Monday, January 30, 2012

If the Gold Price Violates Today's Low it Might Fall to $1,680 on the Other Hand it Could Rise to $1,805

Gold Price Close Today : 1731.00
Change : (1.20) or -0.07%

Silver Price Close Today : 3349.70
Change : 26.20 cents or -0.78%

Gold Silver Ratio Today : 51.676
Change : 0.366 or 0.71%

Silver Gold Ratio Today : 0.01935
Change : -0.000138 or -0.71%

Platinum Price Close Today : 1610.70
Change : -11.10 or -0.68%

Palladium Price Close Today : 686.75
Change : -1.75 or -0.25%

S&P 500 : 1,313.01
Change : -3.32 or -0.25%

Dow In GOLD$ : $151.11
Change : $ 0.04 or 0.03%

Dow in GOLD oz : 7.310
Change : 0.002 or 0.03%

Dow in SILVER oz : 377.76
Change : 2.73 or 0.73%

Dow Industrial : 12,653.72
Change : -6.74 or -0.05%

US Dollar Index : 79.11
Change : 0.131 or 0.17%

Not surprising the socks off anybody but the unshod, the GOLD PRICE and SILVER PRICE both backed away from big resistance today. Gold lost $1.20 to end at $1,731.00 on Comex while silver gave back 26.2c to settle at 3349.7c.

For three days the GOLD PRICE has moved sideways across the chart bounded by roughly $1,715 and $1,740. Friday marked the high, so this line is rounding over downward. Today's low came at $1,716.26. If gold violates that low tomorrow, then it might unravel all the way to $1,680. On the other hand, once it breaks through $1,740, next stop will be $1,805. Might as well steel yourselves for it, a correction will come some time, and fairly soon given the strong rise. Won't be the end of the world, or even the end of the larger rally.

SILVER PRICE three day range has carried it from 3300c all the way to 3400c. The silver chart shows (as does the gold chart) what might with equal justification be called a continuation pattern or a topping pattern. All we can do is watch the boundaries of the range -- 3400c to 3300c and see what happens.

Once again today I have been examining the GOLD/SILVER RATIO chart, and again I have to confess that I expect it to make one final push above 57.5. If I'm wrong, y'all can string me up. If you can catch me.

Scariest thing about writing a daily commentary is that buzzard that sits on your shoulder squawking, "What happens when you run out of things to say? Or on the day nothing happens?"

One of the advantages of being a natural born fool is that you never have enough sense to admit that you have nothing to say worth hearing, so that solves the first. But today was one of those days when not much happened. Oh, everybody showed up for work and went through the motions, but nothing much changed.

The US DOLLAR INDEX rallied a mite, up 13.1 basis points (0.17%) to 79.107. This changes nothing, however. Five day chart might have bottomed late Friday, but dollar will have to burst through 79.50 to prove that. 50 day moving average stands above the Dollar Index at 79.67, and other indicators point unanimously down. Not nearly enough enthusiasm to move much higher.

Greek debt talks are foundering -- come to think of it, they've been foundering since they began -- and the euro, having hit 132.34 Friday and its 62 DMA, backed off today to 1.3130, losing 0.68%. This doesn't near about turn the trend down. Look for higher euro still.

Something's going on with the yen, but I don't know what. It's the sorriest of the three big fiat currencies, worst debt, etc., but it's rising. Monday of last week it gapped down horribly in a move that screamed, Government Manipulation. Stayed down one day, traded back up through the 50 DMA, then Friday gapped UP above the 20 DMA and through internal resistance about 130.5c. This points to another trip back to the top of the trading range above 132c.

Against both the euro and the yen gold is breaking out toward the sky. Not quite confirmed yet in the euro, but clearly in an uptrend.

Against the other Loser Fiat Currencies, silver also offers a bright outlook. Silver in Euros has broken out of a down trend and traded up to its 200 DMA, standing above its 20 and 50 DMAs. The 20 has just crossed above the 50. Once silver crosses through 26 euros, it will be bye-bye earth. Silver in yen shows a similar set-up, but not quite as fully unfolded.

STOCKS had another sickly day. Dow only fell about 0.5% to 12,653.72, down 6.75 points, far less than the andSP500 that lost 3.32 points or 0.25%. Other indices lost more than the Dow, too, sending the smell of ripe mackerel into the air. A drop through 12,530 will push the Dow's head underwater. RSI and MACD are ripe to drop.

STOCKS -- they may be YOUR chance to buy a ticket on the Titanic this year.

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.