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Wednesday, August 31, 2011

Markets will Probably Move Sideways Until After Monday - Then Silver and Gold Prices Could Really Jump

Gold Price Close Today : 1828.50
Change : 1.80 or 0.1%

Silver Price Close Today : 41.699
Change : 0.301 or 0.7%

Gold Silver Ratio Today : 43.85
Change : -0.275 or -0.6%

Silver Gold Ratio Today : 0.02281
Change : 0.000142 or 0.6%

Platinum Price Close Today : 1847.40
Change : -8.10 or -0.4%

Palladium Price Close Today : 782.90
Change : 0.00 or 0.0%

S&P 500 : 1,218.89
Change : 5.97 or 0.5%

Dow In GOLD$ : $131.30
Change : $ 0.49 or 0.4%

Dow in GOLD oz : 6.351
Change : 0.024 or 0.4%

Dow in SILVER oz : 278.51
Change : -0.73 or -0.3%

Dow Industrial : 11,613.53
Change : 53.58 or 0.5%

US Dollar Index : 73.98
Change : 0.256 or 0.3%

Glanced over at Platinum and Palladium to see how they're doing. Palladium has been very strong and looks something like silver. Now above all moving averages and inertia is higher. Platinum looks more like gold in the past two weeks (only), and is blocked by $1,850 resistance. If it can clear that, 'twill jump.

Let me refine what I said yesterday: the GOLD PRICE is pounding on the $1,840 ceiling, not $1,850. For the day it rose $1.80 to $1,828.50 on Comex, but the 5 day chart pictures a market stalled at $1,840, floating and bumping against the ceiling like a kid's helium balloon. Today's low touched $1,811.35, adding more strength to $1,810 support.

So the GOLD PRICE has a range of $1,810 - $1,840, more narrowly $1,820 - $1,840. Market has gone indecisive here, perhaps in the lead-up to the Labor Day holiday. My wholesalers tell me retail dealers yesterday were on balance selling GOLD to them, which is a bit negative. Normally you would accord great weight to what market insiders -- like retail dealers -- do, but an awful lot of retail gold dealers are scared money, and don't do as well as the public.

The premium on SILVER US 90% silver coin, on the other hand, usually offers a reliable hint about silver's direction. When that premium is dropping slightly, it's neutral or negative. When the premium climbs suddenly, silver is about to turn up. Right now the "premium" is actually a discount to the silver value, and a historically large discount at 125c an ounce.

Yet the SILVER PRICE 5 day chart shows silver in an uptrend since last Friday. Today it rose another 30.1c to close Comex at 4169.9c, battering on the 4200c gate. The SILVER PRICE still must confirm its rise by closing successively higher, first over 4200c then 4400c.



From a longer view, silver has been trending upward from an intraday low of 3230c on 14 May.

With the last two days' progress, silver must now guard support at 4100c. A close below that casts doubt on silver's intentions.

Markets will probably move sideways until after Monday. Then silver and gold could really jump.

The mighty US DOLLAR index on its shaky legs managed to creep through 74 today and closed up 21.5 basis points (0.28%). It remains in the same old trading range of 73.40 - 75.50, and hasn't even conquered its 20 dma (74.23) yet, but it strengthens morale for it to climb above 74. Eventually, in the next few months, the dollar will rally -- given it falleth not below 72.70.

The euro (I strive not to gloat) after gapping down yesterday closed lower today, down 0.48% to 1.4377 and nearly on its 20 dma (1.4352). In spite of all the Nice Government Men and all the genius central bankers huffing, puffing, and blowing together with all their itty-might, the euro will do well not to fall to the center of the earth. Unless it can clear 1.4550 followed quickly by 1.4700, it will visit 1.2000.

With the yen the Japanese NGM must feel like they are trying to hold a basketball underwater. Rose again today to 130.54c/Y100 (Y76.60/$). Surely they must act soon to bring it down.

Stocks rose again today. Dow clumb 53.58 (0.46%) to 11,613.53 while the S&P500 paced alongside, up 5.97 (0.49%) at 1,218.89. Stocks have now risen for the last four days after Key Reversing last Friday.

We are not amused, impressed, or tempted to buy stocks. We wonder also why the yield is rising on the US 10 year Treasury note and the 30 year bond. The Fed's interest rate manipulations, after all, are applied to the Federal Funds rate, the overnight rate it charges banks for borrowing. But the Fed setteth not interest rates; in the final analysis, the MARKET setteth those rates. And when the market decides that US debt paper is too expensive,they pay less and the interest rate rises. Last I heard, rising interest rates are popularly (but wrongly) perceived as death to the stock market. BWDIK -- But What Do I Know?

Stocks -- they are the strains of the Charleston wafting through the Museum of Investment Music.

Martin Armstrong made an interesting comment in his last newsletter that made a sort of kink in my mind. From the yankee government's Greenback Act of 1862 forward, the banking cartel was allowed to count US government bonds as reserves. But bonds are -- debt! And how can debt be a reserve against cash that you owe depositors, in the same class

with gold coin? Just never had seen it quite this way before. This was an earlier form of pyramiding, where they borrowed money into existence with government debt, then pyramided on that by making it the backing for more bank credit issues. Wow. It's like sitting in a tub, then pulling yourself up into the sky by tugging on the handles. Ain't banking great?

On 31 August 1521 Cortes captured the city of Tenochtitlan, the Aztec capital, and burned it. I understand that a multitude of bleeding hearts today condemn Cortes, without ever bothering to ask how a couple of thousand Spaniards could overthrow a military empire of eleven million. Simple: they had native allies. The nations subject to the Aztecs fought with the Spanish to throw off their yoke. The yoke consisted of having to furnish thousands of human sacrifices yearly for the Aztec temples. At one temple a Spaniard counted over 100,000 skulls in a skull rack. The Aztec priests threw the victim onto an altar face up, sliced open the chest with an obsidian knife then cut out the still beating heart. Bodies were kicked down the pyramid and beheaded. Often the victims were skinned and the priests wore the skins and ate the victims.

Now me, if I had been one of those subject peoples, I would have joined with the Spaniards or anybody else short of the devil himself to get rid of the Aztecs, and I wouldn't have mourned 'em when they were gone.

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, August 30, 2011

While We Have Our Eye's on One Dollar Moves, Silver is Planning to Triple, Gold to Double and More

Gold Price Close Today : 1826.70
Change : 38.20 or 2.1%

Silver Price Close Today : 41.398
Change : 0.852 or 2.1%

Gold Silver Ratio Today : 44.13
Change : 0.015 or 0.0%

Silver Gold Ratio Today : 0.02266
Change : -0.000008 or 0.0%

Platinum Price Close Today : 1855.50
Change : 31.50 or 1.7%

Palladium Price Close Today : 773.50
Change : 17.35 or 2.3%

S&P 500 : 1,212.92
Change : 2.84 or 0.2%

Dow In GOLD$ : $13,081.81
Change : $ (277.82) or -2.1%

Dow in GOLD oz : 632.832
Change : -13.439 or -2.1%

Dow in SILVER oz : 27,923.93
Change : -586.26 or -2.1%

Dow Industrial : 1,155,995.00
Change : 20.67 or 0.0%

US Dollar Index : 73.98
Change : 0.256 or 0.3%

The GOLD PRICE baffled everyone today by rising $38.20 on Comex and closing at $1,826.70. It's now trading at $1,839.10, but nobody -- least of all me -- seems to know why, other than, "Somebody's buying it."

GOLD is pounding hard on that $1,850 ceiling, or it is tracing a double top with last Friday at $,1850. First important support stands at $1,780. Overhead the SILVER PRICE needs to barrel through $1,850, and soon, or admit to beginning a longer correction.

I am blowing hot and cold out of both sides of my mouth -- like a parricide throwing himself on the mercy of the court because he's an orphan -- because although gold's past 10 days' performance gives it a downward bias, I have been consistently UNDERestimating gold's performance. If it closes higher tomorrow I will admit it is rising again and hop aboard.

The SILVER PRICE has also beaten me up lately. Friday, yesterday, and today the SILVER PRICE has traded in a range of roughly 4025c to 4150c. This patter either marks a top or a continuation (a breather before rising higher). SILVER actually looks more likely to rise than GOLD. Last week's correction took it nearly to its 50dma, and set up what might be another move up. Ratio rose today, but remains equivocal.

Down below the SILVER PRICE needs to hold 3976c, while up above it must cross 4200c, then 4400c to prove anything at all.

All this is just dithering about what tomorrow might bring, but the long term outlook has not changed. While we have our eye's on one dollar moves, silver is planning to triple, gold to double and more.

These markets are not suitable for shallow pockets or the impatient.

Stocks stalled today at 11,600, unable to punch through resistance there. Better shoot the general in charge and bring out another. Dow needs some new energy breach 11,600.

