Tuesday, January 17, 2012

The Gold Price Closed Up $24.80 to Close at $1,655.20

Gold Price Close Today : 1655.20
Change : 24.80 or 1.5%

Silver Price Close Today : 30.106
Change : 0.613 cents or 2.1%

Gold Silver Ratio Today : 54.979
Change : -0.302 or -0.5%

Silver Gold Ratio Today : 0.01819
Change : 0.000099 or 0.5%

Platinum Price Close Today : 1520.50
Change : 102.50 or 7.2%

Palladium Price Close Today : 648.90
Change : -18.35 or -2.8%

S&P 500 : 1,289.10
Change : -6.40 or -0.5%

Dow In GOLD$ : $155.14
Change : $ (2.96) or -1.9%

Dow in GOLD oz : 7.505
Change : -0.143 or -1.9%

Dow in SILVER oz : 412.62
Change : -10.23 or -2.4%

Dow Industrial : 12,422.21
Change : -48.80 or -0.4%

US Dollar Index : 81.18
Change : -0.332 or -0.4%

From its Friday close the GOLD PRICE rose $24.80 to $1,655.20, punching clean through $1,650 resistance as if it were wet cardboard. Way is now clear for the GOLD PRICE to test $1,680, which has been the target of this rise from the beginning.

GOLD's behavior at $1,680 will tell us plenty. If it cuts through $1,680 then $1,705, forget lower prices. If it backs off, then we will get a correction and that final kiss good-bye that is so safe to buy.

From here the GOLD PRICE must hold $1,640 to remain in its uptrend. May have shot all its ammo for the last leg and correct another day before it aims at $1,680.

The SILVER PRICE five day chart speaks with fork├ęd tongue. The peak last Thursday reached over 3060c, then silver fell to 2950c over the weekend. Began rising Monday (US was closed) and today rose 61.3c (from Friday) to close at 3010.6c on Comex. High came at 3056, about the same as last Thursday's 3060+.

Thus although the SILVER PRICE rise off the weekend low was muscular, it didn't pierce 3060, leaving a potential double top. Must penetrate that 3060c double top in the next two days or fall back. Today's low at 2988c matches earlier support around 2990, but strongest support lies at this weekend's 2950 low.

On a longer term chart this last three to five weeks' activity looks like a deadly rising wedge. Same shows up on gold's chart, too, by the way. Think of NASCAR, where they wave a yellow flag -- that's that wedge, until something happens to gainsay it.

Bottom line: this week gold should hit $1,680 and reveal its intentions for some time to come. Gold must hold $1,640 or contradict its uptrend. Silver must not fall through 2950c, and must pierce 3060c this week. Otherwise, we do more penance at lower prices.

I hope y'all enjoyed your day off yesterday. Markets sure did. GOLD, SILVER, and stocks were closed yesterday, hence y'all heard not from me.

That euro is making me nervous. Whenever the world and I are all expecting lower prices, the limit of the move is probably near. This is a warning that the euro has completed a down move and is due for a corrective rally at least. That also implies that the US dollar index might suffer a downfall, at least temporarily.

Fundamental causes driving the euro down have not changed -- banks still insolvent thanks to tons of unpayable government debt they hold, government insolvencies still not solved and distrust is spreading to the debt of the big countries now. Still, fundamentals only drive markets over the long term. Day to day, anything can happen.

Today the euro turned up. Rose 0.43% to 1.2729, and bumped its itty head on the overhead downtrend line (from the November breakdown). Yen also rose today, only 0.18% to 130.17c/Y100 (Y76.82/US$1), but also bumping on overhead resistance, and above its 20 DMA (129.30) and 50 DMA (129.05) and 200 DM (127.08). All headed up, so yen's momentum is up, too.

US DOLLAR INDEX stumbled over the weekend. From Friday's nearly 81.80 high it fell to a low today at 80.77, establishing that level as new support. Dollar's daily chart shows a double bottom before New York opened, then stronger prices all day. Closed at 81.80, down 33.2 basis points or 0.43%. However, like a vulture circling in the sky, the dollar lurched into its uptrend line (about 81.25). That may be a mere touch for further footing to another rise, or it might mark the advance's end. We'll see tomorrow, but I expect to see a higher dollar still. This rise ought to reach at least 82.50, maybe 83.50 before it ends. Anything higher points to prices above 88.70. Dollar is building what looks an awfully lot like a rising wedge, deadly to higher prices, so it must not close below 80.

Somewhere around 12,450 Dow lies a line of Enthusiasm and Despair. Below that point, investors run like Bugs Bunny from Elmer Fudd. Above that line they snort cocaine and buy. Dow hit 12,573.65 today, and bounced off like a mudball toward the ground. Closed at 12,482.22, up 60.16 (0.48%), not much of a gain for all that work.

S&P 500 rose 0.35% (4.57 points) to close at 1,293.66.

I know that minds greater and more insightful than mine, some of them paid big Wall Street money to think and talk, say that stocks will head higher. I know they are smarter than this natural born fool from Tennessee, but if somebody in pointy shoes and a shiny suit told you that pigs could fly or central bankers could think, would the shoes and suit make you believe him?

All I can see is a gigantic broadening top in the Dow, and a deadly rising wedge, blocked by double resistance about 12,600. BICBW.

Saw a letter from a subscriber in Steve Saville's The Speculative Investor. Subscriber complained that he was losing interest in watching the market because of the elephant in the living room, i.e., the financial crisis now roiling Europe that has been running since 2008. You just never know when that elephant will lift a foot and put it down, crushing all your expectation. Nor can you know the government/central bank reaction and its effect.

This elephant overhanging every market takes all the fun out of watching markets. It was already getting a bit tiring, watching folks proving the same thing over and over, or unsuccessfully trying to disprove it. I'm worn out with it, because it doesn’t mean anything any more, and nobody learns. The brainless apparatchiki and Keynesian ideologues who run central banks will -- PLAINLY -- respond in the same stupid way to every crisis, pushing bales of new money out the window. All that only prevents any real debt and bad investment liquidation that would cleanse the economy for renewed growth.

I'll say it: there is no hope for the government run economies of the world, and that's all of 'em. The only cures that would work -- sound money and economic freedom -- they will as likely embrace as a wino will begin drinking Coca-cola and hot tea.

I don't know about the rest of y'all, but I have no lease here in La-La-Land. I'm focusing my energy on building an economy that DOES work, and making an end-run around the government Luddites and troglodytes. And I'm going to look for those folks who feel the same way, people whose word is as good as a hand-shake and wouldn't call a lawyer if a police car ran over them.

And if they pick me up and put me in jail again, well, I'll find something to do there, too, but the alternative is to watch the economy crumble around us and leave ruins for our grandchildren. I'm not electing any presidents, no congressmen, not joining political movements, because I don't have to wait until the world is perfect to build the world I want. I'm doing it now, with the people who want the same thing, and all those bossmen and their wreckers and enforcers will just have to root hog, or die, but without me.

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.