Thursday, February 23, 2012

Gold Price is Climbing up the December Low and Should Break Above it Tomorrow

Gold Price Close Today : 1784.90
Change : 14.90 or 0.84%

Silver Price Close Today : 35.556
Change : 1.300 cents or 3.79%

Gold Silver Ratio Today : 50.200
Change : -1.470 or -2.85%

Silver Gold Ratio Today : 0.01992
Change : 0.000567 or 2.93%

Platinum Price Close Today : 1724.10
Change : 1.75 or 0.10%

Palladium Price Close Today : 716.80
Change : -5.65 or -0.78%

S&P 500 : 1,363.45
Change : 5.79 or 0.43%

Dow In GOLD$ : $150.38
Change : $ (0.71) or -0.47%

Dow in GOLD oz : 7.275
Change : -0.034 or -0.47%

Dow in SILVER oz : 365.20
Change : -12.51 or -3.31%

Dow Industrial : 12,984.91
Change : 46.24 or 0.36%

US Dollar Index : 78.65
Change : -0.565 or -0.71%

Surprise! the GOLD PRICE rose $14.90 (0.84%) to $1,784.90. The SILVER PRICE did not punish my impatience in buying yesterday, but confirmed my suspicions with a 130c jump through the 300 DMA to 3555.6c, up 3.9%!

This broke the GOLD PRICE through the fan-line drawn from the September high to the February high, a fan-line already raised from the November high. Gold is climbing up the backside of the uptrend line from the December low, and should break above it tomorrow. In fact, it should hit $1,805 (November high) tomorrow. From there we either get a correction (or maybe a rise to $1,825 and then a correction) or the ride gets wild indeed. (today's high came at $1,787.18).

Stepping back and looking at a three-year chart, the GOLD PRICE peak in early September at $1,923.70 appears to have completed an A-B-C correction, so unless gold gainsays that will a fall through its 150 day moving average, I will work on that presupposition.

I don't know what was holding silver back, but nothing could hold it today. After it hit 3559c, it dropped only pennies to close at 3555.6c

This is textbook stuff now. SILVER has punched through its 50, 20, 300, and 200 DMAs. Momentum is nearly as UP as it gets. It also broke through internal resistance about 3440. What can go wrong?

Only this: Silver's Relative Strength Indicator is at 72.11, well above the 70 overbought mark. Also, the MACD appears to be topping.

Still, hard to see how silver will not reach 3950c before it pauses for a correction.

Every news item about gold is not a cause for hysteria or proof of a conspiracy, although many internet writers view them so. Take for instance the Zero Hedge article today, "PROJECTED PIIGS PILLAGE: 3233.5 Tons of Gold TO BE CONFISCATED BY INSOLVENT EUROPEAN BANKS."

Ahh, first of all when a lender reclaims property from a borrower it's not called "confiscate" but "foreclose."

Second, when the country voluntarily makes its gold reserves liable to seizure for debt default, it stretches vocabulary to call that a confiscation.

Third, the Greek population is not about to lose its gold, as the article claims, since the individuals of the population do not own the gold, the government or the central bank does, quite different persons. Individual Greeks, I feel sure, will hold on to their gold quite tightly.

The article claims that the Greek sellouts -- the technocrats installed to engineer the bank bailout -- are making or have made changes to the Greek constitution that allows the creditor banks to "plunder" the Greek gold," amounting to 111.6 tonnes (3.583 million oz.)

Tyler Durden then bootstraps off all these claims to aver with "100% certainty" that the other PIIGS countries will be plundered of their 3,234 tonnes of gold (103 mn oz).

But where is the surprise, and where is the confiscation? These borrowers made themselves slaves to the lender, the banks, who control their respective governments and the EU. Did anyone believe that the banks would not strip these lands of every asset, private and public, when they couldn't repay? What is as cold as a banker's heart?

And when you lose the collateral, it's not confiscation it's bankruptcy and foreclosure.

What is truly surprising and grotesque here is not that the bankers are sucking Greece dry and impoverishing the people, making debt slaves of the nation. Rather, it is surprising that the Greeks so mildly accepted the technocrat(s) the bank imposed on them as their government and that they don't rise up in arms to overthrow them all. Now that is truly amazing.

But what do I know? I can barely operate a computer and am still not too hot at tying shoes.

The euro today surged on better than expected German economic data. That took the euro above the last high (1.3322s) and sets it up to retrace at least 50% of its November - January fall, targetting 1.3435.

That news was enough to panic folks out of the US Dollar. The dollar index lost 56.5 basis points, a hefty 0.73%, to end at 78.646. Alas, for you dollar holders, that took the dollar below its 20 DMA (79.11) and bends momentum downward. Don't write the Samolean off just yet, though. As long as it abides above 78, it holds the hope of higher prices. It is drawing nigh its last low (78.36), though, where it must either buy a ticket or get off the bus.

As I suspected, the yen rallied 0.39% off its close yesterday to end at 125.09c/Y100 (Y79.94/US$1). It could rally to fill several gaps all the way up to 128.6. That ought to end its downward bias for a while.

This stock thing causes pain in the watching. Today the Dow reached 12,996 -- almost, but not quite that 13,005 high of Tuesday. I suspect a lot of people, stuck with losing stock positions, view 13,000 as their flashing Green light to get out of stocks.

Dow rose 46.24 (0.36%) to 12,984.91, but notice that the Dow In Gold Dollars fell again. Nor did the S&P500 reach its Tuesday glory, but closed up 5.79 (0.43%) to 1,363.45.

Folks get antsy when they look only at stocks and see how much they've climbed since March 2009, overlooking that silver and gold have climbed much, much more. When you view the Dow divided by silver or gold you can see stocks' steady downward trend.

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.