Dow closed today up a nothing 20.7, a jiggle, to 11,559.95. S&P waddled right along side, up 2.84 to 1,212.92. Temporarily momentum is up because day before yesterday stocks closed above their 20 day moving average. Still, that needs to be confirmed by a continuing advance and a close over the 50 dma, now at 11,926.

Here's what I don't like about the US Stock Market: a real stock market has an economy behind it. The US stock market doesn't, at least, not one that is anything grander than a filmy veil hiding the ugliest bride you can imagine. Somebody's getting fooled.

Stocks -- they are the sow behind the propaganda lipstick.

Watching currencies -- all of 'em -- is like being dragged to your child's fiddle recital. Some of the children are getting it, but up steps one or two who are wasting their parent's money shamefully and would be better off being taught how to do something useful like changing tires or laying asphalt. Y'all know what this is like. The performance is painfully bad, so bad you don't even lean over to your wife and giggle in her ear, because the spectacle is so embarrassing for everybody you'd be ashamed to do that.

Anyhow, the US dollar index rose 25.6 basis points today, a magnificent 1/3 of 1%, to 73.977. More meaningless movement within a narrow range, before a rally which will probably proceed a drop to 39 [sic] or so. Yesterday the dollar defended and validated support above 73.40. Wow. That leaves me so excited I'm not sure I can stay awake.

Then there's the euro. Yesterday it traded to the top of its narrow range (high 1.4546), then today gapped DOWN to close at 1.4443, down 1/2%. Euro has a great future as an oddity of history. Yen remains close to the top of its range, held down only by the mortification of the Japanese Nice Government Men.

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, August 29, 2011

Strong Pockets are Ready to Buy Gold Anywhere Under $1,750

Gold Price Close Today : 1788.40
Change : (5.70) or -0.3%

Silver Price Close Today : 40.546
Change : (0.406) or -1.0%

Gold Silver Ratio Today : 44.11
Change : 0.298 or 0.7%

Silver Gold Ratio Today : 0.02267
Change : -0.000154 or -0.7%

Platinum Price Close Today : 1824.00
Change : -8.70 or -0.5%

Palladium Price Close Today : 756.15
Change : -5.85 or -0.8%

S&P 500 : 1,210.08
Change : 33.28 or 2.8%

Dow In GOLD$ : $133.38
Change : $ 3.37 or 2.6%

Dow in GOLD oz : 6.452
Change : 0.163 or 2.6%

Dow in SILVER oz : 284.60
Change : 9.04 or 3.3%

Dow Industrial : 11,539.25
Change : 254.71 or 2.3%

US Dollar Index : 73.69
Change : -1.010 or -1.4%

The GOLD PRICE backed off last Friday's panic/euphoria and fell $5.70 on Comex to close at $1,788.40, still above crucial $1,750 support.

Last week's double key reversals still scream that very strong pockets are ready to buy gold anywhere under $1,750, and the closer it gets to $1,700, the deeper they dig in their pockets. Short term support now stands at $1,775: any nose-poke below that will carry gold to $1,750. Up above $1,800, $1,825, and $1,850 place barriers to any rise.

Maybe that tumble last Wednesday marked the top of gold's rally- or maybe NOT. Gold will tell us this week.

What you are watching is the Nice Government Men trying to transmogrify a raging panic into a "slow burn panic." Not as exciting, but lasts longer.

Today the SILVER PRICE traded in a range between 4135c and 4028c. Comex dropped off 40.6c. The SILVER PRICE has traced out a range between 4150c and 4000c. It may be rolling over to the downside, but has to break 4000c first, and fight a tough battle to sink through all that support between 4000c and 3880c

In both SILVER and GOLD PRICES we may be entering another frustrating trading range period like the one from 1 May through mid-July. If we are watching a correction, then the GOLD PRICE will target its 50 DMA ($1,644) and silver it's 200 DMA (now 3488c). This week will instruct us. Gold/Silver ratio rose again to 44.108, near the range top. That whispers trouble for silver, but rising stocks (rising risk appetite) whispers sweet dreams for silver. Picture simply isn't clear yet.

I hope all y'all on the east coast survived the hurricane well and sound. Meanwhile, storms continue to blow through markets.

Dow today broke through 11,300 resistance to close at 11,539.25, up 254.71 or 2.26%. S&P500 rose more, 33.28 points (4.75%) to 1,210.08. This brings the Dow up to the mid-August intraday high at 11,529.67, and clears the 20 day moving average at 11,260, but remains far below the 200 DMA at 11,988. Next resistance comes at 11,862.53, intraday low in June. But greater resistance lurks between 11,900 and 12,100. By no means am I convinced that stocks are about to shoot for the moon. Rather, the Dow might just as easily collapse again at 11,550/11,600 and resume its fall. Either it is now bumping up along the bottom of the Jaws of Death megaphone formation, or it will rise to the neckline of the Head and Shoulders top around 12,000. Either way, bodacious new prices lie not in its future.

Stocks -- the Ghost of Christmas Past visiting you in your sleep.

US DOLLAR INDEX dropped a nothing 10.1 basis points (0.13%), and remains in its tight trading range. Must violate 73.40 to move lower.

In Europe today they were smoking more crack. How do I know? The Euro rose to a new high for the move at 1.4506, up 0.06%, but remains range bound. If it ever breaks out upside, it might be tomorrow. Nothing has changed in the Hall of Illusions. Yen finally dropped a bit, down 0.28% at 130.09c/Y100 (Y76.87/$).

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, August 26, 2011

Both Silver and Gold Prices Will Rally Further

Gold Price Close Today : 1,794.10
Gold Price Close 19-Aug : 1,848.90
Change : -54.80 or -3.0%

Silver Price Close Today : 4095.2
Silver Price Close 19-Aug : 4242.8
Change : -147.60 or -3.5%

Gold Silver Ratio Today : 43.810
Gold Silver Ratio 19-Aug : 43.577
Change : 0.23 or 0.5%

Silver Gold Ratio : 0.02283
Silver Gold Ratio 19-Aug : 0.02295
Change : -0.00012 or -0.5%

Dow in Gold Dollars : $ 130.02
Dow in Gold Dollars 19-Aug : $ 120.95
Change : $ 9.07 or 7.5%

Dow in Gold Ounces : 6.290
Dow in Gold Ounces 19-Aug : 5.851
Change : 0.44 or 7.5%

Dow in Silver Ounces : 275.56
Dow in Silver Ounces 19-Aug : 254.96
Change : 20.59 or 8.1%

Dow Industrial : 11,284.54
Dow Industrial 19-Aug : 10,817.65
Change : 466.89 or 4.3%

S&P 500 : 1,176.80
S&P 500 19-Aug : 1,123.53
Change : 53.27 or 4.7%

US Dollar Index : 73.710
US Dollar Index 19-Aug : 73.993
Change : -0.283 or -0.4%

Platinum Price Close Today : 1,832.70
Platinum Price Close 19-Aug : 1,876.00
Change : -43.30 or -2.3%

Palladium Price Close Today : 762.00
Palladium Price Close 19-Aug : 750.00
Change : 12.00 or 1.6%


I have never before seen a market make TWO (2) Key reversals in four days, but that is what the GOLD PRICE did. Now you ought to understand that normally, a key reversal will change a markets direction for a little while.

Key Reversals occur in two parts. A downward Key Reversal happens when (1) a market trades into new high territory intraday but closes lower that day than the day before, then (2) the market closes lower still next day. An upward Key Reversal happens when (1) a market trades into new LOW territory intraday but closes HIGHER that day, and then (2) closes higher still next day.

Monday and Tuesday made a downward Key Reversal. Wednesday and Thursday GOLD made an Upward Key Reversal. To ice that donut, the GOLD PRICE today rose $34.30 to close comex at $1,794.10, then rose another $30 in the aftermarket!

Looking at the way GOLD bounced off $1,712 on Thursday, then closed ABOVE $1,750 support/resistance, the only safe path is to buy gold.

Next week may prove me wrong, but this week's action shouts that gold's rally has not near-about ended.

SILVER's low for the week came at 3905c, which I count as establishing 3900c as strong resistance now. SILVER made a sort of double-bottom there on Wedensday and Thursday. Thursday it gained an astounding 158.3c.

Our confusion will be cleared up when the SILVER PRICE closes above the last high at 4428c, or drops below 3875c. Right now, you have to say that silver is trending upward in a series of higher lows and higher highs. Wednesday's plunge did NOT break the uptrend line.

The slow-burn panic continues driving investors into silver and gold. SILVER continues to gain status alongside gold. Unless SILVER and GOLD PRICES weaken off terribly on Monday (below $1,700 and 3900c), I am buying.

Both SILVER and GOLD PRICES will rally further. Big correction has not struck yet. It lieth ahead somewhere.

Remember that Our Bosses in government, central bank, and Wall Street have only two weapons in their arsenal of panic control: inflation and blarney. Inflation adds liquidity to ease the panic, blarney calms the affrighted herd. I don't care how many "tools" they claim to have, they all boil down to inflation and blarney.

