Tuesday, January 24, 2012

The Gold Price Gave Back $13.80 Today This is no More That a Correction Within an Uptrend

Gold Price Close Today : 1664.20
Change : (13.80) or -0.8%

Silver Price Close Today : 3193.10
Change : 30.2 cents or -0.9%

Gold Silver Ratio Today : 52.119
Change : 0.060 or 0.1%

Silver Gold Ratio Today : 0.01919
Change : -0.000022 or -0.1%

Platinum Price Close Today : 1546.90
Change : -16.80 or -1.1%

Palladium Price Close Today : 677.80
Change : -8.25 or -1.2%

S&P 500 : 1,314.65
Change : -1.35 or -0.1%

Dow In GOLD$ : $157.45
Change : $ 0.90 or 0.6%

Dow in GOLD oz : 7.617
Change : 0.044 or 0.6%

Dow in SILVER oz : 396.97
Change : 2.69 or 0.7%

Dow Industrial : 12,675.75
Change : -33.07 or -0.3%

US Dollar Index : 79.81
Change : 0.023 or 0.0%

The GOLD PRICE bounced off that barrier at $1,680 yesterday and gave back $13.80 today, closing at $1,664.20. The GOLD PRICE can drop back to $1,658 - $1,656 and remain in an uptrend. So far, today's action classifies as no more than a correction within an uptrend.

The SILVER PRICE backed off 30.2c to close Comex at 3193.1c. Silver dipped its toe below 3200c to 3184c, but held there rock solid. And so it must do tomorrow to avoid a painful correction, down to 3080c, a dollar lower.

You always have to take care that you are not "talking your position," looking at a chart and seeing only what you want to see and ignoring the rest. Still, I believe that pattern on silver's chart is a continuation pattern, very tight, and will break out upside.

So (as my friend R. asked me today) why not talk about the GOLD/SILVER RATIO? Because I am still holding out for 57.5 to swap, and believe we will yet see that. Silver and gold have most likely made their bottoms, but first time silver makes a correction, it will suffer much more than gold will, and that (I hope) will give us that push.

Think about something else. I am still smarting by swapping out of SILVER into GOLD too early last year. I don't want to jump too early on the swap back, and I know from previous years that the ratio can post several similar highs before it turns down for good.

Right, that's risky, but for right now I believe it's a risk worth taking.

US dollar today gained a massive, spectacular 2.3 basis points (0.03%) to end at 79.806. It skidded to a stop just above the 50 DMA (79.52).

High today reached 80.184, low skidded to 79.643. Without closing higher than 80.20, the dollar is merely trolling for fools gullible enough to buy it on the way down.

Of course, if the buck hangs around above 79.50 for a few days, I might change my mind.

Scabby euro rose 0.09% today to 1.3036, not much changed from yesterday, but still rallying. Still headed for 1.3200 at least.

Yen, on the other hand, fell off a cliff today. Dropped 0.9% to 128.71c/Y100 (Y77.69/US$1), leaving behind a huge gap and punching through its 20 DMA (129.65) and 50 DMA (129.19). Support there is none before 128c, or the 200 DMA at 127.37c. Looks like the Nice Government Men in Japan woke up today and decided to lower the yen.

Stock indices shrugged off their confusion today and all decided to drop together. Dow lost 33.07 (0.26%) to 12,675.75. S&P500 gave back 1.35 to 0.1%. Charts aren't quite the same.

S&P500 has bumped into overhead resistance from last spring's highs and stopped cold. Dow punched through slightly, reached 12,764, and has traded back to the line for -- a failure and fall back, or a final kiss good-bye? Not clear yet, but stocks don't have much gas left. Dow won't reach 12,870, S&P500 shouldn't reach 1,360.

On 24 January 1848 James W. Marshall discovered a gold nugget at Sutter's Mill in northern California, the discovery that set off the Gold Rush. Discoveries of gold in California, Australia, and later South Africa led to a CHEAPENING of gold against silver, and the price of silver in gold rose steadily from 1848 until 1873, when silver was corruptly demonetized first in the US ("Crime of '73") and then in the new German Reich. Contrary to the propaganda, it was NOT new silver discoveries, like the Comstock Lode, that led to silver's cheapening against gold or its demonetization. That was all politics, and silver was gaining value from 1848 forward, never trading below the $1.2929 statutory value from 1848 to 1873, and rising at some points to $1.35 (4.4% over statutory price). No, ultimately driving silver out of the monetary system was a project of special interests who planned to drive out first, silver, and then gold, and so create their own money out of thin air. So far, they've won, and think what a tragedy it would have been if the banks had lost. Why, how would states have raised the money to fight all those world wars without central banks and fiat money? Gee, they couldn't have, so they would have been forced to make peace. It would have been a historical tragedy, wouldn't it?

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.