Monday, January 09, 2012

Gold Price Closed Today at $1,607.50 Won't Hang Around Here Long, Tomorrow Ought to Find Gold Higher

Gold Price Close Today : 1607.50
Change : (8.60) or -0.5%

Silver Price Close Today : 2874.90
Change : 9.60 cents or 0.3%

Gold Silver Ratio Today : 55.915
Change : -0.487 or -0.9%

Silver Gold Ratio Today : 0.01788
Change : 0.000155 or 0.9%

Platinum Price Close Today : 1427.50
Change : 9.50 or 0.7%

Palladium Price Close Today : 617.90
Change : -49.35 or -7.4%

S&P 500 : 1,280.70
Change : 2.89 or 0.2%

Dow In GOLD$ : $159.37
Change : $ 1.28 or 0.8%

Dow in GOLD oz : 7.709
Change : 0.062 or 0.8%

Dow in SILVER oz : 431.07
Change : -0.30 or -0.1%

Dow Industrial : 12,392.69
Change : 32.77 or 0.3%

US Dollar Index : 80.98
Change : -0.456 or -0.6%

For the past six months or so it seems that when the GOLD PRICE and SILVER PRICE close one-up/one-down, the next day they both rise. Now that doesn't happen every time, but enough to spook me. And today silver rose up 9.6% (piddling amount, 0.3%) to 2874.9c while gold fell $8.60 (1/2%) to $1,607.50.

The GOLD PRICE chart has that "I've built a mountain peak and now I'm skidding down the other side" look to it. It is skids past $1,605, 'twill skid a ways further.

On the other hand (there's that double-minded phrase again), if GOLD can clear $1,625/$1,630, why it would look strong as a garlic milkshake and attract all sorts of hangers-on.

Range for gold was not noticeably weak today, $1,623.20 to $1,606.43 against Friday's $1,631 to $1,608.75. Well, it won't hang around here long, and tomorrow ought to find gold higher.

The SILVER PRICE range today wasn't much different to Fridays (low came 6c lower, high 24c lower), but silver has established an ever so slight downtrend with support at 2860c. If silver breaks that mark, all its new found friends and cheerleaders will head for the exits like dope-dealers at a concert when the cops show up. But you let silver rise a dollar and pierce 2960c, and investors will be swarming silver like politicians around a money hole.

And I don't know which way it will break. I don't think either metal has a lot of downside left. They've withstood huge drops, from $1,927 to $1,522 (21%) and from 4950c to 2600c (48.3%). That just about does it.

But I am quixotically hoping still that silver will fall off the wall once more time while gold holds its place, and take that gold/silver ratio up to 57.5 for another swap. If it doesn't, well Sancho Panza and I will just go looking for more windmills.

Times come when you can pay little attention to markets but this isn't one of them. Watch silver and gold closely, looking for that ratio over 57.5, and use that as your trigger to buy more.

I manage a few accounts for some charitable entities, and I've been casting up accounts lately, looking over performance. Big question in my mind was the wisdom of keeping presently-unneeded cash in silver or gold (I don't mean cash you'll need in six months or less, or even 12 necessarily) rather than keeping it in a bank.

Some of these accounts add some gold or silver nearly every week, so they've bought this year high and low. And in years past. Since some of them are 12 years old and some only two or three, their performance varies a lot, but the lowest shows a 21% lifetime gain while the greatest has added 71%.

So y'all can leave your money in banks if you want, but that's sufficiently proved to me that my money ought to be held in silver and gold. Let the market rage, up and down, I'll just keep on converting those excess bucks into metals. Course, I ain't got one of them fancy money-manager decrees from Harvard or MYT -- I'm just a natural born fool from Tennessee, so what do I know?

Don't look now, but the US dollar index has started its next leg up. Oh, today it gave up 45.6 basis points (0.6%), but gave it up to 80.98, after Friday's close at 81.264. Dollar gained 164.4 basis points last week! Face it: y'all will be dealing with a strong dollar for several months, UNLESS it falls below 79.50.

The euro is no longer a contender, except in the "Fiat Currencies Race to the Bottom." It rose a bit today, 0.4%, to 1.2764, but this is virtual leagues from support around 1.3200. Market refuseth yet to believe that the euro has been fixed.

Yen is still playing with that bottom channel boundary line -- the bottom line of the channel it fell OUT of. Rose today 0.17% to 130.15c/Y100 (Y76.83/$1). Doubtful that the Nice Government Men in Japan would let the yen out from under their thumb.

STOCKS have stalled around 12,400. Dow today stirred a little bit, up 32.77 (0.27%) to 12,396.69. S&P500 rose about the same, 2.89 (0.23%) to close 1,280.70.

Back off and you'll see a gigantic broadening top, like unto the top posted in 1999 - 2000. Takes a long time for a market that big to roll over, but by the time it does it has built up lots of downside inertia.

I know there will be sirens aplenty, crooning in your ears that the worst of the recession is over and the economy will come back this year. All I can say is, Hide and watch.

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

- Franklin Sanders, The Moneychanger

© 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.

WARNING AND DISCLAIMER. Be advised and warned:

Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

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

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