Monday, March 12, 2012

The Gold Price Fell Today You are Watching the Last Leg of the Correction

Gold Price Close Today : 1699.20
Change : (11.70) or -0.68%

Silver Price Close Today : 3337.4
Change : 80.0) cents or -2.34%

Gold Silver Ratio Today : 50.914
Change : 0.851 or 1.70%

Silver Gold Ratio Today : 0.01964
Change : -0.000334 or -1.67%

Platinum Price Close Today : 1702.00
Change : 12.75 or 0.75%

Palladium Price Close Today : 709.00
Change : -2.25 or -0.32%

S&P 500 : 1,371.14
Change : 0.27 or 0.02%

Dow In GOLD$ : $157.66
Change : $ 1.55 or 0.99%

Dow in GOLD oz : 7.627
Change : 0.075 or 0.99%

Dow in SILVER oz : 388.32
Change : 10.21 or 2.70%

Dow Industrial : 12,959.86
Change : 37.84 or 0.29%

US Dollar Index : 79.88
Change : -0.098 or -0.12%

About as I expected, silver and
GOLD PRICE fell today. Gold doesn't have enough steam yet to breach the $1,715 barrier. It will, it will, but first another dip of the toe below $1,700.

Today the GOLD PRICE dropped $11.70 and ended the day on Comex at $1,699.20.

Gold was ailing the whole day, and never reached higher than $1,708.20. Still, it might well catch hold here at the 50 day moving average ($1,694.16) where also some lateral support hides at $1,696. If that gives way, then gold could shoot for $1,674.76, the 200 DMA, or it might peek below $1,650, just to scare all the gold bugs to death.

Matters little, as you are now watching the last leg of the correction from the $1,787 rally.

The SILVER PRICE lost 80.1c today to close at 3337.4c, near the 3333.3c low. I'd prefer silver drop not below today's low, since that would preserve the 5-day uptrend.

Silver's next fight comes at 3300c, if it doesn't hold this line. But I don't much care if it falls to 2900c (now rather unlikely) because I've been looking at a technical measure that implies silver has very little downside left before another wild rally begins, if it hasn't already.

This will probably turn out to be a toilsome week for silver and gold, but this humiliation has not long to run. By March's end 'twill be past. Hence y'all had best keep your eyes peeled for a spot to buy. Once this has ended, you will only be able to spot silver and gold rapidly disappearing toward the stratosphere.

In the biggest bond writedown in history, the Greek government swapped most of the bonds coming due mid-month for others worth less than half their value. Wow. World is getting better and better, making new records all the time. Ain't that fiat money and fractional reserve banking great! Hey! What about them bankers, huh?! I mean, re-po'ing an entire COUNTRY! That takes some gall, as my grandmama might say. Y'all proud of your banks yet? Your politicians?

'Twas a rough day for silver and gold, but pay it no mind. Higher prices are coming shortly for metals, and lower prices for stocks.

Something will break soon. For too long stocks and metals have been closely tracking each other. Either I am dead wrong and stocks will not lose another 80% of their value against metals and silver and gold do not have most of their bull market gains in front of them, OR stocks will breakdown soon against silver and gold. (Naturally I do NOT think I am wrong about that.)

I've been looking at my superbly reliable indicator, the Dow in Gold Dollars that measures the value of stocks in gold. Soon, soon, it should break down, probably as a consequence of stocks falling AND gold advancing both.

But y'all recall that I am no more than a natural born fool from Tennessee, and I ain't as smart as them fellows who want to sell y'all stocks.

US dollar index gave away 9.8 basis points today, a measly 0.13%, but that carried it below 80 again, a blow to morale. As long as it clings above 79.60 the noxious dollar will keep climbing.

The nasty euro today rose 0.22% to $1.3153. True, it has caught on its 50 and 62 day moving averages (1.3093 and 1.3083), but in the last 5 days it also left behind an island reversal, a pattern that very seldom fails to wreak its vengeance. Expect to see it lower. All the good news (?) about the Greek Debt Deal has come out, and the future holds -- what? What good news? I sure don't know.

The nugatory yen edged up 0.23% today to 121.57c/Y100 (Y82.26/US$1). Maybe Friday's spike down marked the bottom. Hard to fathom who would sell more oversold yen from here. No matter much -- all the fiat currency exchange rates amount to no more than an elaborate kabuki anyway.

Stocks eked out small gains today, but not unanimously. Dow rose, S&P rose barely, while the Nasdaq composite and Russell 2000 fell. Disagreement, non-confirmation, confusion, bewilderment. You couldn't get from here to Tupelo using that roadmap.

Dow rose 37.84 (0.29%) to the same old neighborhood, 12,959.86. S&P500 barely moved, but you could catch it with time-lapse photography. Climbed 0.2% (0.27 points) to 1,371.14.

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.