Wednesday, April 18, 2012

The Gold Price Gave Back $11.50 to Close at $1,638.80 Watch $1,638.24 Tomorrow as it Shouldn't Cross that Line

Gold Price Close Today : 1638.80
Change : (11.50) or -0.70%

Silver Price Close Today : 3147.80
Change : 18.70 cents or -0.59%

Gold Silver Ratio Today : 52.062
Change : -0.056 or -0.11%

Silver Gold Ratio Today : 0.01921
Change : 0.000021 or 0.11%

Platinum Price Close Today : 1576.60
Change : -5.20 or -0.33%

Palladium Price Close Today : 657.40
Change : -5.60 or -0.84%

S&P 500 : 1,385.14
Change : -5.64 or -0.41%

Dow In GOLD$ : $164.40
Change : $ 0.13 or 0.08%

Dow in GOLD oz : 7.953
Change : 0.006 or 0.08%

Dow in SILVER oz : 414.03
Change : -0.17 or -0.04%

Dow Industrial : 13,032.75
Change : -82.79 or -0.63%

US Dollar Index : 79.59
Change : 0.055 or 0.07%

GOLD PRICE gave back $11.50 to shutter Comex at $1,638.80. GOLD PRICE defended its $1,638.24 low thrice, then pulled up and away a bit. Watch that $1,638.24 tomorrow, because gold shouldn't cross that line if it does intend to rise soon.

I try not to allow myself to see things on charts that aren't there, and force myself to see what is there. So I will report that the 5 day gold chart shows a flattish (that makes one suspect it) upside down head and shoulders in gold. Think of the neckline about $1,656, with a left shoulder on Monday, a head in that sudden down-spike on Tuesday, and a right shoulder today. If it is an upside down Hands, it targets another sprint for $1,675.

Mercy, this narrowing trading range is wearing me out. Here soon silver and gold will break through in a stout move, but can't tell yet which way that will be. And of course, there's always Europe with its looming financial crisis that might burst forth any time, changing everything -- but which way, for which metal? In 2008, investors dumped everything, stocks, gold, silver, in favor of dollars, but back in the summer they were dumping euros and dollars for gold. Which way will they jump this time?

Heavens above, I don't think like they do. If I was running the world, most of the people running it now would be in jail, a lot of those in jail would be turned loose, everybody would be good looking, and nobody would sweat much. Like I say, I just don't think like the public.

The SILVER PRICE had another tight-lipped day, giving us no clue what's on its mind. It sank 18.7c to 3147.8c Oh, it's left a little scoopy pattern on the 5 day chart since the weekend, but that doesn't tell you anything. It must hold 3120c or 'twill sink like your algebra average after the teacher caught you reading formulas off your palm during a test. Low today came at 3134c, and I really wouldn't like silver even to draw nigh that number tomorrow.

One thing I did notice on the longer term silver chart that causes the heart to leap: I believe silver has traced out a bullish falling wedge pattern. If so, it might possible fall to the bottom boundary, now about 3000c, then blast right back up. Wedges, remember, point the OPPOSITE direction to their breakout, so falling wedges break out upwards.

It's springtime in Tennessee, and I'm fretting to be outside. That doesn't make watching a taxing, vexing sideways market any easier. Still, y'all know that eventually the silver and GOLD PRICE will resolve this the only way they can in a bull market: by rallying much, much higher.

On the Internet today I read, "The Eurozone could break up and trigger a 'full-blown panic in financial markets and depositor flight' and a global economic slump to rival the Great Depression, the IMF warned yesterday."

Setting aside for the nonce the IMF's need to toot the crisis horn in order to boost its own powers, let us calmly digest this statement. The IMF opines that the still-unaddressed European sovereign debt (and related bank insolvency) crisis could trigger a financial market panic like 2008's in the US "and depositor flight." I reckon that means depositors would try to withdraw their money from banks, an old-fashioned bank run.

Well, lots of luck, Depositors, cause there ain't no money in them banks. Naw, I don't mean that they are loaded to the gills with bad paper, although that's true, too, but literally, there ain't no money there, not even paper money. Banks keep only a tiny bit of cash on hand. Back in 1998 there was only $1,177.54 per head circulating in the whole US.

Latest (3/12, from St. Louis Fed) reading for Federal Reserve Currency issued is $1,033.1 billions. 75% or more of that circulates overseas, so for 313,387,357 Americans, that leaves in circulation $824.14 per red-white-and-blue pate.

And I'll bet sitting here not 10% of y'all have as much as $1,000 in cash (green paper money) on you now or at home, although most of you spend more than $3,000 a month just to stay dry and fed. And to make sure y'all don't wise up and try to get your hands on some pictures of dead presidents, the US government treats dealing in cash or even holding it above certain amounts as a crime.

As I said, Depositors, in the event of a bank run, y'all stand the same change of getting cash that a three-legged June bug stands at a Rhode Island Red chicken convention on a hungry day.

All that constitutes yet another sound reason to get your hands on always reliable US 90% silver coin and gold coin.

I warn y'all, the sun is shining, the wild flox and wild azaleas and tulip poplars are blooming, and my mind is not on staying in this office. But here goes.

Dollar index today moved a bare 5.5 points to 79.585, leaving the dollar's intent still unclear, although with a bias to the upside that can only be contradicted by a close below 79.2. Euro ended down 0.05% at $1,3119, still trending down. Yen stumbled and tumbled today, closing down 0.49% to 123.07c (y81.25/US$1). Chart shows that's below the 50 dma (123.38) but it also gapped down, leaving behind what might be an "island reversal." That occurs when a market rallies, gaps up, trades sideways, then gaps down again, leaving a little island behind. It's a right deadly and reliable reversal pattern.

STOCKS showed what they were made of today, falling back to support just above 13,000. Dow closed down 82.79 (0.63%) at 13,032.75; S&P500 lost 5.64 (0.41%) to 1,385.14. For the Dow, that's below the 20 day moving average (13,057) which means the Dow isn't getting any traction here for higher prices.

But then, I can say that because I don't work for the yankee government, the Fed, or Wall Street.

And the legitimate government agents never did get their assault rifles.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
10:00am-5:00pm CST, Monday-Friday

© 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.