Wednesday, May 09, 2012

The Gold Price Tumbled Again With an Ominous Low of $1,580.54 Closing $1,593.70

Gold Price Close Today : 1593.70
Change : (10.30) or -0.64%

Silver Price Close Today : 2919.70
Change : 21.7 cents or -0.74%

Gold Silver Ratio Today : 54.584
Change : 0.053 or 0.10%

Silver Gold Ratio Today : 0.01832
Change : -0.000018 or -0.10%

Platinum Price Close Today : 1498.40
Change : 1,347.80 or 894.95%

Palladium Price Close Today : 614.00
Change : -9.40 or -1.51%

S&P 500 : 1,354.58
Change : -9.14 or -0.67%

Dow In GOLD$ : $166.48
Change : $ (0.16) or -0.10%

Dow in GOLD oz : 8.054
Change : -0.008 or -0.10%

Dow in SILVER oz : 439.60
Change : -0.06 or -0.01%

Dow Industrial : 12,835.06
Change : -97.03 or -0.75%

US Dollar Index : 80.16
Change : 0.248 or 0.31%

Today the GOLD PRICE tumbled again, down $10.30 to close beneath $1,600 at a morale bruising $1,593.70, but only $2 from the high. Low was an ominous $1,580.54. That is probing the bottom boundary of the falling wedge. Resolving that usually bullish falling wedge with a plunge would be very bad juju.

On both the five day silver and GOLD PRICE charts there begins to form an upside down Hands that will signal a reversal, IF gold falleth not through $1,580 (today's low) and silver toppleth not through 2860c.

The SILVER PRICE pricked the bottom boundary of that falling wedge with its 2861 cent low, but closed within the wedge. Is that an aberration or a violation? Silver is sloppy in observing chart lines, often spiking over or under without following through. No way to know until it follows through up or down.

Silver closed near the 2931c high of today's range, losing 21.7c to close 2919.7c on Comex.

Checking silver as a percentage of its various moving averages, it is approaching last December's low readings. Unless silver intends to make this a mighty slump indeed, that whispers that an end to this decline draws nigh.

Mmmm. Why do the 5 day Dow, GOLD, and silver charts look so much alike? Something ain't right. Over the long term, stocks and gold and silver move opposite to each other, because what drives gold up -- inflation -- drives stocks down (by filling the economy with uncertainty and inefficiency). But markets aren't logical in the short term, and these irrational divergences can persist a long time.

Dollar index rose 24.8 basis points (0.32%) today to 80.155. 'Tis not that the dollar is strong or attractive for its high interest rate, but that the unreasoning, madding mob's fear is driving them into US dollars and US government treasuries. Want to know what sort of looney world we live in? In this looney world, US dollars (pure moonbeams) and US government Debt (moonbeams and dope smoke) are counted "safe." Surely somewhere in this universe there's a planet that makes sense. I want to go there.

The "flight to safety" is buoying up the sinking dollar, flagellated by fear that the euro and lots of European government debt and banks will fall face down in the financial mud. Euro dropped beneath $1.3000 today, gapped down and closed down 0.5% at $1.2933. By now half the speculating world is short euros, so they'd better hope no Eurocrat comes up with some fix that would drive the euro suddenly skyward.

STOCKS were swimming in concrete shoes today. At the low they reached 12,748, but ended the day at 12,835.06, down "only" 97.03 (0.75%). S&P500 lost 9.14 (0.67%) to 1,354.58.

Five day charts for both stocks indicate that in the last two days they MIGHT have begun turning around. On the longer term charts the S&P500 has penetrated the neckline of its head and shoulders top formation and kept on falling. Dow today nearly completed the right shoulder of its HandS, and will complete it when it closes about 12,650. That argues against anything more that a temporary turnaround.

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. No, I don't.