Thursday, March 01, 2012

The Gold Price Rose $11.20 to $1,721.10 if you Don't Buy Silver or Gold you are Effectively Buying US Dollars or Euros or Yen

Gold Price Close Today : 1721.10
Change : 11.20 or 0.66%

Silver Price Close Today : 3561.10
Change : 102.8 cents or 2.97%

Gold Silver Ratio Today : 48.331
Change : -1.113 or -2.25%

Silver Gold Ratio Today : 0.02069
Change : 0.000466 or 2.30%

Platinum Price Close Today : 1698.20
Change : 29.50 or 1.77%

Palladium Price Close Today : 713.10
Change : 9.00 or 1.28%

S&P 500 : 1,374.09
Change : 8.41 or 0.62%

Dow In GOLD$ : $155.30
Change : $ (0.66) or -0.42%

Dow in GOLD oz : 7.513
Change : -0.032 or -0.42%

Dow in SILVER oz : 363.10
Change : -9.98 or -2.67%

Dow Industrial : 12,930.30
Change : 28.23 or 0.22%

US Dollar Index : 78.79
Change : 0.051 or 0.06%

All right, I know y'all are all curious about the silver and GOLD PRICE. They bounced back today like a fine prizefighter. The GOLD PRICE rose $11.20 to $1,721.10 and silver rose 3%, 102.8c, to 3561.1c, after falling 6.8% yesterday.

Is it the end of the world? Mercy, NO! Is it the end of the world when T.J. Maxx runs a sale? My wife doesn't think so, and that's what the market is offering you right now on silver and gold.

I will admit that yesterday's $77.10 drop might give anybody cause to reach for his wastebasket and a short puke, but think about it. That's a 4.3% drop, 4 pennies out of a dollar, and not many of y'all would stoop down to pick up four pennies.

At its lowest yesterday the GOLD PRICE hit $1,696. What does that mean? Well, that support under $1,705 didn't give. Next, it closed yesterday at $1,709.90, ABOVE the $1,705 crucial support. Today it bounced up to the next support level, $1,725, and closed at at $1721.1

Now y'all think. Y'all were all happy as a fat rat in the city dump while gold was rising from $1,523 to $1,787, so why get riled when it drops back to $1,710? The up 5 steps, back one step is the normal growth process.

As long as GOLD holds about $1,696, it will not drop lower. Now let's talk about that, because I say stuff like that all the time. What am I leaving out? That if you buy here, you are risking that it WON'T hold $1,696. But if you keep waiting until you are 100% certain gold is rising, you'll sit there watching the whole bull market, and miss it. Besides, the risk you sit is greater than the risk you run. If you don't buy silver or gold, you are effectively buying US dollars or euros or yen. You really want to hold those?

SILVER gained nearly 3% today, 102.8c, which salved yesterday's 255.7c loss (owch.) Looking at the chart, yesterday merely took silver down for a final kiss good buy to its 300 day moving average. Today it bounce up above that 3482c mark.

Yesterday's fall satisfied a 38% correction. That could be enough. If silver falls 50% of its foregoing rise, it would hit 3200c. Testifying against much more falling is that downtrend line from the August high, which yesterday nearly touched. Another final kiss good-bye?

Long and short here is that yesterday's fall was catalyzed by the Bernancubus remarks, but both metals were due for a correction. The Bernancubus just helped us get it all done in one day.

Yesterday offered a perfect example how central banks destabilize markets. That goof Bernanke mumbled around before congress and suggested he might not print more money.

When are folks going to learn this is all propaganda? Brakes! Gas! Brakes! Gas! He's just driving the sheep into the direction he wants them to go. In the end, I'll warrant y'all, he WILL inflate, because he hath no weapon besides. The whole institutional set-up breathes and eats inflation, and without it the system dies and apparatchiki like the redoubtable Mr. Bernanke become supernumerary and worthless.

This issue differs somewhat from the manipulation- of-silver-and-gold issue. Do the Fed and the government manipulate silver and gold, not to mention stocks? Of COURSE they do, but NEVER successfully over the long term. Witness: their gold manipulations since 1996 have successfully kept gold, then at $252, down to $1,721.10 today, only a 6.83-fold increase.

However, when a market is ready to correct, a little push further by the government (as we saw yesterday) is liable to work a big, but short-lived and temporary, effect. Anyhow, Bernanke's intervention no more caused the drop in silver and gold than germs cause disease. A weakness in the immune system causes disease, and the germs take advantage of it. That germ Bernanke saw silver and gold with a weak immune system, and took advantage of it.

Now that we have all that straightened out, let's talk about pleasanter things, or at least, more rational.

Stocks keep on struggling along in the same trading range, burning up buying power and getting all gussied up for a sizeable fall.

Dow today gained a magnificent 0.22 %, 28.23 points, to 12,980.30. S&P500 climbed 8.41, 0.62%, to 1,374.09. Stocks have no direction and they've traded out a fatal rising wedge -- not a recipe for success and higher prices. But don't believe me -- what am I, a natural born fool from Tennessee, next to the geniuses of Wall Street and Washington? Why, I couldn't come up to Comrade Bernanke's shoe soles, intellectually speaking. Physically, of course, I'm a head or so taller. I'd say "better looking", too, but that's like shooting carp in a rain barrel -- with a hand grenade.

The dollar's 7/10% gain yesterday-- 54.1 basis points -- nailed a tent stake into the euro's head. It dropped 1.14%, huge move for a currency. Today it ended at 1.3316, down another 0.12%. Chart begs to say that the euro's rally reached its 50% correction level and ran out of gas, and is about to begin diving again. 20 day moving average stands nearby at 1.3245. If the euro tries to cross that bridge, it will find no bridge, only a gulf.

Yen fell, too, yesterday, but only to prove a double bottom at 123c/Y100 (Y81.30/US$1). Rose slightly today, 0.07%, to 123.28c (Y81.12).

Wow. Trying to pick the best paper currency is like trying to pick the World's Most Likeable Dictator. Tough choice. Anyway, the scrofulous dollar gained 5.1 basis points today to close at 78.788. Dollar has escaped that gravity that was pulling it earthward and built new support above 78.60. Whether it can pierce 79 is another question.

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.