As far back as 1895 or 1907, the arch-banker John Pierpont Morgan was shooting his Blarney Cannon: "The man who is a bear on the future of the United States will always go broke." Ahhh, who could doubt one of our Big Bosses?

We know from yesterday's events that Our Bosses are terrified, because they loaded the mouth of their biggest Blarney Cannon and fired it: Warren Buffett. Banks US and European are puking sick dogs, and Bank of America sickest amongst 'em. How, O, How will we gull the public into buying bank stocks? We'll get Warren Buffett to announce he's buying $5 billion of preferred stock in BoA. Now Warren ain't operating a charity, so the great humanitarian will not lose a dime on this deal. The preferred stock pays a 6% dividend and has the primary claim on BoA's assets, even before bondholders. Blarn! Blarn! Hear the Blarney Cannon!

Didn't work. Dow sank 170.81, after the early morning Buffet Blarney Barrage.

Then today Our Bosses fired another gun in their Blarney Battery: the Bernanke Blarney Blaster. Bernancubus gave a speech which everyone hoped would explain how he would save the world. Alas, the Bernanke Blarney Blaster mis-fired. Not even enough powder to blow the ball out of the tube.

Beside confirming his utterly incurable cluelessness, the Bernancubus blustered like some cheap, shabby magician that he has Tools You Know Not Of. Mmmmm, 'bout time to dig them tools out, Ben, and put 'em to work! Result of this was something only rarely seen every millennium, back to back Key Reversals in the gold market, which says to me -- and I am nothing but a natural born fool from Tennessee and have never even drawn nigh to them high-falutin' Harvards and Yales where Our Bosses are educated and made Perfect to Decide Our Pissant Destinies -- that not a single shot of the blarney cannons hit anything, and investors remain terrorized by the banks' condition. Proof? The crowds flee still gold- and silverward.

Boom! Boom! Say the Blarney Cannon. Bust! Bust! Says the people.

Uh - oh. What's that other sound I hear? Is that snickering at the back of the room?? Surely you disrespectful scoundrels are not LAUGHING at Our Bosses?

STOCKS burned up immense amounts of buying power ammunition this week for a small gain. But the Nice Government Men did pull stocks back from disappearing into the abyss. Only succeeded though in lifting the Dow to 11,300 resistance. Dow today closed up 134.72 or 1.21%, while the S&P50 close up 17.53 (1.51%) at 1,176.80. Dow finally touched it 20 DMA (11,290) but missed closing above it.

Upside the Dow must now close above 11,530 to prove an uptrend. 200 DMA, likely target of countertrend rally, stands at 11,987, as far as the sky above the earth. A close below 10,600, still to come I trow, sends the Dow spinning out of control on its next leg earthward.

Buy stocks, because it will be a vote of confidence in the ability of the Federal Reserve and US government to direct the economy. That'll show all those gold-and-silver-buying croakers AND it will earn you a bed at the I-40 Under-The-Culvert Retirement Home.

The Nice Government Men managed to keep the US DOLLAR INDEX in its 75.5 - 73.5 range again this week. Today, likely on the strength of the Bernanke Blarney Blanster's speech, the dollar index fell 56.9 basis points to 73.71. As long as the dollar index stays above 72.70, my opinon remains that the dollar is meditating a rally.

The euro on "mysterious" strength rallied today to 1.4498, up 0.82% and bumping on the top of its 1.4530 range. If it broke out above that it would signal a rally, and it would signal that the world is even more lunatic than I already surmise.

The Japanese yet closed today at 130.45c/Y100 (Y76.66/$). It remains at the top of its range, with a new all time high 5 days ago, and momentum continues upward.

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 & 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 & silver on margin or with debt.

What DO I recommend? Physical gold and silver coins & bars in your own hands.

One final warning: NEVER insert a 747 Jumbo Jet up your nose.


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, August 25, 2011

Gold Price Closed Today at $1759.80

Gold Price Close Today : 1759.80
Change : 5.70 or 0.3%

Silver Price Close Today : 0.407
Change : (0.016) or -3.7%

Gold Silver Ratio Today : 4319.59
Change : 175.033 or 4.2%

Silver Gold Ratio Today : 0.00023
Change : -0.000010 or -4.1%

Platinum Price Close Today : 1820.30
Change : -42.40 or -2.3%

Palladium Price Close Today : 750.65
Change : -12.30 or -1.6%

S&P 500 : 1,159.27
Change : -18.33 or -1.6%

Dow In GOLD$ : $130.97
Change : $ (2.43) or -1.8%

Dow in GOLD oz : 6.336
Change : -0.117 or -1.8%

Dow in SILVER oz : 27,368.43
Change : 620.07 or 2.3%

Dow Industrial : 11,149.90
Change : -170.81 or -1.5%

US Dollar Index : 74.22
Change : 0.209 or 0.3%

Moneychanger's gone fishing, but sent this comment.

Establishment knows it's in big trouble. Witness firing big blarney cannon today. Warren Bufet buys 5 billion of biggest bank, Bank of America. Talking heads foaming at the mouth blathering about bets on America. O, can adults really be gulled by such blarney? Reckon so, since they are pulling it again. Buffet notwithstanding, stocks are doomed. Establishment is terrified. Buy silver and gold.

On Saturday, 3 September we will celebrate our annual Bodacious Hoedown again at the Top of the World farm. Starts at 1:00 p.m. with an afternoon of games like raw egg toss, dunking booth which my children have set up for me, and lots of others. Or you can sit bring a stringed instrument and sit under the trees jamming with others (do NOT bring a grand piano. It has strings, but won't fit in.) After that come supper with barbecued pork raised on our own farm, slaw, beans, tomatoes, and dessert. Then comes the fun: an Old Time Band and dance caller. This year we are not charging admission, as a thank-you to all our customers. If you're interested, email me with "Hoedown Directions" in the subject line and I'll send you directions and a list of local motels -- or you can camp out, if you like rustic camping. franklin AT the-moneychanger.com (replace AT with @)

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.



Wednesday, August 24, 2011

Silver and Gold Prices are Correcting, but will Come Back

Gold Price Close Today : 1754.10
Change : (104.20) or -5.6%

Silver Price Close Today : 39.157
Change : (3.124) or -7.4%

Gold Silver Ratio Today : 44.80
Change : 0.845 or 1.9%

Silver Gold Ratio Today : 0.02232
Change : -0.000429 or -1.9%

Platinum Price Close Today : 1803.50
Change : -59.20 or -3.2%

Palladium Price Close Today : 744.50
Change : -18.45 or -2.4%

S&P 500 : 1,177.60
Change : 15.25 or 1.3%

Dow In GOLD$ : $133.41
Change : $ 9.10 or 7.3%

Dow in GOLD oz : 6.454
Change : 0.440 or 7.3%

Dow in SILVER oz : 289.11
Change : 24.77 or 9.4%

Dow Industrial : 11,320.71
Change : 143.95 or 1.3%

US Dollar Index : 74.02
Change : 0.130 or 0.2%

Sometimes markets speak with forkéd tongue. Sometimes they speak loud and clear. Today was one of those days.

The GOLD PRICE put in that second part of a Key Reversal, loud and clear. It lost $104.20 today (5.6%) and closed Comex at $1,754.10. That's what happens when tinhorns and newcomers flock to a market because it's rising. When the heat turns up, they all stampede and yell, "Fire!" Okay by me, they only create buying opportunities.

Gold's fall brought it to $1,750 support, BUT it still hasn't touched its 20 DMA ($1,740.74), first tripwire of a decline. Oh, it will, tomorrow probably, but our big question is answered, namely, has a correction begun. Looks like it hath. However, the GOLD PRICE must break support at $1,725, then there's a tiny gap about $1,675, so there's another target. 50 dma, a frequent correction target, awaits at $1,627.93. Above that is $1,650 support. If all else fails, GOLD can catch hold at $1,600.

Be patient. The GOLD PRICE has a ways to fall, ASSUMING it confirms tomorrow by breaking that $1,750 support. Frankly, these volatile tergiversations in every market have left me punchdrunk. The way they're flopping from side to side, I want PROOF that GOLD will carry through to the downside.

Y'all better be watching this correction like a hawk for a chance to buy more gold. Why? Because the turmoil of the last two months has given you a foretaste of trading to come. The GOLD PRICE will come ROARING back, whether this correction lasts a week or six months. If the whole world were a desktop, not all the politics of the last two months would have moved a pencil.

The SILVER PRICE made one of its largest moves in a long time. It dropped 7.4% today, 312.4c, to 3915.7c. High was 4219c, low 3905c. SILVER, too, unequivocally confirmed a Key Reversal today. It WAS a lower close. And the SILVER PRICE broke thru its 20 dma (now 4008c).

