Friday, March 09, 2012

If the Gold Price Breaches $1,730 on Monday it Has Bottomed and I will Buy with Both Hands

Gold Price Close Today : 1,710.90
Gold Price Close 2-Mar : 1,708.80
Change : 2.10 or 0.1%

Silver Price Close Today : 3417.5
Silver Price Close 2-Mar : 3448.1
Change : -30.60 or -0.9%

Gold Silver Ratio Today : 50.063
Gold Silver Ratio 2-Mar : 49.558
Change : 0.51 or 1.0%

Silver Gold Ratio : 0.01997
Silver Gold Ratio 2-Mar : 0.02018
Change : -0.00020 or -1.0%

Dow in Gold Dollars : $ 156.13
Dow in Gold Dollars 2-Mar : $ 156.99
Change : $ (0.86) or -0.6%

Dow in Gold Ounces : 7.553
Dow in Gold Ounces 2-Mar : 7.595
Change : -0.04 or -0.6%

Dow in Silver Ounces : 378.11
Dow in Silver Ounces 2-Mar : 376.37
Change : 1.74 or 0.5%

Dow Industrial : 12,922.02
Dow Industrial 2-Mar : 12,977.57
Change : -55.55 or -0.4%

S&P 500 : 1,370.87
S&P 500 2-Mar : 1,369.63
Change : 1.24 or 0.1%

US Dollar Index : 80.003
US Dollar Index 2-Mar : 79.432
Change : 0.571 or 0.7%

Platinum Price Close Today : 1,689.25
Platinum Price Close 2-Mar : 1,696.30
Change : -7.05 or -0.4%

Palladium Price Close Today : 711.25
Palladium Price Close 2-Mar : 716.20
Change : -4.95 or -0.7%

GOLD PRICE has climbed to the $1,705 - $1,715 region where it fell through support and went to visit $1,665. Time to fish or cut bait. Gold stopped just short of its critical 150 DMA ($1,716.23). If it fails here, gold must do further penance wallowing below $1,700. On the other hand, if it breaches $1,725 - $1,730 on Monday, where 'twill meet the downtrend line from the September high, I would confess it hath bottomed and buy with both hands.

On Comex today the GOLD PRICE gained $12.80, closing at $1,710.90.

In any event, I can't see it falling much below $1,625, but next week will speedily instruct us.

SILVER PRICE lodged beneath 3450c resistance and spun wheels and spit mud today, but couldn't rise above 3438. Comex spot month silver ended at 3417.5c, up 38.6c. GOLD/SILVER RATIO dropped from 50.256 yesterday to 50.063.

Silver's crucial 300 DMA awaits, but higher still, at 3490c. Silver touched but could not penetrate its 20 DMA today.

Trend in force remains in force until violated. Right now silver's trend is down, and it needs to close above 3460c to gainsay that.

There we are, stuck in the limbo between picking a bottom and waiting for a breakout. Next week will clear the crystal ball.

For all this week's excitement and the metals' stumbling, the scoreboard didn't change much, except for the US dollar index. Even that doesn't look to be a great advance, but considering what it recovered from, it looked good.

Y'all try to twist your minds around this. Greece announced that for this present bond recall deal, 86% of creditors subject to Greek law and 69% of international bondholders agreed to accept a 74% haircut. Yet today the International Swaps and Derivatives Association (ISDA), the derivatives industry group who decides whether a default has occurred and thus triggered payoff for holders of Credit Default Swaps, said that a Greek default had occurred, triggering $3 billion of default insurance. Why? The Greek government used a collective action clause to force the rest of the investors to take the same deal. Three billion sounds like a lot, but 'taint nothing like paying off the CDS on all the debt that was re-scheduled.

Markets never blinked over the ISDA's decision. It only further illustrates that the whole "bail out" benefits only the banks, and not Greece. None of that bail out money will perch in Greece, but will all fly clean through to the banks.

Now Spain, having witnessed the savage pain dealt out to Greece, is saying it won't take those austerity measures. I know the Europeans keep kicking these cans down the road, but one of these days, maybe this year, that can will turn out to be a land mine with 40 or 50 lb. of C4.

The financial and government system has now become nothing more than one vast criminal enterprise bent on harvesting all the rest of the world that belongs not to the Elite. They have made themselves the enemies of all honest men of good will. For now they have their way, sucking the world's blood, but it will not end well for them. As the Greeks used to say, the wheels of justice grind slow, but they grind exceeding fine. Keep grinding.

After Tuesday's killing nose dive from 12,970 to 12,740, the Dow laboriously climbed back to a high today at 12,968 and closed up 14.08 big points (0.11%) at 12,922.02. Tuesday's break fell out of a lethal rising wedge. Balance of the week's recovery only form a double top, making the gravitational outcome -- toward earth's core -- more sure and certain.

S&P500 will accompany the Dow. It gained 4.96 today (0.36%) to end at 1,370.87.

Stocks -- headed for new discoveries beneath the earth's crust.

US DOLLAR resolved a harrowing two day correction by shooting straight skyward today and closing above the morale-boosting 80 level at 80.003, up 86.4 or 1.11%, gigantical for a currency move. IF the buck can clear 80.12, 'twill shoot for 82.

The ever lively Japanese Yen today proved that you cannot possibly expect too little from any fiat currency. Even though the Yen has been waterfalling like Iguazu since 1 February, from 131.52c to 121.29c today (down 7.8%), today demonstrated it hath not stopped yet. Lost 1.07% more today. NGM in Europe and US are gonna get real mad at the Japanese NGM if they don't alter the yen's trajectory.

On 9 March 1861 the Confederate Congress authorized bills in denominations of $50, $100, $500, and $1,000. That wasn't a good omen for their unwillingness to inflate. In fact both North and South fought the war on inflation, but the South began with less specie so inflated more. It wasn't until the closing acts of the War that Confederate currency began its worst losses.

Y'all enjoy your weekend!

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.