Monday, February 27, 2012

The Gold Price May Fall to $1,745 Touching the September Downtrend Before Shooting up

Gold Price Close Today : 1775.10
Change : (9.80) or -0.55%

Silver Price Close Today : 3533.80
Change : 21.80 cents or -0.61%

Gold Silver Ratio Today : 50.232
Change : 0.032 or 0.06%

Silver Gold Ratio Today : 0.01991
Change : -0.000013 or -0.06%

Platinum Price Close Today : 1704.60
Change : -8.20 or -0.48%

Palladium Price Close Today : 702.75
Change : -8.60 or -1.21%

S&P 500 : 1,365.74
Change : 2.29 or 0.17%

Dow In GOLD$ : $151.19
Change : $ 0.82 or 0.55%

Dow in GOLD oz : 7.314
Change : 0.040 or 0.55%

Dow in SILVER oz : 367.39
Change : 2.20 or 0.60%

Dow Industrial : 12,982.95
Change : -1.96 or -0.02%

US Dollar Index : 78.31
Change : -0.511 or -0.65%

The Silver and GOLD PRICE spake today with fork├ęd tongue, but we've learned that these ambiguities often resolve in higher prices next day. But judge for yourselves:

The GOLD PRICE pared off $1.50 to settle at $1,773.60 while the SILVER PRICE gained 18.6c to 3552.40 after a 3559c high and defending 3500c at a 3499c low. None of this tells us much.

Gold was blocked today at $1,779.19, and has made lower tops since Thursday. I'm included to write this off as a normal shallow correction after that big gain to Thursday's high. For gold that $1,760 level is key support because it was at $1,760 that it leapt up to $1,780 in one day (Wednesday last).

Looking at the longer term chart, I can picture that the GOLD PRICE is making a minor correction in its uptrend, may fall to $1,750 or $1,745 for a Final Kiss Good-bye at the downtrend line from the September top, and from thence will roar past your eyes like the Blue Angels. A drop below $1,735 would disappoint and gainsay that expectation.

SILVER PRICE resembleth not gold. It has created a resistance ceiling at 3560 since last Thursday, and keeps on bumping against that. Today it backed off to 3500c, and conceivably it might back off to 3480c. Yet my eyes keep screaming into my ears that silver feels strong as a garlic-milkshake. (How's that for synesthesia-chocked metaphors and similes?) This ceiling pattern reminds me of the same figure silver traced out at 3450c -- before it smashed that barrier.

Early this week may show silver and gold slightly lower as they digest last week's new highs, but they have lost none of their enthusiasm. This ought to prove another week of higher closes at the last.

Behold! A couple of articles y'all might want to read (he said, employing gross understatement): The other is at

The first explains that the company the banks set up to speed up bundling mortgages for securitization, Mortgage Registration Electronic Services (MERS), was found by a US bankruptcy judge to have bungled transferring mortgages. Bottom line is that papers proving the mortgages have disappeared, and "no mortgage paper, no mortgage, no foreclosure." This proves my contention that the reason the banks entered into the $25 bn agreement with state attorneys general was so they could perfect their bad title into good title by re-writing the mortgages. "Please don' t'row me in dat brier patch, B'rer AGs!" Likewise it means that millions of people with underwater mortgages might find themselves the owners of a house, for free, with no mortgage, and a plethora of banks will be sucking wind like a worn out pump with all gaskets blown.

The second concerns that world wide real estate bubble y'all thought had burst. Think again! Article outlines European countries -- most of 'em -- where the bubbles were blown as big or bigger as the US but have NOT YET burst. This does not exactly argue that "happy days are here again."

Finally, this is not exactly the speech I gave last Friday in Somerville, but contains the same ideas in greater detail. You will find "Restoring Freedom in Tennessee" at


Just like an old mangy tomcat, the US dollar index has, it seems, nine lives. I counted it dead on Friday because its body had been thrown over the fence of 78.36. Yet today, here it came, clawing up onto the porch again, ears all chewed up, patches of fur missing, one eye swollen shut, lacking a couple of front fangs, but still going. Dollar index rose today 17.8 basis points to 78.59, up 0.23% and above the morale-killing 78.50 mark -- that is, it kills morale when the dollar falls below that.

So all said, the mangy and scrofulous dollar remains in the game. A break below 78.35 would send it hurtling toward its 200 day moving average, now 76.97.

Reality paid a visit to the Euro today, and slapped it down 0.35% to 1.3400. Might be that Friday's intraday high, 1.3486, marked the rally's top, but who knows with currencies? Parsing currencies is like trying to shoot skeet off the back of a bass boat in a windstorm with the government sneaking blanks into your shotgun shells.

Yen continues to recover from its slide. Closed up 0.66% today at 124.15c/Y100 (Y80.55/US$1). So bad overbought its cousins and in-laws are overbought. Bound to rally some.

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.