Tuesday, January 03, 2012

The Gold Price Met Stout Resistance at $1,605 to Close Today at $1,599.70

Gold Price Close Today : 1599.70
Change : 33.90 or 2.2%

Silver Price Close Today : 2953.30
Change : 165.80 cents or 5.9%

Gold Silver Ratio Today : 54.167
Change : -2.006 or -3.6%

Silver Gold Ratio Today : 0.01846
Change : 0.000659 or 3.7%

Platinum Price Close Today : 1435.00
Change : 41.65 or 3.0%

Palladium Price Close Today : 667.25
Change : 17.75 or 2.7%

S&P 500 : 1,277.06
Change : 19.46 or 1.5%

Dow In GOLD$ : $160.20
Change : $ (1.08) or -0.7%

Dow in GOLD oz : 7.750
Change : -0.052 or -0.7%

Dow in SILVER oz : 419.78
Change : -18.52 or -4.2%

Dow Industrial : 12,397.38
Change : 179.82 or 1.5%

US Dollar Index : 79.62
Change : -0.434 or -0.5%

Let's start by saying that the GOLD PRICE rose $33.90 (2.2%) to $1,599.70 and the SILVER PRICE rose 165.8c (5.9%) to 2953.3c. Somebody made a big deal to me about silver's rise, so I went back over the last year to see how often that sort of thing had happened and what was its outcome.

In the last year, SILVER has risen 5% or more on seven occasions. In six of those seven cases, three days later silver was flat or lower, as much as 6.7%. In only one case (July 2011) was silver higher three days later.

But of course, that only works until it doesn't work any more.

More to the point -- given the strength and enthusiasm of today's rise -- is silver's recent behavior at new lows. It sells off hard, runs all the scaredy-cats out of the market, and then does a complete about face. The last four rallies, as SB pointed out to me, began after silver failed to follow through on a new low.

Thus I am content to ride higher with silver a while, although I am by no means persuaded that silver's travails are over. That is, even though it may have made a bottom that holds, more scares will follow. Also, that GOLD/SILVER RATIO chart does not look to me as if it has completed its upward move.

On the other side, my Secret J.B. Proprietary Indicator flashed positive on 29 December. Sometimes it takes the JBI a while to pan out, but it usually proves right.

The GOLD PRICE met stout resistance at $1,605 (high today hit $1,607) and closed pennies under $1,600. Look for it to challenge $1,625 tomorrow. The Great Barrier of Believability, however, awaits at $1,671 and the 150 DMA. It should at least reach that level.

SILVER may temporize tomorrow as it wrestles with its 20 DMA at 2993c and the psychological barrier of 300c. Likely targets are the 50 DMA (3196c) and the 300 DMA (3409c). What I am most closely watching is how silver will act at 3050c when it hits that big downtrend line from the September highs. It must leap that big hurdle first, or nothing else will happen. If stocks faint, silver will diverge downward from gold.

From somewhere a huge burst of enthusiasm has entered the silver and gold markets. It will run hog-wild a while, then we'll see what gains can be held.

More I thought about my statement on Friday last about the good folks abundantly left in this country, more I realized I had left something out about the rule of law.

Many laws make bad government. When the law is written on a people's heart, it need not be written in books. If the law is not written on their hearts, no multitude of laws and lawyers will maintain the rule of law. Written laws don't make people better, they make them behave.

Well, if you don't like the markets, stick around. They're bound to change, and sometimes, like today, with a bang. Trouble is, sometimes we're hard of hearing.

Dow today pierced 12,300, rising 179.82 (1.47%) to 12,397.38. I reckon if you twist a rope, you hang by that rope, so I will hang. That close suggests that stocks will reach 12,600 before they stop. Sorry, I don't reckon they can reach higher than that, unless the Bernancubus and Obamaramus can walk on water.

S&P 500 rose 1.55% (19.46 points) to 1,277.06.

Not even the White House Dimwit-in-Chief trying to pick a war with Iran could keep those stocks down today, but something gave the US dollar index heartburn. It fell 43.4 basis points (0.56%) to 79.62, and is right on its uptrend line. If 76.50 fails to hold, dollar will land at 78.

Scabby euro rose 0.7% to 1.3052, rising up to the downtrend line. 20 DMA stands above at 1.3121.

Japanese yen made good it's breakout from last week, closing above overhead resistance (the lower boundary of the trading channel established in August, September, and October). Rise could take the yen to 132, if the Japanese Nice Government Men don't draw out their Samurai swords of manipulation first. Closed 130.47c/Y100 (Y76.65/$1).

The law is written on our people's hearts -- I see that every day in the way they do business. But if you go to court to seek justice and the rule of law, well, like Dante warned those descending into hell, "Abandon hope, all ye who enter here!"

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.