Wednesday, April 04, 2012

Silver and Gold Price Both Fell and I Bought as Bull Market in Silver and Gold Continues Unharmed

Gold Price Close Today : 1612.30
Change : -57.70 or -3.46%

Silver Price Close Today : 3102.90
Change : -222.1 cents or -6.68%

Gold Silver Ratio Today : 51.961
Change : 1.736 or 3.46%

Silver Gold Ratio Today : 0.01925
Change : -0.000665 or -3.34%

Platinum Price Close Today : 1596.60
Change : -43.80 or -2.67%

Palladium Price Close Today : 633.05
Change : -19.35 or -2.97%

S&P 500 : 1,398.96
Change : 14.42 or 1.04%

Dow In GOLD$ : $167.64
Change : $ 7.35 or 4.59%

Dow in GOLD oz : 8.109
Change : 0.356 or 4.59%

Dow in SILVER oz : 421.37
Change : 31.90 or 8.19%

Dow Industrial : 13,074.75
Change : 124.80 or 0.96%

US Dollar Index : 79.74
Change : 0.314 or 0.40%

GOLD PRICE dropped a massive $57.70 (3.46%) today. (Gold in euros dropped through its 200 DMA!). Gold ended on the low, at $1,612.30. Silver fell a more massive 221.1c or 6.7% to 3102.9c.

In January the
GOLD PRICE broke out upside, through the downtrend line from the September high. It hit a high at $1,792.70, then dropped back in a correction to kiss that downtrend line, skidding along it but not penetrating it.

Now gold stands right above the peak of that triangle, and if it stoppeth not at $1,600, then twill tumble toward $1,550. Momentum is firmly down, as gold stands below all the moving averages. How much more oversold might the
GOLD PRICE get? Doesn't seem likely it can get more oversold, but then, I've already been proven wrong so I'll just shut my mouth and watch.

Still, I bought a little gold today, just to keep from getting in the habit of cowardice.

SILVER PRICE low today came at 3098c, but it closed at 3102.9c. I bought some silver, too.

I can't really say much until a few more days' trading clears the picture, but as long as silver doesn't break 3000c or gold $1,600, they are okay. If they break those levels, then more pain will come our way.

Think "temporary." Bull market in silver and gold continues unharmed by today's shenanigans. As they say in East Tennessee, "Fuhgeddabowdit."

Housekeeping: I will not publish a commentary on Good Friday -- on purpose. We will not be at work on Good Friday.

A drop like yesterday's and today's may have some of y'all thinking about trading in and out of your long term silver and gold positions.

Don't do it. Big mistake.

Sure, you think that you can pick tops to sell -- so try it on paper, and see how well that works. Sure's the world, you'll sell and metals will soar instead of falling.

And when you sell, you have to pay a 7.5% transaction cost on physical gold and silver, you have to net 7.5% just to break even.

Then there's the riddle of when to get back in. Most people miss the bottom, or it doesn't go down and hit their target, and so they watch silver and gold zoom higher while they are sitting there holding scrofulous green dollars and wondering how they outsmarted themselves.

Think: What strategy made you buy silver and gold? Riding the primary trend, the bull market that lasts 15 - 20 years. You don't make profits by trading in and out, scalping off a few points here and there. And by chasing those penny profits, you'll end up losing the hundred-dollar profits.

Does my "ride the bull" strategy work? Ask the people whom I talked out of selling silver at 800c when they had doubled their money.

Now imagine that I were Bernard O'Bama or Ben Bernancubus Bernancubus. Imagine further that yesterday I opined that silver and gold would not drop lower, but in fact they did. At this point I would weave, dodge, bob, and squirm, trying to explain how "lower" really was "higher," in the teeth of hoary mathematics.

Ahh, but ease your troubled minds! I am not one of The Mighty Masters of The Universe, so when I am wrong, I can just chuckle and say, "Well, I warned y'all I am just a natural born fool from Tennessee. Durned if I didn't get it wrong!"

I got this much right: when they fell through my support points, they plunged.

The US DOLLAR, contrary to all reason, rose today 31.4 basis points or 0.4%. Good for the dollar, it closed above its 20 DMA (79.55) at 79.742. Technically that's about all it has going for it, and it's an ugly green besides.

The dollar's little surge pulled the rug out from under the euro. It dropped 0.7% today to $1.3142. That's awful, because not only did it gap down, it also fell below the critical 62 day moving average. From here it ought to fly about as well as a Holstein cow dropped out of a C140.

Japanese yen rose 0.47% to 121.28c (Y82.45). Remains above its 20 DMA, and should head higher.

Stocks took it on the chin today. Dow dropped 124.8 (0.95% to 13,074.75 S&P500 dropped even further, 14.42 or 1.02%, and fell below the morale-bruising 1,400 level to 1,398.96.

Dow is now flirting again with 13,000 level, and stands below its 20 DMA (13,138). Beneath stands the 50 DMA at 12,970, and when the Dow crosses that the Investment Rats will begin deserting the good ship Wall Street -- fast.

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.