its all-time high.

If the gold price can pierce $1,560 (closing basis) and $1,575 intraday, it will launch a new leg up. Right now euro-fears are driving it, but just be careful. A market trading in a range is just a rattlesnake weaving back and forth trying to figure out where to bite you. If you're buying for the long term, just look at the gold price and ask yourself, "Can I buy here and swallow the risk it will drop 5%?" If you can, go ahead and buy it.

The silver price gained 284.2c or 8.4% in four days. Stay out of the way.

What's odd is that today it only added 8/10 of a cent. In the aftermarket its about 20c higher.

The area 3650-3675c is old resistance now, and the 50 day moving average is kicking in its share at 3667c, too. Above the next barrier is 3850c. The silver price has turned up dramatically, but is it only for another rally-within-the-range up to 3850c? Will it re-visit 3370c?

Once again, how greedy are you? How much risk can you stand? Buying here you risk a fall of 300c or 8.2%. Want to risk that, or wait until silver either breaks out above 3850c or drops down to 3370c?

Oh, I'm not worried about silver or gold price for the next few years, or even after August, but right now we have to deal with this frustrating bottoming process, and you can never be certain you've see than bottom until an upside breakout is confirmed. If you wait until then, you'll pay a lot more. All those clowns and commentators who are pronouncing an end to silver's bull market, let alone gold's, ought to have their microphones and computers confiscated and be locked up in the stocks where people could throw rotten eggs at them. No, the long term bull market is not in any doubt or peril.

Once again, I turn to the consolations of Tennessee Philosophy. What doth it matter if a man for the sake of 8.2% risk misseth buying a bull market position? We aren't working for 8.2% or 10%, or even 20%, but the triple or quadruple the bull market will bring from here.

That's what I like about Tennessee Philosophy: it brings perspective, even to a natural born fool.

Y'all are watching a correction in a bull market. Don't get hung up on buying at the perfect price, just beware you buy all you can stand.

Stocks had their brief moment in the sun, then gave most of it back this week. Silver and gold astonished, while platinum and palladium did little. US dollar index proved its uptrend.

Whatever fuel was driving stocks was used up this week. They fell a little short of the high I expected, 12,753 versus 12,875, but they may make that point yet.

Most interesting is that stocks squandered all their strength against gold in one fell spurt, like some kid laying a toothpaste tube down on the counter and hitting it with his fist. Big spurt shoots toward the ceiling, but nothing happens after that (except your mother finds toothpaste on the wall and you have to fetch a switch off the peach tree). The Dow in Gold Dollars shot above its 200 DMA (G$172.61 or 8.35 oz) for one whole day, then fell beneath again, and today approached the 50 DMA down below (G$168.27 or 8.14 Oz). Only a matter of time until stocks begin free-falling against gold.

Stocks -- they are the empty parachute pack in Investment Sky-diving Gear.

US DOLLAR INDEX rose modestly today to 75.082, up 12.5 basis points. Not a big deal, but still a big deal because (1) dollar broke 75 this week without following thru downside, and (2) dollar index double bottomed yesterday and today at 74.85, (3) dollar remains above 75 and so in the uptrend begun off the May 1 bottom.

The euro reeled backward again with news of troubles in the Italian banking system, arrest of a friend of the finance minister, and said minister's nearness to resigning. "Is Italy next to fail?" wonder the fearful. Euro closed down 2/3 of 1% today at 1.4264. The yen jumped today back to the 20 DMA, closing at Y80.61/$ (124.06c/Y100).

Y'all enjoy your weekend.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.



Thursday, July 07, 2011

Where are We Now With the Gold Price?

Gold Price Close Today : 1530.20
Change : 1.50 or 0.1%

Silver Price Close Today : 36.528
Change : 0.617 or 1.7%

Gold Silver Ratio Today : 41.89
Change : -0.678 or -1.6%

Silver Gold Ratio Today : 0.02387
Change : 0.000380 or 1.6%

Platinum Price Close Today : 1746.10
Change : 18.90 or 1.1%

Palladium Price Close Today : 787.65
Change : 22.10 or 2.9%

S&P 500 : 1,353.22
Change : 14.00 or 1.0%

Dow In GOLD$ : $171.83
Change : $ 1.11 or 0.7%

Dow in GOLD oz : 8.312
Change : 0.054 or 0.7%

Dow in SILVER oz : 348.21
Change : -3.38 or -1.0%

Dow Industrial : 12,719.49
Change : 93.47 or 0.7%

US Dollar Index : 74.92
Change : -0.203 or -0.3%

I have a button on my keyboard that I can push to make mistakes from the minute to the spectacular. Yesterday I pushed it and it gave y'all the wrong stock index closes. Correct is the Dow at 12,626.02 (Up 56.15) and the S&P500 up 1.34 at 1,339.22. Didn't really make much difference.

