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Thursday, April 19, 2012

Gold Price Posted a New Low and Higher High the First Half of a Key Reversal Must Close Higher Tomorrow

Gold Price Close Today : 1640.60
Change : 1.80 or 0.11%

Silver Price Close Today : 3177.10
Change : 29.30 cents or 0.93%

Gold Silver Ratio Today : 51.638
Change : -0.423 or -0.81%

Silver Gold Ratio Today : 0.01937
Change : 0.000158 or 0.82%

Platinum Price Close Today : 1575.80
Change : -0.80 or -0.05%

Palladium Price Close Today : 662.25
Change : 4.85 or 0.74%

S&P 500 : 1,376.92
Change : -8.22 or -0.59%

Dow In GOLD$ : $163.35
Change : $ (1.03) or -0.63%

Dow in GOLD oz : 7.902
Change : -0.050 or -0.63%

Dow in SILVER oz : 408.05
Change : -5.98 or -1.44%

Dow Industrial : 12,964.10
Change : -68.65 or -0.53%

US Dollar Index : 79.59
Change : 0.055 or 0.07%

Once again, the
GOLD PRICE close looks like a little mouse-burp nothing, but the closer you look the better it looks -- even though it posted a new low today.

Overnight the GOLD PRICE was rocking along between $1,638 and $1,646. Then the selling started about an hour before New York opened. Rapier flashing in the air, gold was driven back to $1,631.57, pushed away its adversaries, backed to the wall again, then advanced like one of Samson's foxes, straight up to $1,652.62. Too bad, couldn't hold on quite that high and was driven back again by closing time to $1,640.60, up only $1.80. 'Tain't much, but it is a new low followed by a higher close, the first half of a key reversal. To clinch that, GOLD must close higher again tomorrow. I smell mackerel in this action; somebody is bullying gold.

The SILVER PRICE pushed for 3200c today, but fell back at 3199c. One day chart resembles gold's, with an attack early in the morning that drove silver to 3136.7 (not a new low), and from which silver by 10:00 a.m. had risen to its day's high. Settled up 29.3c on Comex at 3177.1c.

That 3199c, by the way, is silver's 20 DMA, trip wire of a rally, and it marks the upper boundary of that falling wedge I alluded to yesterday.

It's not much of an uptrend, but the SILVER 5 day chart does show a series of higher highs and higher lows. Silver must stay above that 3136.7c level or risk sliding much further.

I've been staring at charts today, and am once again impressed that the overwhelming likelihood is that bottoms for silver and gold lie behind us, in December. Downside risk in gold from here isn't more than 6%, I reckon, and that would take a $100 drop. Not likely.

Another witness shouting that silver and gold have turned is the nationwide deadness in the physical silver and gold market. Dealers I talk to report having to take No-Doz during the day just to stay awake. Sure sign a bottom has passed.

Maybe the Great and Mighty NGM are engineering things to quietness here in the run-up to the IMF meeting this weekend. IMF chieftess, Christine Lagarde, is honking her horn like Clarabelle trying to get more suckers -- whoops, make that "nations -- to contribute to the IMF's bail out fund, which it almost certainly will need for Spain, Italy, and maybe even France.

If y'all have ever dealt with an alcoholic or drug addict, you know that they are unable to change, although as long as they keep on doing the same thing, the same results will come forth. In precisely the same fashion, but with significantly greater moral blame, comes the entire financial and monetary apparat of the world. We have to keep on watching them doing the same stupid thing -- inflating and bailing out -- which didn't work in the first place, and won't work in the last place. Worst of all, like Christine Lagarde, they pose as public benefactors when in fact they are no more that wretched vampires, sucking the lifeblood out of honest productive people.

Whoops. Sorry. Let us leave the truth behind and move on to markets and such-like theater.

Currency markets remained flat, except for the yen, which has a touch of nausea. Dollar index is now trading at 79.575, down an invisible 1.7 basis points. Euro rose 0.11% to $1.3136, nothing big or life-changing. Yen dropped 0.34%, still below its 50 dma (123.14c) and aiming at the 20 DMA beneath (122.14c). Now trading at 122.62c (Y81.55/US$1). If it crosses that 20 DMA we can conclude the yen's spicy rally was no more than a reaction in an on-going downtrend.

Woe is Wall Street! Dow today fell through that morale-damaging 13,000 line, down 68.65 (0.53%) to 12,964.10, right back to where it stood on Monday. S&P500 lost 0.59% (8.22) to 1,376.92.

Today I will venture yet another unpopular observation. Dow has formed a head and shoulders topping formation with a neckline at 12,700 and a nearly completed right shoulder and formation. Mark also that the MACD looks iffy and the RSI offers little encouragement.

Steve Saville pointed out in his Speculative Investor today (www.speculative-investor.com) that of all the stock indices in the wide world, only the Dow and S&P500 have made higher highs than 2010 and 2011, and some are below 2008 levels (Spain, e.g.). One is tempted to speculate that the Nice Government Men in the US -- the Plunge Protection Team -- and the Fed want to keep those Potemkin indices up to keep all the investing ovines in the fold. Did y'all ever see Jim Carrey in the movie, The Truman Show?

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

- Franklin Sanders, The Moneychanger
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© 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.