Tuesday, April 03, 2012

The Gold Price "Must Hold" Support is $1,630 I Expect Higher Lows Tomorrow

Gold Price Close Today : 1670.00
Change : (7.50) or -0.45%

Silver Price Close Today : 3325.0
Change : 16.7 cents or 0.50%

Gold Silver Ratio Today : 50.226
Change : -0.480 or -0.95%

Silver Gold Ratio Today : 0.01991
Change : 0.000189 or 0.96%

Platinum Price Close Today : 1640.40
Change : -9.50 or -0.58%

Palladium Price Close Today : 652.40
Change : -3.25 or -0.50%

S&P 500 : 1,413.38
Change : -5.66 or -0.40%

Dow In GOLD$ : $163.39
Change : $ (0.05) or -0.03%

Dow in GOLD oz : 7.904
Change : -0.003 or -0.03%

Dow in SILVER oz : 396.98
Change : -3.97 or -0.99%

Dow Industrial : 13,199.55
Change : -64.94 or -0.49%

US Dollar Index : 79.37
Change : 0.599 or 0.76%

The silver and
GOLD PRICE were slapped around by the Fed, too. Although gold closed down only $7.50 (not many people knew what the Fed's announcement held, I reckon) to $1,670, while the SILVER PRICE actually gained 16.7c by Comex close, ending at 3325c. Then came the Fed's moldy FOMC minutes, and just like flying a jet plane in a movie, things went bad fast.

Time the smoke and dust cleared, gold had touched $1,638.90 and silver 3245. Well, shucks! Should I cry or just wring my hands. Didn't do any more than drive them both back to their uptrend lines. If it was victory the Fed was looking for, this wasn't it.

My "must-hold" lines are $1,630 for gold and 3140c for silver. I'm speculating that tomorrow they will see lows no lower than today's.

Like a pit bull-alligator cross, I am holding on. I think the SILVER PRICE and the GOLD PRICE have seen their lows, and unless they breach my "must hold" points, I'm clamped down on that and won't let go till Bernanke thunders. Mercy, I won't even let go then, knowing what a little mouse-burp deal that would be.

Mercy, we got skewered by 3 week old news today -- yet another reason to love that good old stabilizing, prosperity-promoting Federal Reserve.

They released minutes of the FOMC meeting 3 weeks ago which suggested they saw little need for more stimulating, which suggests they MIGHT not inflate with another round of money printing like QE1 and QE2.

Here we enter into the wholly irrational realm of reading the Fed's tea leaves. Market today read it that Fed will back off inflating (well, not inflate any faster than they already are) so if nature takes its course, interest rates must rise and the dollar's value will bloom.

Then there is this natural born fool from Tennessee, who trusts the Fed to (1) speak their minds truthfully or (2) have any mind at all or (3) not inflate, about as much as I trust a 6 foot rattler not to bite me if I warm him up in my bosom.

I think the Fed has a problem. Every time they make one of these "we're going slow on inflation" announcement, interest rates rise. But their announced policy -- to stimulate the economy -- is to keep interest rates near zero (to match their economic IQ). So how will they keep rates near zero if their own words make them rise? Why, by buying more bonds. And how do they do that? By printing more money.

The phrase "shoot yourself in the foot" springs to mind.

It pains the rational mind to deal with such trifling liars, cheats, and fools. Triflin' -- that's the best I can say about 'em.

Stocks dropped on the Fed's news. Dow gave back 64.94 (0.49%) to 13,199.55 and the S&P500 dropped 5.66 (0.4%) to 1,413.38.

Stocks are still defying gravity, and fool that I am, I have never seen anybody succeed at that endeavor.

Fed's announcement drove the dollar up 59.9 basis points or 0.77% to 79.366. That amounts to nothing more than a kiss-back to the uptrend line it lately broke down through (I'll try to string more prepositions together, but how I know not to). 'Tain't nothing permanent or substantial there. All pop, no corn.

Euro took it on the chin, losing 0.68% to $1.3234. Continueth the same indecision. Yen was knocked back below its 20 DMA, dropping 0.93% to 120.71c (Y82.84). Till giving Nice Government Men fits because it wants to rise.

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.