The SILVER PRICE will fall further, but 3900c caught it today. Weak support appears at 3850c, but 3800c is stronger. 50 DMA meets silver at 3821c, 200 at 3468c. Lots of lateral support at 3800c.

Another little thing. Sometimes when a market traces out an equilateral triangle, then breaks out, after a long time it returns to the triangle's apex. Apex from the triangle SILVER formed May to mid-July falls just under 36.

Gold/silver ratio jumped from 43.951 yesterday to 44.805 today, top of the range and on its second try to break out upside. That's not helpful for silver.

Be patient, and lash yourself to the mast and stop your ears like Odysseus did to the Sirens whenever you hear parvenus and the hopelessly stock-addicted talk about the metals' "bubble" having ended. They're the same geniuses who told you to buy and hold stocks in 2001. Silver and gold are correcting, but will come back. Bull market has 3 - 10 years to run. It's just getting interesting.

Stocks traded up and down raggedly today, but managed to add 143.95 (1.29%) to the Dow by day's end, taking the average to 11,320.71. S&P rose 1.31% (15.25 points) to 1,177.60.

Dow turned up from the dreaded Death Cross today as the 50 day moving average (11,975) did not cross below the 200 DMA (11,989). Turns out it's not significant anyway in past historical performance, but as Prince Potemkin said to Catherine the Great, "Appearances are everything in the stock market"

Stocks -- your intergenerational pipeline to poverty.

Who could trade the US dollar index? One day up, next down, all in a tight range. Today it rose 13 basis points (0.17%), climbing over 74 to 74.024. Still locked in that 75.5 -73.4 range. Ben Bernancubus and the rest of the dolts managing the dollar couldn't manage a good-sized gas station successfully. A day's work would kill 'em.

The Euro, only fiat currency in the world WORSE than the US Dollar (no, no, wait -- the yen might be worse, too) fell today to 1.4414, down 0.16% as the "water wings" the Nice Government Men are putting under it fail to inflate. Stinker. Smell of death is all over it.

In the land of the blind the one-eyed man is king, and in a financial panic anything that even looks like it can see will attract money. Hence the yen's present exalted height. It fell a little today, 1/3% to 129.93c/Y100 (Y76.96/$).

On Saturday, 3 September we will celebrate our annual Bodacious Hoedown again at the Top of the World farm. Starts at 1:00 p.m. with an afternoon of games like raw egg toss, dunking booth which my children have set up for me, and lots of others. Or you can sit bring a stringed instrument and sit under the trees jamming with others (do NOT bring a grand piano. It has strings, but won't fit in.) After that come supper with barbecued pork raised on our own farm, slaw, beans, tomatoes, and dessert. Then comes the fun: an Old Time Band and dance caller. This year we are not charging admission, as a thank-you to all our customers. If you're interested, email me with "Hoedown Directions" in the subject line and I'll send you directions and a list of local motels -- or you can camp out, if you like rustic camping.

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 & 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 & silver on margin or with debt.

What DO I recommend? Physical gold and silver coins & bars in your own hands.

One final warning: NEVER insert a 747 Jumbo Jet up your nose.


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, August 23, 2011

The Gold Price Could Just as Well Rise Tomorrow as Fall - Better Brace for a Rough Ride, Though

Gold Price Close Today : 1858.30
Change : (30.40) or -1.6%

Silver Price Close Today : 42.281
Change : (1.040) or -2.4%

Gold Silver Ratio Today : 43.95
Change : 0.353 or 0.8%

Silver Gold Ratio Today : 0.02275
Change : -0.000184 or -0.8%

Platinum Price Close Today : 1862.70
Change : -41.20 or -2.2%

Palladium Price Close Today : 762.95
Change : -0.05 or 0.0%

S&P 500 : 1,162.35
Change : 38.53 or 3.4%

Dow In GOLD$ : $124.33
Change : $ 5.54 or 4.7%

Dow in GOLD oz : 6.015
Change : 0.268 or 4.7%

Dow in SILVER oz : 264.34
Change : 13.78 or 5.5%

Dow Industrial : 11,176.76
Change : 322.11 or 3.0%

US Dollar Index : 73.84
Change : -0.234 or -0.3%

Sorry I missed y'all yesterday, but I went to speak for Campaign for Liberty in Memphis. They treated me with great courtesy, and only a few people fell asleep during my speech. I really had fun, saw a lot of old friends, and slipped out of Memphis without being arrested.

Yesterday the GOLD PRICE hit another new all-time high, and today traded as high as $1,912.50 after hitting $1,918 yesterday. About 3 a.m. NY time the GOLD PRICE ran onto the shoals, dropping from $1,900 to $1,872 in an hour. Steadied out between $1,870 and $1,867 until New York opened, where gold's friends (or traders looking for a shorting opportunity) ran it nearly to $1,990, then let it drop about 11:00 all the way to $1,850. Comex closed down only $30.40 at $1,858.30, but in the aftermarket GOLD peeled off another $30 to $1,828.70.

Our old friend the Key Reversal has now raised one of his two heads. Remember that what we saw today in gold -- a break to new high territory with a close lower than the day before -- is only the first head. To qualify as a genuine Key Reversal the GOLD PRICE must follow through tomorrow with a close lower than today's.

That's likely after the long rise we've just come through, but no certainty. It's likely because GOLD has moved far above its 20 day moving average envelope, and that right universally marks a top.

On the other hand, the tear that gold's been on together with lurching markets and that $2,090 Point and Figure chart target still hangs out there. The GOLD PRICE could just as well rise tomorrow as fall.

Support at $1,820/$1,825 now becomes the pivot. If gold doesn't hold that line, it could drop to $1,720. If that doesn't hold, then the GOLD PRICE has a bigger correction in mind and we have to reckon with $1,650 or even $1,560. As yet, gold has given us no signal it will reach these levels, they are merely targets that hang at the horizon when we lift our eyes.

The SILVER PRICE hit a high above 4410 yesterday, then rolled over and headed down. Opened in New York around 4275c, rose to 4380c by 11:00, then sank steadily. By Comex close silver had lost 104c to close at 4228.1c. In the aftermarket silver has sunk to 4185c, and clearly 4150c supports it here.

The SILVER PRICE has also posted the first half of a key reversal. A close below 4100c will suck silver toward its 50 day moving average at 3813c. Once again I warn, I remind, a key reversal is not in place until BOTH parts appear.

Better brace for a rough ride, though.

Did y'all ever seen those black and white cartoons from the 1930s? Markets now reminder me of those cartoons, one where a huge crowd of people is milling around on the deck of an ocean liner. Suddenly, they all run to one side and the ship rolls over that way. Then they reverse and run to the other side of the ship and she rolls over in THAT direction. It's really comical.

Thus today we saw the great ocean liner SS Stocks heel over nearly keel up, rising 322.11 points (2.97%) to 11,176.76. The SS S&P500 rolled with it, gaining 38.53 (3.43%) to 1,162.35.

Most likely stocks have turned up for a brief while. Momentum indicators (RSI and MACD) appear to have turned up, and between 8 August and 19 August the Dow has made a pair of higher highs. (That also means that a close below 10,801, the 19th's intraday low, gainsays any rally.) No, nothing fundamental has changed, the passengers are merely running to the other side of the boat. None of them see the iceberg ahead.

Stocks must climb a long ways merely to confirm they have turned up by crossing above their 20 day moving average (11,436 right now). 50 DMA and 200DMA are fractions of a point from making the Death Cross -- 50dma at 11,990.06 and 200 at 11,989.17. Death cross has mainly a an effect on morale, which stocks have very little of right now.

Stocks -- the thin hulled liner plying the iceberg laden waters of the Northern Investment Ocean.

The US dollar turns very slowly when it turns up. It's been seeking to claim that accomplishment since May, and wallows along still. Today the US dollar index cropped 23.4 basis points to 73.84, but this remains in its 73.4 - 75.5 trading range. Between 25 July and 18 August the dollar has made a double bottom at 73.40, so that should yield strong support now.

The Euro rose 0.55% today to 1.4440 -- maybe because Dominique Strauss-Kahn found the charges against him dropped? As good a reason as any, since none other of substance materializes. Stinky euro is trading in a 1.4540 - 1.3950 range, floating like a man with his arms bound behind his back and a large anvil tied to his feet. Europe's troubles have not waved good-bye, and happy days are not here again.

Over in Japan the Nice Government Men are going to have to take measures with the yen, or lose their place at the buffet in Basel next month when the central banks representatives meet at the BIS. Today the yen closed at 130.40c/Y100, up 0.22% (Y76.69/$). Yen's strong as a spoonful of wasabi, and no saké in sight.


