Tuesday, March 06, 2012

The Gold Price Dropped 1.9% Today to $1,671.40 and May Fall to Near $1,600

Gold Price Close Today : 1671.40
Change : (31.60) or -1.86%

Silver Price Close Today : 3274.10
Change : 91.0 cents or -2.70%

Gold Silver Ratio Today : 51.049
Change : 0.441 or 0.87%

Silver Gold Ratio Today : 0.01959
Change : -0.000171 or -0.86%

Platinum Price Close Today : 1610.40
Change : -49.60 or -2.99%

Palladium Price Close Today : 670.00
Change : -37.00 or -5.23%

S&P 500 : 3,274.10
Change : -20.97 or -0.64%

Dow In GOLD$ : ($1.13)
Change : $ (2.49) or -182.29%

Dow in GOLD oz : (0.054)
Change : -0.121 or -182.29%

Dow in SILVER oz : (2.78)
Change : -6.13 or -183.02%

Dow Industrial : (91.00)
Change : -203.66 or -180.77%

US Dollar Index : 79.83
Change : 0.529 or 0.67%

GOLD PRICE dropped 1.9% today, down $31.60 to $1,671.40 on Comex. It was already rolling down the slope in Europe and had reached $1,685 when the US opened and the selling began in earnest, taking gold to the day's low at $1,663.40 by 9:30. Gold then recovered the rest of the day to move sideways between $1,675 and $1,670.

Bad news doesn't stop there. GOLD PRICE dropped out of a flag pattern and fell through its 50 DMA ($1,688.42) and even its 200 DMA ($1,674). The proverb holds that flags always fly at half staff. If so, gold will fall to near $1,600, and relatively fast. Let's watch it for a day or two.

In European trading the SILVER PRICE broke below 3350c, but although it suffered through the day, dropping 91c (2.7%) to close Comex at 3274.1c, it never suffered any big fast drop like gold's. Ohh, that 3300c barrier will be tough to break through on the way back up.

Today SILVER caught and held at 3245.7c, but when that 3250-ish area give way, silver will give back another 50c very fast, and could fall to 3065c. Touching the 50% correction (of the December through March rally) at 3183c is a virtual certainty. 50 DMA stands at 3224c, and that will offer weak support, but silver has further to fall.

The GOLD/SILVER RATIO has risen sharply since 1 March at 48.331 (remember, the ratio FALLS when metals are rallying, and RISES when metals are falling.) Today it closed at 51.049. The ratio has broken out to the upside and if we are ever to hit our 57.5:1 target, it ought to be on this move up in the ratio.

Awww, come on, now! All y'all that wrote yesterday because I typed "2012" instead of "1558" for the year Francisco Fernandes introduced smoking tobacco into Europe, y'all already knew that, right?

As I was saying yesterday, "Should the Dow break 12,880 (yesterday's low), wave bye-bye. Quickly."

Did y'all remember to wave? Stocks were in trouble from their 12,958.65 open, dropping like your daddy's borrowed pocketknife down the well. They caught briefly just above 12,800, then eroded the rest of the day to end at 12,759.15, down 203.66 points or 1.57%. Owch.

S&P fell in lock step with the Dow, down 20.97 or 1.54% to 1,343.36. I may be no more than a natural born fool from Tennessee, but even I know that when you see one of them wedgey looking thangs pointing up on the chart, the market's about to hit the skids.

I don't see any support much before 12,250. Might pause a bit at the 50 day moving average, now 12,678, but the 200 DMA looks the more likely target at 12,012. BWDIK?

The news tells us that stocks fell on apprehensions about the Greek Debt Deal (y'all remember that?) falling apart. Seems it really ISN'T a done deal after all, and some bondholders are dodging the barber shop, holding out to trade a haircut on Greek bonds to full payment from Credit Default Swaps.

Apparently the news has never looked at a stock chart.

That US dollar index was just marking time yesterday, planning to spurt 52.9 basis points today, 0.68%, to 79.829. 80 lies in its future, and higher, I suspect.

Y'all can imagine that fear about the Greek Debt Deal really helped the euro today, right? It fell a hefty 0.79% to $1.3112. The euro appears to have resumed its downward course against the dollar.

Yen, on the other hand, rose 0.84% to 123.66c/Y100 (Y80.87/US$1), and appeared to make a spike bottom - again -- and bounced up. Surely that must be the last of its decline.

I have a favor to ask y'all. My wife Susan is having troubles with her heart again, after she had her mitral valve repaired in September 2008. I would deeply appreciate your prayers for her. She's awfully bossy, but we've been married since we were 12, so I'm used to her.

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.