Wednesday, January 25, 2012

The Gold Price Shot up to $1,712.85 in One Hour, Next Big Resistance is $1,805

Gold Price Close Today : 1699.80
Change : 35.60 or 2.1%

Silver Price Close Today : 3309.20
Change : 116.10 cents or 3.6%

Gold Silver Ratio Today : 51.366
Change : -0.753 or -1.4%

Silver Gold Ratio Today : 0.01947
Change : 0.000281 or 1.5%

Platinum Price Close Today : 1577.50
Change : 30.60 or 2.0%

Palladium Price Close Today : 693.00
Change : 15.20 or 2.2%

S&P 500 : 1,326.06
Change : 11.41 or 0.9%

Dow In GOLD$ : $155.16
Change : $ (2.27) or -1.4%

Dow in GOLD oz : 7.506
Change : -0.110 or -1.4%

Dow in SILVER oz : 385.56
Change : -11.42 or -2.9%

Dow Industrial : 12,758.85
Change : 83.10 or 0.7%

US Dollar Index : 79.43
Change : -0.442 or -0.6%

The GOLD PRICE was fiddling around all day, pitty-patting at $1,660, falling as low at $1,650, and then gold's best friend Ben Bernancubus and His Clowns made their announcement, and the GOLD PRICE shot up to $1,712.85 in about one hour. The SILVER PRICE languished indecisively, lolling around at 3153c then climbing back to 3220c when Ben appeared. In about one hour silver had gained 3.6% for the day, shooting to 3340c and backing off to only a 116.1c rise to 3309.2 at Comex close.

Ben has taken SILVER and GOLD nearly to the next level. Now we've reached that $1,705 resistance I have been looking for, and gold surmounted today its 150 DMA ($1,683.03). IF -- if -- gold punches through $1,705, the next big resistance comes in $100 higher at at $1,805.

I emphasize "if" because today's news was as good as it gets for gold. This might have been the final surge of the move off of $1,524 in December, and it could correct from here for a week or two. I'm not a fortune-teller -- tomorrow will tell us whether gold will continue rallying or not.

Above silver the only barrier left is 3400c -- well, 3570c, but 3400c offers stronger resistance. After that, silver has an easy climb 4000c cents where it fell off the cliff in September.

GOLD/SILVER RATIO left a gap down two days ago. Generally, markets trade back up to fill gaps. Be patient, don't let the enthusiasm of a rising market fool you, or the fear of a falling market.

I was minding my own business sitting in front of my computer concentrating when all of a sudden my Stupid Meter went off, alarm blaring and honking, Stupid needle pushed way over into the red. Clearly somebody in the world was pushing the safety envelope for Stupid Radiation. Problem is, if the hole in the ozone layer closes up, then the Stupid Rays cannot escape the earth's atmosphere, and every man, woman, and child on earth -- especially those registered to vote -- loses 8 points off their IQ for every day the Stupid Meter reading exceeds 4.8 Central Bankers (standard scientific measurement for stupidity. One Central Banker, abbreviated "CB" = 10 "ERs" or "Elected Representatives" = 100 SCJs or "Supreme Court Justices." One SCJ = 100 MLCs or "Moe-Larry- and-Curlys." One the other hand, in order of ascending stupidity, Ten CBs = 1 SE or "Secretary of Education," and 10 SEs = 1 TSAA or "Transportation Security Administration Agent.")

My heart had no more settled down from the scare that Stupid Meter alarm had given me than my Hogwash Detector went crazy. I jumped up and ran outside, because an alarm that strong meant a TIDAL WAVE of hogwash must be about to engulf my house and Tennessee. About that time I realized that everything was all right. Last night we had a State of the Union speech last night and today an FOMC meeting announcement and whenever you overload a Stupid Meter and a Hogwash Detector like that, you have to expect a lot of alarms.

Bernancubus and the FOMC announced today that they would keep interest rates low until "at least late 2014" and that the committee "expects to maintain a highly accommodative [read: inflationary] stance for monetary policy." But that's okay because they expect "inflation" to be subdued. To prove beyond all quibble that they have all lost their minds, the FOMC specified a two percent (2%) goal for long term inflation, measured by some price index that makes about as much sense as averaging the price of tire-irons with kumquats and SUVs and calling that an index.

Go look at the five-day charts you will notice that suddenly today the silver and gold charts rise straight into the sky. THAT was when the Federal Open Market Committee made its announcement, and THAT shows you how markets interpreted the Fed's announcement: "more and more inflation."

Of course, the US dollar index took this news of more inflation on the chin, sinking below 79.60 support to 79.426, down 44.2 basis points or 0.57%. That wrecks the rally, but stopped just below the 50 day moving average (79.56). I suppose it is POSSIBLE the dollar might turn and resume rallying, but clearly the Fed is working with the other Nice Government Men and Beneficent Central Bankers to lower the dollar and yen against the euro.

And the scabby euro took a great jump to close at 1.3108, up 0.56% and almost touching its 50DMA at 1.3142. Since it already stands above its 20 DMA (1.2891), piercing the 50 DMA will twist up the frenzy knob on the euro's momentum.

The Japanese yen presents a fine picture of government manipulation. It fell through internal support today and at one point through the trading channel reaching back to August. Closed up in that channel, but Oh, My! Somebody BIG is selling yen. Closed 128.66c/Y100 (Y77.72/US$1).

Stock investors are about to set off my Lunacy Monitor, as they bought today on news that the dollar will be trashed and the Fed will inflate more. Can that possibly aid the ailing economy? In a pig's eye it can. The economy is ailing only because of inflation in the first place (Don't argue with me here. There would have been no speculative real estate bubble and stock bubble and soap bubble unless the Fed had been inflating and making money artificially cheap, exactly as they are doing now.) More inflation will help the US economy as much as another drink will sober up a drunk.

Dow rose 83.1 points (0.66%) to 12,758.85. S&P500 rose 0.87% (11.41) to 1,326.06. This charade, this farce, this "inflate-poke-and-hope" management ought to bring tears to any sane eye.

But, it's an ill wind that blows no good, and the ill winds of Central Bank and Government Stupidity, Keynesianism, and Official Hogwash all blew mightily into the sails of silver and gold today.

Just to show you things haven't changed much, except that 120 years ago men had more courage, on 25 January 1787 the militia of what was called "Shay's Rebellion" was met and dispersed by superior Massachusetts state forces at the Springfield (U.S.) Armory. Shay's Rebellion was an uprising of debt-ridden, taxed-out farmers who had fought a Revolution for liberty only to find that at home they were being made debt slaves.

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.