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, August 22, 2011

Gold Price Hits $1900

Gold Price Close Today : 1,888.70
Change : 39.80 or 2.1%

Silver Price Close Today : 43.32
Change : .89 or 2.1%

Platinum Price Close Today : 1,905.70
Change : 30.80 or 1.6%

Palladium Price Close Today : 764.85
Change : 16.30 or 2.1%

Gold Silver Ratio Today : 43.60
Change : 0.01 or 1.00%

Dow Industrial : 10,854.65
Change : 37.00 or 0.3%

US Dollar Index : 73.99
Change : -0.17 or -0.2%


Editors Note: Franklin Sanders has not published any commentary today. If publishes it later it will appear here.



Friday, August 19, 2011

This Week the Gold Price Told us Very Loudly that it Intends to Make a New Leg Up

Gold Price Close Today : 1,848.90
Gold Price Close 12-Aug : 1,740.20
Change : 108.70 or 6.2%

Silver Price Close Today : 4242.8
Silver Price Close 12-Aug : 3910.1
Change : 332.70 or 8.5%

Gold Silver Ratio Today : 43.577
Gold Silver Ratio 12-Aug : 44.505
Change : -0.93 or -2.1%

Silver Gold Ratio : 0.02295
Silver Gold Ratio 12-Aug : 0.02247
Change : 0.00048 or 2.1%

Dow in Gold Dollars : $ 120.95
Dow in Gold Dollars 12-Aug : $ 133.86
Change : $ (12.92) or -9.6%

Dow in Gold Ounces : 5.851
Dow in Gold Ounces 12-Aug : 6.476
Change : -0.62 or -9.6%

Dow in Silver Ounces : 254.96
Dow in Silver Ounces 12-Aug : 288.20
Change : -33.24 or -11.5%

Dow Industrial : 10,817.65
Dow Industrial 12-Aug : 11,269.02
Change : -451.37 or -4.0%

S&P 500 : 1,123.53
S&P 500 12-Aug : 1,178.81
Change : -55.28 or -4.7%

US Dollar Index : 73.993
US Dollar Index 12-Aug : 74.579
Change : -0.586 or -0.8%

Platinum Price Close Today : 1,876.00
Platinum Price Close 12-Aug : 1,796.00
Change : 80.00 or 4.5%

Palladium Price Close Today : 750.00
Palladium Price Close 12-Aug : 743.55
Change : 6.45 or 0.9%

This week the GOLD PRICE told us very loudly that it intends to make a new leg up. Not only did it gain US$108.70 this week for a new all time dollar high today (3 in the last 3 days), but the GOLD PRICE also closed at a new high in Euros (e1,287) and yen (Y141,700). Another face of the new phase: the GOLD PRICE is climbing against ALL fiat currencies.

Y'all need not remind me how overbought gold is. The RSI and MACD both tell me that. But yesterday to all the rest of the panic, Venezuela's Hugo Chavez ordered foreign depositories to send Venezuela's gold home (Venezuela is the world's 15th largest gold holder), 211 metric tonnes or 6.783 Million Ounces (Moz). Bank of England holds 99 tonnes of that (3.183 Moz), while the rest is scattered amongst the usual suspects: JP Morgan Chase, Barclays, HSBC, Standard Chartered, BNP Paribas, and Bank of Nova Scotia. Some speculate that Chavez has precipitated a "short squeeze," i.e., is forcing those short gold to deliver. Nothing quite drives the price of anything like shorts scrambling to deliver, covering at any price. I am of course not accusing ancient, hoary, and respectable institutions like the BoE or JP Morgan or BNP of shorting gold they were supposed to be storing -- why, perish the thought! Yet how else does one account for gold's perpendicular rise?

Cheery Chavez also nationalized all the private gold producers in Venezuela, which casts a pall over the gold mining community. Also reminds owners of gold stocks what the words "political risk" mean. Bound to make it harder for miners to borrow and float shares, if only for a while.

So today the GOLD PRICE rose $30 to a new all time high of $1,848.90. Yes, it's high, parabolic, and overbought, but how much higher will panic drive it? $2,000? $2,050? $2,100? Higher? I bought some at $1,854, and will buy more.

The SILVER PRICE gobbled down a colossal 332.7c this week, rising 8.5% to close Comex today 4242.8. I knew once it got thru 4100c resistance it would jump, but 174.1c in one day? Time I got up this morning SILVER had already burst thru 4150c (about 6:45 New York time), then it shot clean to 4250c. It backed off a little on the open, rose to 4250c again, reacted after testing that ceiling, then bulldozed from 4140c the rest of the day to trade at 4289c in the aftermarket.

Technically silver's close today takes it above the last intraday high (4229c) and clears the way for another test of 5000c. Unlike GOLD -- get this -- the SILVER PRICE is NOT overbought and has only this week crossed its 20 DMA (3988c). Plenty of room for a sprint to 5000c.

Panic has grown with the week. The GOLD PRICE rose an astounding $108.70 or 6.2%, while the SILVER PRICE rose 332.7c or 8.5%. Dow lost 4.7%, S&P500 4.7%. We are now seeing volumes near what we saw in the 2008 panic, and wholesalers are stretching out delivery.

Stocks fell off the cliff at 11,300 on Thursday. Hard for me to ken how anyone might still argue stocks are coming back in the next decade or so. Stock decline looks like a completed 4 waves beginning another down leg.

Dow in Gold Dollars passed a new milestone this week, falling below G$$124.03 (6.00 ounces). Closed today at G$120.95, or 5.851 oz. Let me make clear what that means. For 5.851 oz you could buy one share of all the stocks that make up the Dow Jones Industrial Index -- 10,817.5/$1,848.90 = 5.851.

Dow in silver ounces likewise has fallen to a new low. Now you need on 254.96 ounces to buy the Dow, while at the top in 2001 you needed 2,560.

Do y'all understand that we are entering a new phase of development? That everything is moving faster, more violently, with more volatility? You must protect yourself. Ask, and linger over the meditation: with the stock market collapsing, WHAT WILL BEN DO? Will he stay on the wagon, or will he reach for that jug labeled "QE3"?

Stocks -- your ticket to a retirement under an interstate overpass in a splendid cardboard shack with access to fine dumpster dining.

One face of the new phase is that instead of falling with stocks in this panic, GOLD has risen, meaning that flight capital is fleeing into gold this time, not US dollars. More astonishing, SILVER is accompanying GOLD up, not following stocks down. O, brave new world!

Losing a modest 25.1 basis points, the US DOLLAR INDEX now flirteth with 74, in fact, 73.993. It dropped 0.32% today, but point to watch is that it seems to have bottomed Wednesday and today confirmed that bottom. Whichever Nice Government Men are managing it are laboring mightily to keep it beneath its 20 day moving average, now 74.28. Unless it breaks 73.40, they'll be hard pressed to corral it, faced by a panic.

Euro rose 0.45% today to close 1.4394, but remains in a downtrend. Only closes above 1.4697 and 1.4940 can change that. Personally, I think y'all will see 1.2000 first. Yen made an new all time intraday high today and closed at 130.65c/Y100 (Y76.54/$). Pity the NGM working for the Bank of Japan.

On 19 August 1848 the gold discovery in California was reported in the New York Herald.

YESTERDAY I encouraged y'all to go back and review the crisis recommendations I made earlier. The date was wrong, so I am reprinting the recommendations from 5 August below:

HERE ARE THE RECOMMENDATIONS FROM 5 AUGUST 2011. Europe will drag the US into crisis. Here are my suggestions for self-protection:

1. Get liquid. Pay down debt as much as you can. Sell non-performing investments, like stocks, or investments that will suffer from depression or inflation.

2. Close out leveraged positions. Markets are way too volatile for that.

3. Hold on to silver and gold.

4. Hang on to cash anticipating great bargains in a crisis. Remember gold went to $700 and silver to 880c. Gold/silver ratio went to 84, offering a great gold to silver swap. Not expecting those numbers again, but we might see the analogs.

5. Fill up propane tanks, home gasoline or diesel tanks.

6. Stock up on food -- long term storage food, not smoked oysters and tomato soup. Rice, for instance. Dehydrated food. MREs.

7. Stock up on ammo.

8. Get out of the city, or at least have a country place waiting to receive you.

Don't be fooled by my calm words, either. Y'all are reading the equivalent of an air raid siren, and y'all had better run for cover.

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, August 18, 2011

Comex Gold Price Closed at $1,818.90, up $27.70 and Another New All Time High

Gold Price Close Today : 1818.90
Change : 27.70 or 1.5%

Silver Price Close Today : 40.687
Change : 0.337 or 0.8%

Gold Silver Ratio Today : 44.70
Change : 0.313 or 0.7%

Silver Gold Ratio Today : 0.02237
Change : -0.000158 or -0.7%

Platinum Price Close Today : 1847.00
Change : 0.00 or 0.0%

Palladium Price Close Today : 757.00
Change : -19.00 or -2.4%

S&P 500 : 1,140.65
Change : -53.24 or -4.5%

Dow In GOLD$ : $124.91
Change : $ (6.76) or -5.1%

Dow in GOLD oz : 6.042
Change : -0.327 or -5.1%

Dow in SILVER oz : 270.13
Change : -12.66 or -4.5%

Dow Industrial : 10,990.58
Change : -419.63 or -3.7%

US Dollar Index : 74.21
Change : 0.532 or 0.7%

Fueled by unabated panic, the GOLD PRICE about 6:00 a.m. pushed through $1,800 and by 10:00 stood over $1,825. Backed off a bit till noon, then began advancing again. Comex closed at $1,818.90, up $27.70 and another new all time high. Top of this channel is someplace around $2,000. When I saw gold over $1,825, I just picked up the phone and bought a bunch. Sure, sure, that's chasing a market, but what else can you do when after a 2-day close over the old high it breaks into new high territory? You buy it, and close your hanging jaw.

