Gold Price Close Today : 1659.50
Change : 17.00 or 1.04%
Silver Price Close Today : 3167.0
Change : 15.7 cents or 0.50%
Gold Silver Ratio Today : 52.400
Change : 0.278 or 0.53%
Silver Gold Ratio Today : 0.01908
Change : -0.000102 or -0.53%
Platinum Price Close Today : 1594.20
Change : -18.70 or -1.16%
Palladium Price Close Today : 640.45
Change : -4.75 or -0.74%
S&P 500 : 1,358.59
Change : -23.61 or -1.71%
Dow In GOLD$ : $158.40
Change : $ (4.31) or -2.65%
Dow in GOLD oz : 7.663
Change : -0.209 or -2.65%
Dow in SILVER oz : 401.51
Change : -8.78 or -2.14%
Dow Industrial : 12,715.93
Change : -213.66 or -1.65%
US Dollar Index : 79.78
Change : -0.104 or -0.13%
GOLD PRICE romped right along today, up $17 to close Comex at $1,659.50. Gold has stoutly climbed off its lows toward that $1,680 resistance. Today's low defended $1,632.50, and gold high (1,662.70) pressed almost $15 higher than yesterday.
What could go wrong with this picture? the GOLD PRICE could drop below $1,630, or it might fail at $1,680. Needs to climb over that 200 DMA (now $1,690) first, then beat $1,760 resistance.
I reckon some of y'all will look back in a few short months and wonder why you didn't buy gold at these prices.
SILVER PRICE gained a measly 15.7c to 3167c. Today's low at 3116c improved over yesterday's 3099c, but sluggishly. High at 3184c fell short of yesterday's 3192c.
The SILVER PRICE and the GOLD PRICE both experienced the same pattern today. About 10:00 a.m. New York time some big seller stepped into the metals markets and drove them down, down until 11:30, but then both bounced back like India rubber balls to close the day higher. That is fairly strong action, but a bit "juberous" ("dubious") as my grandmother might say. For all the gains, silver was weaker and the GOLD/SILVER RATIO rose from 52.121 to 52.400, not much, but symbolically disappointing.
For now both metals are holding their own, GOLD is struggling upward, and both are headed higher if they can hold on at 3100c and $1,630.
Right now the spring of high hopes bloometh yet with optimism. Just wait till the hard freeze of economic reality bites them. Dollar and stocks won't look so attractive then.
A few days ago I mentioned that trading in and out trying to catch highs and lows was a very bad idea, among other reasons due to transaction costs of 7.5%. Apparently not many folks understand that silver and gold dealers operate at a profit, and they make that profit by charging you when you trade. EVERY investment has a spread between buy and sell, and you must take that into account. With physical silver and gold, that total transaction cost amounts to 7-1/2 to 10%. If you buy gold at $1,000, it must rise to $1,075 for you to break even. That 7.5% includes the costs you pay when you buy and when you sell. If you buy in smaller amounts, your transaction cost will be a little higher.
Now turneth the bright beacon of the city on the hill to red. O'Bama's plan to tax millionaires at least 30% dresses up envy and presents it as virtue. What a discovery! None of the ages have before been able to discern that envy is actually fairness disguised. Well, despite O'Bama's Marxist morality, envy remains evil, and his Marxist lipstick only makes it uglier. It may be rare to be rich, but 'tis not evil. Envy, on the other hand, is right common.
And by the way, Warren Buffett may be rich, and he may be savvy, but morality he clearly does not understand. Otherwise he would not let his name front for O'Bama's appeal to envy.
Here's my interpretation of Bernanke's speech last night at Stone Mountain, Georgia, in the shadow of carvings of RE Lee, Jefferson Davis, and Stonewall Jackson. (Bernanke typifies what 250,000 Confederates died to prevent):
"More regulation, that already failed to prevent every crisis since the Great Depression.
"I will let money market funds out of their contractual obligation to redeem shares at $1.
"I want more surveillance and regulation of markets, since that has already succeeded so well.
"Nope, I refuse to apply the Volcker Rule that would forbid banks from using depositors' money to fund their own risky investments.
"Yep, in any crisis I will once again flood markets with liquidity, despite the Dodd-Frank Act.
"Yep, I will spew chin-boogie about moral hazard, but when crisis hits I will still bail out all the Wall Street cronies, moral hazard be damned.
"I will use regulation to manipulate housing prices higher, thus guaranteeing the bust will last longer because I will keep prices from dropping so that the market can clear."
These are just The Moneychanger's interpretation, but stripped of all the turgid verbal superstructure, that's what I think he said. In other words, as I intimated yesterday, "he will inflate more because he can do no other."
Were you tired of dead markets? Today most all went over the edge.
Generally I manfully resist the temptation to say "I told y'all so," and so I will say nothing at all when I report that stocks fell from the sky like so many grackles hit with the Planet X death ray.
Dow lost 213.66 (1.65%) to close ever further from 13,000 -- 12,715.93. They also dropped AND closed below the last low, not to mention the 20 and 50 day moving averages. S&P 500 did a tad worse, losing 23.61 (1.71%) to close 1,358.59.
Today's fall crashes through the most generous interpretation of the uptrend line, and targets 12,500 at least before it stops.
US DOLLAR INDEX, proving once again the irrationality and dim perception of markets, rose 8.2 basis points (0.11%) to 79.862 in spite of the Bernancubus guaranteeing last night that he will inflate more. Yet that small rise changeth nothing great -- yet. Dollar's 20 DMA stands at 79.58, but the real resistance is 80. Below that the dollar stands in danger of falling further.
Yen is on a tear. After gapping up yesterday (always respect those gaps) it gained 1.03% today to end at 123.95c (Y80.68). Lurking right beneath its 50 DMA at 124.16, and probably will pierce that tomorrow. Euro is looking pretty shabby, now that Spain is beginning to decompose. Pensioners are committing suicide in Greece and Italy to protest austerity measures that cut their pensions 75% or more. Euro dropped 0.18% today to $1.3082, below all moving averages including the tell-tale 62 day.
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.