As I intimated yesterday, GOLD used up all its energy climbing from $1,480 to $1,530 in two days, and leaned up against the wall to breathe today.

Today on Comex GOLD PRICE ascended a not very steep $1.50 to close at $1,530.20.

Where are we now? Possibilities abound.

1. The GOLD PRICE will hit the downtrend line from its May peak tomorrow about $1,540 and burst thru, smash minor resistance shortly at $1,555 - $1,560, and disappear into the stratosphere, leaving behind only wispy little contrails for those not on board.

2. The GOLD PRICE will trade sideways through August in a range between $1,560 and $1,575, then in September turn up in earnest, meanwhile frustrating the life out of all of us.

3. The GOLD PRICE fell down out of an even sided triangle bounded above by May 1 at $1,577.40 and June 3 @ $1,555 and below by the line drawn from May's $1,462.50 to June's $1,511.40. It broke down from that triangle 25 June, traded down to $1,478.30, and has since rallied to the APEX of that triangle, from where it will fall again to lower lows.

Of those three, No. 3 looks most likely to me, but the market tells me, I don't tell the market. Tomorrow the market will speak, but maybe out of both sides of its mouth because it will be Friday and people close out their positions before the weekend after big-gaining weeks, so gold might back off tomorrow to $1,525 or $1,518 and still come back Monday punching its muggers in the mouth and screaming through $1,540.

Whatever the outcome, that $1,540 is the mark to watch. Downside, gold must not close below $1,505 or its inertia will shift in favour of gravity.

The SILVER PRICE is not as unequivocal as gold. It remains today above its 20 DMA, reaching for the 50 Dma at 3690c. On Comex silver tweaked the croakers by stealing another 61.7c to close at 3652.8, well above 3600c resistance.

Since May the SILVER PRICE has formed a flat-topped rising triangle with the top at 3850c. These formations can break out either way, but usually break out to the upside. Silver's fault is, however that it broke DOWN out of the triangle, from 3650c (about today's level) then traded down and sideways: no resolution.

So silver tells us nothing -- not a hint -- till it closes above 3850c or below 3370c. Silver must yet plow across the wretchedly contrary seasonal ground of July and August, never kind months.

For me this sort of market is pretty much lose/lose, because it could resolve either way. Oh, I know that by August the travail will have ended, but will it hit a new low in the meantime?

No way for a natural born fool from Tennessee to tell.

By the way, the gold/silver ratio fell today to 41.891, and that is NOT bearish for silver.

Be patient, watch, box the market. If it clears 3850c buy, or if it breaks 3370c get ready to buy, but in between we don't have much guidance. I got tired of waiting and bought a goodly amount, but it may leave gravel in my mouth. So be it.

One reader asked a good question about the relation of the US dollar, Dow, and silver and gold, and questioned the Chinese economic miracle. I wrote back

Fear of the euro drives up the dollar AS WELL AS GOLD. Fear of the euro benefits both dollar and gold.

To believe that China is bulletproof economically means you must also believe 1. That developing economies building on borrowed money never experience large corrections of spongy growth (a proposition disproved by the last 150 years' history), and 2. That a planned economy can outperform a free economy. Well-founded reports of huge overbuilding and overstocking (dead inventories) have been coming out of China for more than 10 years. One day the carbuncle will burst.

Regardless what the dollar does short term, metals will rise long term because long term the US government and Federal reserve MUST inflate or die, so they WILL inflate.

TODAY stocks clambered up on the open and maintained those gains all day. Dow added 93.47 (0.74%) to 12,719.49 while the S&P 500 added 14 (1.05%) to 1,353.22.

Process of ratcheting to new levels continues. Now 12,750 is the barrier but before this rally ends the Dow will see 12,876 or higher and all the gurus and pimps -- WHOA! did I say "pimps"? Yes, I did. -- will be touting a new era and permanent high levels for stocks.

Stocks -- they're YOUR ticket to an impoverished old age. Cat food, anyone? It's reeeeally crunchy.

Somebody ambushed the US dollar index at 75.40 and hit it on the head with a ball-peen hammer. Dollar was knocked plumb out, fell to 74.85, but recovered to trade now at 74.919, down 20.3 basis points.

Appears that today marked the end of the Dollar's rise from Monday, but nothing more than that. May fall back to 74.50, but will keep on climbing, however glacially.

Euro roused today like a drunk from a gutter, close at 1.4362, then passed out again. Hit the 20 DMA. Nice Government Men in Nippon have the Yen well in hand. Closed today at Y81.26/$ (123.08c/Y100).

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.