Before I bought GOLD, though, I bought lots more SILVER. Not as strong as gold, but all it needed to do was break through that 4000c resistance, and there it stood at 4070c. Argue with the tape if you want to, but I don't. Yes, silver still has a tough row to hoe at 4100c and 4200c, but get the picture: it is FOLLOWING gold, not moving against it. Behold, something new under the sun!

Big trouble coming. Go back to my 29 July commentary and 16 August commentary and re-read the preparations listed there. Call me Chicken Little if you like, 'twon't bother me cause I've been vilified by experts, but take that list seriously. Remember those riots in London.

DID SOMEBODY MAKE AN ANNOUNCEMENT TODAY THAT THE WORLD IS CLOSING DOWN? I looked for some news item that might have sent the GOLD PRICE screaming and stocks careening. I couldn't find a single item that would launch a panic. Euro didn't even get beaten up badly until after New York Opened.

Whatever the catalyst, it threw US stocks down enough to qualify as one of the 20 or 30 biggest point moves ever, down 419.63 (3.68%- owch!) to 10,990.58 in Dowville, with the S&P500 swooning even worse by 53.24 points (4.46%) to 1,140.65. Talking heads are as stumped as I am, talking about "growing fears of global recession" on bad US economic data and more bad news from euro-banks.

IF YOU STILL HAVE STOCKS, GET OUT NOW! Put the proceeds into silver and gold, and take everything you've ever learned about "diversification," by which the experts all mean "buying different stocks" and throw it out in the carport and beat it to death with your ball peen hammer.

If stocks are the answer, the question must be, "How can I lose LOTS of money quickly without buying lottery tickets?"

Do any of y'all remember my saying not too long ago that stocks had lost more than 80% against silver and gold since 2001 and 1999, and would lose another 80% before stocks' bear market and metals' bull market ends? Do I remember that, or am I mistaken?

Today the Dow in Gold Dollars stands at G$124.91 (6.042 oz) and the Dow in Silver Ounces at 270.13. Y'all write that down someplace, and hide and watch.


Y'all want a real laugh? The Philadelphia Bank Index, Tell me what kind of strength that shows.

US Dollar index slapped 'em all in the face today by jumping 53.2 basis points, up 0.68% to 74.206, back from the bottom of the range to the middle. One wonders idly how many zillion dollars the Nice Government Men had to sell today to keep the dollar from rising through 75.50.

Mistake me not! Long term the dollar is a cooked goose, a dead duck, a terminated turkey, a poached peacock. But short term it has yet enough strength to pull in money in a panic. Proof? The yield on the 10 year treasury note (inverse of the note's value) dropped again today, nay, gapped down and plunged.

But hark! Is that a double top that the 30 year treasury bond is forming with the September 2010 high? Would that be a harbinger of great depths to come, of wailing, weeping, and gnashing of teeth as the Harbor of Dollar Refuge becomes the Maelstrom of Vanishing Value?

Euro, to put it almost politely, got the snot slapped out of it today Closed down 0.58% at 1.4341, gapped down in fact, and now resteth upon its 20 dma, preparatory to plummeting toward the Earth's Core. Yen remains suspended high above the earth at 130.57c/Y100 (Y76.58/$).

On Monday, 22 August I will be speaking for the Campaign for Liberty in Memphis at Jason's Deli, 3473 Poplar Ave. Suite 102, near Poplar and Highland. Speech should start shortly after 6:30 p.m.

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.



Wednesday, August 17, 2011

Silver and Gold Prices Headed Higher - Closes Below $1,720 and $39 Would Gainsay That

Gold Price Close Today : 1791.20
Change : 8.80 or 0.5%

Silver Price Close Today : 40.350
Change : 0.529 or 1.3%

Gold Silver Ratio Today : 44.39
Change : -0.369 or -0.8%

Silver Gold Ratio Today : 0.02253
Change : 0.000186 or 0.8%

Platinum Price Close Today : 1847.00
Change : 26.00 or 1.4%

Palladium Price Close Today : 776.00
Change : 16.00 or 2.1%

S&P 500 : 1,191.82
Change : -0.94 or -0.1%

Dow In GOLD$ : $131.46
Change : $ (0.81) or -0.6%

Dow in GOLD oz : 6.359
Change : -0.039 or -0.6%

Dow in SILVER oz : 282.29
Change : -4.14 or -1.4%

Dow Industrial : 11,390.57
Change : -15.36 or -0.1%

US Dollar Index : 73.75
Change : -0.257 or -0.3%

Let us delve first into PLATINUM and PALLADIUM before we come to the adult precious metals. The PLATINUM PRICE today reached its July peak ($1,823), which MIGHT be the first warning of a new rally. MIGHT because in June it peaked at $1,849.40 and at end-April $1,889.50. Contradicting higher prices is the 50 dma crossing under the 200 dma four days ago. Not hopeful, but since they are cruising along flatly together, maybe not fatal.

Palladium's chart looks a lot the NASDAQ or the Dow. Hit a new high for the move at 850.20 on 1 August, then waterfalled like Niagara with ne'er a pause to 706. Today at 776, only $11 below the 200 dma (764.63). This market has more obstacles to overcome than a one-legged pole-vaulter.

Bottom line is that as a harbinger of higher GOLD and SILVER PRICES, palladium is terrifying and platinum is ambiguous. Confused? Don't feel lonely.

The GOLD PRICE made a second close above its previous close, and a 2-day close at a new high is a fairly safe signal of a breakout. I'd like to see it close above $1,800 tomorrow to confirm that, however. The GOLD PRICE has now done everything needful to breaking out in a new rally, EXCEPT posting a new intraday high. Today's intraday high was $1,794.55 while Comex closed nearly that high, up $8.80 to $1,791.20.

Mercy! GOLD looks overextended, the MACD is high enough to give Arnold the Giant a haircut, and the RSI is way overbought. Still, as recent history has shown us, the gold price can remain overbought for a long time.

I covered some little shorts (against inventory) in SILVER today. Just couldn't stand a breakout over 4000c, and Comex closed up 52.9c to 4035c. Ratio dropped a tee-tiny bit from 44.750 to 44.391.

Really big hurdle for the SILVER PRICE is 4100c, then 4200c. SILVER now stands above its 200 dma (3428c), 50 dma (3765c), and even its 20 dma (3970c). Momentum plainly points up, and other indicators are nothing near overbought. Plenty of room for the SILVER PRICE to jump for the ceiling. Only caution is a little rising wedge building on the chart since 8 August, which might break out downside. However, in BULL markets these rising wedges sometimes break out upside, as the stock market painfully taught me in the last 1990s.

BOTTOM LINE: SILVER and GOLD PRICES headed higher. Closes below $1,720 and 3900c would gainsay that.

You wonder how people can go on believing in myths like "the efficiency of markets" when so many people stay on the wrong side of the market by clinging to their own myths and misconceptions. Still, they do. But that's no surprise. There are also lots of people who believe you can get justice in US courts.

Stock investors are being punished soundly for their faith. Dow today dropped 15.36 (0.13%) to 11,390.57 and the S&P500 dropped 0.94 (0.08%) to 1,191.82. People stay in stocks although that chart is the worst since 1987's crash. No, it's worse, topped by a huge head and shoulders or Megaphone of Death, but whichever you choose will kill both optimism and hope. Fiddling around this 11,450 - 11,400 level harkens back to resistance from November 2011. The Death Cross where the 50 dma (now 12,074.83) drops below the 200 dma (11,996.38) is fast approaching. That will point momentum down beyond all quibble.

STOCKS -- the Fokker Tri-plane of Investing Aeronautic Design.

US Dollar index dropped to the lower limit before it breaks down, 73.753, down 25.7 basis points or 0.33%. Previous low was 72.82. If so, low before that was 73.42, and that probably would stop it. With all the fear scourging the world, hard to believe the US dollar is dropping. Whoa! What's that sulfur smell in the air? Could that be the Nice Government Men at work, holding down the dollar to help their beleaguered fellow-crooks in Europe? Good bet.

