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Tuesday, May 08, 2012

The Gold Price Took a Big Hit Today Losing $34.60 Closing $1,604 How Far Will it Fall?

Gold Price Close Today : 1604.00
Change : (34.60) or -2.11%

Silver Price Close Today : 2941.50
Change : 65.8 cents or -2.19%

Gold Silver Ratio Today : 54.530
Change : 0.043 or 0.08%

Silver Gold Ratio Today : 0.01834
Change : -0.000014 or -0.08%

Platinum Price Close Today : 1507.60
Change : -18.00 or -1.18%

Palladium Price Close Today : 623.40
Change : -22.20 or -3.44%

S&P 500 : 1,363.72
Change : -5.86 or -0.43%

Dow In GOLD$ : $166.66
Change : $ 2.57 or 1.57%

Dow in GOLD oz : 8.062
Change : 0.124 or 1.57%

Dow in SILVER oz : 439.64
Change : 7.07 or 1.64%

Dow Industrial : 12,932.01
Change : -76.52 or -0.59%

US Dollar Index : 79.87
Change : 0.305 or 0.38%

The Big Hit landed on the GOLD PRICE today. It lost $34.60 to close Comex at $1,604.00, down 2.11%. Silver gave up 65.8 cents to shutter the shop at 2941.5c.

Before I say one word about the silver and GOLD PRICE and bottoms and targets, I'll tell y'all that we'd all be better off and shuck a lot of anxiety if we just decided to ride the primary trend, buy when the price drops, and trust God for the outcome. But my phone is nearly melting with all the folks calling asking what we think the metals will do, and saying they're going to wait for another little drop.

They'll never get it bought, because at every price, they'll still be waiting for "just a little more." Bulls get rich, and bears get rich, but pigs get slaughtered.

So having warned against trying to catch a falling knife, I will now attempt to do it, natural born fool that I am.

Today the GOLD PRICE dove through the upper boundary of that falling wedge pattern. Likely it will touch that lower boundary, now about $1,575, before it stops. (Ask yourself if this putative 1.5% is worth waiting for.)

However, full disclosure wants to add that if that bottom boundary holdeth not, gold might plunge to next support, now about $1,500.

Times like these you have to figure out what you believe and hang on to it. If we are near gold's bottom -- and I believe we are -- this offers a spectacular buying opportunity, but only if you can cinch up your fears and do it. Otherwise it only offers those bragging rights that begin, "One time I ALMOST bought gold right near the bottom, but . . . "

The SILVER PRICE cascaded down 65.8 cents to 2941.5c. It sliced clean to the bottom boundary of the falling wedge. Now it stands at the crossroads.

Road # 1, silver stops right here. (Low today was 2911c).

Road #2, silver steps through that boundary, invalidating the bullish falling wedge, and seeking 2812c, or even the mid-2700c. It would reach those levels if its relation to certain moving averages matched those at the December 2011 lows. However, those are all so oversold already that silver may not match those December lows

Whatever y'all do, buy only the US 90% SILVER coin, which is an eye-popping $2.66 an ounce cheaper than silver American Eagles and $1.01/oz cheaper than silver rounds. Never forget: OVER TIME, PREMIUM ALWAYS DISAPPEARS.

In this Best of All Possible Worlds, Spain's fourth largest bank will be bailed out to the tune of $13 bn. I'm telling y'all, saving them banks is becoming a mite pricey, but I reckon the whole world's enslaved to them.

Y'all can moan and complain about gold and silver tumbling, but as long as the banks are in charge, both metals have a secure and brilliant future.

US DOLLAR INDEX took off the velvet gloves today and rose an unambiguous 30.5 basis points (0.31%) to 79.869. Close wasn't quite unambiguous, though, as it perched plumb on the upper boundary of the even-sided triangle. Intraday yesterday and today the dollar punched to 80. That and the European turmoil argue the dollar will clamber higher.

You didn't want to own euros today. Euro dropped 0.31% to $1.3013, but that $1.3000 support has the life expectancy of a Tootsie Roll in a kindergarten thirty minutes before lunch. Lower it will go.

Yen remained fairly flat again today, up 0.08% to 125.26c (Y79.83/US$1). Should go higher, although there's not a fundamental reason in the world for it, as it's the rottenest of all the rotten fiat currencies.

STOCKS had water lapping over the gunwales today from the moment they launched. Dow's low appeared at 12,810, but "Somebody" came to the rescue late in the day and it closed down only 76.52 (0.6%) at 12,932.01. S&P500 lost 5.86 or 0.43% to end at 1,363.72. S&P500 fell clean through the neckline of its head and shoulders top pattern while the Dow worked on completing the right shoulder of its HandS. Candide couldn't find ground for optimism here.

Yet strange to recount, the Dow in Gold Dollars today closed exactly at its March high, G$166.66 (8.062 oz). Four days ago it made a slightly higher high, but that top of this range has contained it for months as it forms a diamond top. One day soon it will break down, taking stocks much lower and gold higher, or stocks lower faster than gold.

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. No, I don't.