The euro, beset by traitors, speculators, and the justly-distrustful, managed to gain 0.12% today and close at top of its range, 1.4427. As Queen Victoria, that noted wit, might quip, "We are not enthused." All of it reeks of sulfur. Euro needs to cross 1.4700 to get my attention, and best 1.4900 to engage my belief. This is all a show, staged by the mushroom farmers for us mushrooms.

That buoyant Yen just can't be kept down. Today closed at what looks like a new all time high, 130.61c/Y100 (Y76.56 buys one US$). Funny thing is, nobody official wants it higher, but there it floats.


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, August 16, 2011

The Gold Price Might Finish the Year Above $2,000, the Silver Price Who Knows Where - Be Patient, be Calm, Hang On

Gold Price Close Today : 1782.00
Change : 26.90 or 1.5%

Silver Price Close Today : 39.821
Change : 0.523 or 1.3%

Gold Silver Ratio Today : 44.75
Change : 0.089 or 0.2%

Silver Gold Ratio Today : 0.02235
Change : -0.000045 or -0.2%

Platinum Price Close Today : 1821.00
Change : 8.00 or 0.4%

Palladium Price Close Today : 760.00
Change : 16.00 or 2.2%

S&P 500 : 1,192.76
Change : -11.73 or -1.0%

Dow In GOLD$ : $132.31
Change : $ (2.92) or -2.2%

Dow in GOLD oz : 6.401
Change : -0.141 or -2.2%

Dow in SILVER oz : 286.43
Change : -5.77 or -2.0%

Dow Industrial : 11,405.93
Change : -76.97 or -0.7%

US Dollar Index : 74.00
Change : 0.162 or 0.2%


Apparently suspicion, fear, and panic continue to drive SILVER and GOLD PRICES, which refuse to collapse and crawl into a cave.

After gold's fall four days ago we had a right to expect lower prices today, but forget the follow-thru. the GOLD PRICE added $26.90 for a new all-time high Comex close at $1,782. This is nice, but high was $1,786.40, not $1,815. Any close above that takes GOLD higher. Any close below that leaves gold accused with reason of intending to move lower. $1,720 remains the must-hold point.

Now delving into opinion instead of fact, it seems to me that gold proved awfully strong today. Of course, that could be nothing more than typical B-wave strength that can fool almost anybody. Reactions usually trace out in an A-down, B-up, and C-down, and B-up is notoriously strong and seductive. You can only tell the difference when the break the boundary upside or downside, but the weight of experience leaves this move suspect.

A close over $1,800 gainsays that and means the GOLD PRICE will keep on rallying.

The SILVER PRICE worked manfully all day to climb and even reached 4013c, but at Comex close fell back to close up only 52.3c (1.33%). Good progress, yes, but not a victory over 4000c resistance, and above that lies 4100c with even stronger resistance.

All this leaves me nervous because a financial panic can overwhelm all reason and experience and take markets wherever it listeth. Still, I have to follow the main chance and expected outcome.

SILVER and GOLD PRICES remain in a long term bull market. That will last another three to 10 years. The GOLD PRICE might finish the year above $2,000, the SILVER PRICE who knows where. Be patient, be calm, hang on.

Nicholas Sarcophagus of France and Angela Ferkel -- no, no, Merkel -- of Germany are top contenders for the Foolscap Crown of Dimwit of the week. In press releases from their summit they advocated a transactions tax on equities, derivatives, and currencies, which promptly tanked European equity markets.

Wait! That's not all. It gets dumber and meaner. They also want "common governance" -- read, "top-down centralized control -- in the Eurozone, forcing member nations to adopt a deficit limiting rule into their constitutions. Good-bye fiscal independence for member nations, and with it all other independence. As Patrick Henry trenchantly observed, there are only two powers worth having, the power of the purse and the power of the sword. Give up one and you won't hang on to the other.

STOCKS today backed off 76.97 points (0.67%) to 11,405.93. S&P lost 11.73 (0.97%) to 1,192.76. Nothing in nowhere-land. Stocks are trying to climb up off the floor of 10,600 and reach for their 200 day moving average at 11,994.95. Actually, they've fallen so far so fast the 20 dma (11,827) now stands below the 200 DMA, a sign confirming momentum now points downward. This won't end well for stocks.

Stocks -- the Maginot Line in the 2011 Inventory of Investment Defensive Fortifications.

US DOLLAR INDEX gained 16.2 stubborn basis points to end at 73.998, not quite 74. Weighty here is the dollar's refusal to drop below 73.80. Wants to move higher. Euro gave up some of yesterdays gains to close 1.4404, down 0.28% and destined for lesser things. Japanese nice government men have a problem on their hands, a yen that refuses to close below 130c/Y100 (Y76.92/$). Closed today 130.23, up 0.8%.

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, August 15, 2011

Gold Price Today Simply Refused to Take a Back Seat

Gold Price Close Today : 1755.50
Change : 15.30 or 0.9%

Silver Price Close Today : 39.298
Change : 0.197 or 0.5%

Gold Silver Ratio Today : 44.67
Change : 0.166 or 0.4%

Silver Gold Ratio Today : 0.02239
Change : -0.000084 or -0.4%

Platinum Price Close Today : 1813.00
Change : 17.00 or 0.9%

Palladium Price Close Today : 744.00
Change : 0.00 or 0.0%

S&P 500 : 1,204.49
Change : 25.68 or 2.2%

Dow In GOLD$ : $135.22
Change : $ 1.37 or 1.0%

Dow in GOLD oz : 6.541
Change : 0.066 or 1.0%

Dow in SILVER oz : 292.20
Change : 4.00 or 1.4%

Dow Industrial : 11,482.90
Change : 213.88 or 1.9%

US Dollar Index : 73.86
Change : -0.657 or -0.9%

GOLD PRICE today simply refused to take a back seat. Friday it made a low at $1,724, but today the low came at $1,732.20. After closing Comex at $1,755.50, up $15.30, it relentlessly elevated in the aftermarket to $1,766.10, the high for the day.

Let's talk about maximum downside. Chart shows a gap at $1,675, so that might be a target. Before that, $1,720 is stubborn support. Further down, $1,625 will catch gold, then below that lies the 50 DMA at $1,587.54.

However, I am not yet willing to count the panic past and GOLD defeated. Any close over $1,800 turns gold's face skyward. A close below $1,725 turns it down decisively.

SILVER on Comex closed at 3929.8c, up 19.7c, but that tells only a short part of the tale. After Comex closed the SILVER PRICE  kept on bulling ahead, nearly 60 more cents to 3991, well above the 20 day moving average at 3965c. I remind y'all the 20 DMA serves as the trip wire for POSSIBLE upmoves. Possible because the crossover must be confirmed by higher closes.

The SILVER PRICE keeps on refusing to roll over and play dead. I understand that this sort of range trading frustrates intensely, but we merely have to endure it.

Y'all ought to be accumulating both silver and gold. Forget about corrections -- they will come and go, 5%, 10%, or 30%, yet we don't look at those, but at the unseen goal, the triple, quadruple, or quintuple. Ride the primary trend, forget about the rest.

In an example of near-perfect government stupidity, France, Spain, Italy, and Belgium have banned short selling of financial (read "bank") stocks. Of course, determined investors will find other creative ways to short the sector, maybe even by shorting the euro, but statistics from earlier bans show that they are hopelessly ineffective to stop price slides. Worse yet, bans add uncertainty to the market and cripple the market's ability to discover an accurate price based on true value.

As usual, the world's bank-controlled puppet governments act to cripple markets and prop up the banks. Were I a depositor in French, Spanish, Italian, or Belgian bank I'd pull out my money so fast the suction would rip the paper off their walls. The ban virtually guarantees that the banks are so rotten they cannot withstand the action of a free market. Otherwise, why protect them?

If governments subsidized air, we'd all be suffocating in ten days. I'm only a natural born fool from Tennessee, and even I know that.

STOCKS had a big day, cavorting like goats in August up 213.88, up 1.9% on the Dow to 11,482.90. S&P cavorted, too, up 25.68 or 3.03% to 1,204.49.

Did this surprise y'all? After a waterfall the size of Victoria Falls, there'll come some kind of bounce. But I will warn y'all that the waterfall has not reached its bottom pool, but is only bouncing off the rocks. Reaction may reach 11,860, maybe even the 200 dma 11,993.51, maybe even 12,000, but gravity has stocks firmly in hand now, and will work his will.

I bet a lot of y'all don't know about goats in August, do you?

Stocks -- they are the pool of cool alkaline water in the Investment Desert.

The US DOLLAR INDEX tumbled 65.7 basis points today (0.85%) to 73.864. That fits the Nice Government Men's need to contain the dollar's rise and the euro's fall and the yen's rise. However, it doesn't change the dollar chart. Last low was 73.82, one before that was 73.42, and wanting a close below that, the dollar remains in an embryonic uptrend.

The euro, the currency with the electrical connections in its neck like the Frankenstein monster, found an outlet today, plugged in, and jumped 1.35% to 1.4442.

Japanese Yen today dropped a tee-tiny bit, to 130.17c/Y100 (Y73.82/$). Still near all time highs.

On 15 August 1971 President Tricky Dick Nixon imposed a 90 day wage and price freeze, a 10% import surcharge, and closed the gold window ending the convertibility of dollars into gold for foreign nations under the Bretton Woods Agreement. Bretton Woods was worse than a three-legged mule, expensive to feed with no real benefit, but it was an agreement, a word-giving. Nixon launched the nations of the world of floating exchange rates and wholly irredeemable fiat money. Si monumentum quaeris, circumspice.
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, August 12, 2011

The Gold Price is Climbing Against Every Fiat Currency and Becoming the Premier Alternative Money

Gold Price Close Today : 1,740.20
Gold Price Close 5-Aug : 1,648.80
Change : 91.40 or 5.5%

Silver Price Close Today : 3910.1
Silver Price Close 5-Aug : 3819.7
Change : 90.40 or 2.4%

Gold Silver Ratio Today : 44.505
Gold Silver Ratio 5-Aug : 43.166
Change : 1.34 or 3.1%

Silver Gold Ratio : 0.02247
Silver Gold Ratio 5-Aug : 0.02317
Change : -0.00070 or -3.0%

Dow in Gold Dollars : $ 133.86
Dow in Gold Dollars 5-Aug : $ 143.65
Change : $ (9.79) or -6.8%

Dow in Gold Ounces : 6.476
Dow in Gold Ounces 5-Aug : 6.949
Change : -0.47 or -6.8%

Dow in Silver Ounces : 288.20
Dow in Silver Ounces 5-Aug : 299.97
Change : -11.77 or -3.9%

Dow Industrial : 11,269.02
Dow Industrial 5-Aug : 11,457.93
Change : -188.91 or -1.6%

S&P 500 : 1,178.81
S&P 500 5-Aug : 1,201.16
Change : -22.35 or -1.9%

US Dollar Index : 74.579
US Dollar Index 5-Aug : 74.489
Change : 0.090 or 0.1%

Platinum Price Close Today : 1,796.00
Platinum Price Close 5-Aug : 1,719.00
Change : 77.00 or 4.5%

Palladium Price Close Today : 743.55
Palladium Price Close 5-Aug : 740.10
Change : 3.45 or 0.5%


Big surprise this week was the SILVER PRICE, refusing to drop below 3700c. The GOLD PRICE gained -- choke! -- 5.5%. Stocks did worse than 1.6% implies, dollar stayed flat, and platinum shot up 4.5% and left palladium in the dust.

Yesterday I recounted to y'all that the gold 20 franc coins, favorite of gold-hungry French investors, were carrying huge premiums in Europe ($28 - $35 versus $5 at wholesale here). Last night on the way home I heard a report on National Proletarian Radio that French authorities were warning those casting doubt on the solvency of French banks that they'd better not. French bank stock indices were hit hard this week. Clearly the French, who in my 64-year old memory have undergone at least one currency reform and loads of inflation, are running on the banks and swapping euros for gold. To what degree, I haven't a clue, but a few days ago something else occurred that brought to mind the French proverb, "Nothing is confirmed until officially denied." A couple of rating agencies made showy announcements that French government debt was STILL rated AAA. Right, but who asked you? Unless there's a problem, this resembles an astronomer announcing that the sky is still blue.

Y'all need to face the likelihood that the GOLD PRICE made at least an interim top this week. We will know by the progressive depth of the reaction how far it will carry. If GOLD doesn't break $1,720 (low today at $1,723.95) then it will piddle sideways a few days and take off again, rushing over $1,800.00

On 10 August the GOLD PRICE made a new all time high close at $1,781.30. In the aftermarket that day it traded above $1,810. If it breaks $1,720 it might fall to $1,675. A close above $1,781.30 contradicts all that and tells you gold is making yet another leg up.

Today the GOLD PRICE ranged from $1,766.46 to $1,723.95 and closed Comex $8.60 lower at $1,740.20. Gold added nearly $100 this week.

The NATURE of gold's situation has changed. In its first wave up from 2001 - 2008, it moved glacially, adding only a tiny bit at a time, struggling to attract investors. It peaked in March 2008, then gave up 30% by November. Then it began the next leg up, and this one moves with much greater speed, violence, and volatility.

The NATURE of the economic situation has changed, calling into question all the old economic verities like "US debt is the lowest risk investment." Sovereign debt around the world is being scrutinized, and investors don't like what they see. The old Keynesian paradigm -- government managing the economy and borrowing and spending its way into prosperity -- is crumbling like the Berlin Wall and that other brand of socialism. Oh, it hasn't fallen off the throne yet, but it's being pushed. The Tea Party, the endemic and insuppressible financial and fiscal crises, the rotten banking structure, debt downgrades, bailouts, all of these are the fevers, chills, and icy sweats of a dying system. Its death is hastening, hastening. Pray that liberty succeeds it, and not a worse tyranny.

In any event, all these forces are pushing gold higher and higher, and in the next three to 10 years you will see prices at levels you would never have dared dream of, let alone mention, in 2001. Shuck out of stocks and dollar denominated investments (CDs, savings accounts, annuities, bonds) and put the proceeds into silver and gold. There's still time.

Yet take not MY word for this argument.  Look at the July break out with a breakaway gap at E1,090 and run to E1,276 yesterday.


Turn not yet away, gentle readers. Throw up Gold in Yen, and mark and inwardly digest the breakout 1 August above Y127,500, and follow the climb to Y139,580 yesterday.


My point? Gold is climbing against every fiat currency. Gold is becoming the premier alternative money. Slowly, slowly the public is repudiating those central bank currencies in favor of gold. This, too will speed up.

As panic put jet fuel in gold's tanks, it pushed the SILVER PRICE down, all the way back to 3700c on Tuesday. Yet silver did not break and fall to its 200 dma (now 3404) but fought back and today gained 44.5c to 3910.1c. I must still accept lower prices as the most likely outcome, UNLESS silver closes above 4100c, then 4200c quickly.

Countering that view is silver's uptrend -- yes, Uptrend -- since the June 27 low at 3338c. Of course, after a week of parabolic upward GOLD action, I'd be foolish not to brace myself for a correction. But mercy! of all the gold and silver bulls in the world, I have been kicking against the goads. Silver and gold have consistently outperformed my expectations this year. Market's left me a little punchy, but determined to buy more and more silver and gold on every little dip.

The gold/silver ratio is one fact causing me to look for lower silver. The previous post-May correction high had been 44.584 on 28 June. On 9 August it hit 45.938, which whispers that the ratio will move higher still. Way things are going, that might not be due to silver falling, but to gold blasting away topside, powered by more panic.

I watch. I wait. I am glad that so many of y'all swapped out of silver into gold, because now that move looks very slick. Let's hope it pans out with a higher ratio.

BOTTOM LINE: Long term bull market in silver and gold needs me to defend it like two lionesses need my help with a wildebeest. We may be in for a greater or lesser correction, but the primary trend remains up in a bull market.

Here's what the Dow posted this week: Down 634.76, up 429.92, down 519.83, up 423.37, up 125.71 for a net loss of 175.59. Intraday low for the week was 10,604.70, which fulfilled my target of 10,900 from the head and shoulders and 10,700 from previous trading and lateral support. Wherefore we can guess that stocks will mount a sickly rally from here. They are far below their 200 dma (11,991.67), and could reach that or a little higher. Volatility this week was due certainly to panic in the market generated by US debt downgrade (insubstantial but damaging to psychology) and European sovereign debt crisis. No doubt volatility was supercharged also by the yankee government's Plunge Protection Team.

Be all that as it may, the Dow is doomed to move much, much lower, but not immediately. Close below 10,700 gainsays my cheery optimism and turns the Dow down into the nether regions. If you are one of those laggards who still owns stocks, better seize ANY rally like a seat on the last train out of Moscow in November 1917.

STOCKS -- they are the non-nutritious filler in the Box of Investment Breakfast Cereal.

The Dow in Gold Dollars' last low for the move that began in August 1999 came on 9 March 2009 at G$147.24 (7.123 oz). On 10 August the DiG$ made a new low for the 12 year move at G$124.40 (6.018 oz). Since August 1999 the Dow has lost 80% against gold, and will lose another 80%. Ditto silver.

US DOLLAR INDEX is range trading between 75 and 74.50. Panic spilling over from Europe is sending flight capital into the dollar, and the NGM of all the central banks, who work together like fire ants, are trying to keep the euro (destined for US$1.20) afloat and keep the Yen from rising to the sky. Expect further dollar rally. Break above 75.50 is the first tripwire of a rally, then a close over 76 and 76.75.

Euro, Frankenstein of currencies, rose 0.11% today to 1.4258. Downtrend remains unchallenged. Yen is knocking on all time highs.

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.