Friday, May 11, 2012

Gold Price was Hammered Hard this Week Down $61.10 Gains Made Swapping Gold into Silver

Gold Price Close Today : 1,583.60
Gold Price Close 4-May : 1,644.70
Change : -61.10 or -3.7%

Silver Price Close Today : 2885.8
Silver Price Close 4-May : 3038
Change : -152.20 or -5.0%

Gold Silver Ratio Today : 54.876
Gold Silver Ratio 4-May : 54.138
Change : 0.74 or 1.4%

Silver Gold Ratio : 0.01822
Silver Gold Ratio 4-May : 0.01847
Change : -0.00025 or -1.3%

Dow in Gold Dollars : $ 167.36
Dow in Gold Dollars 4-May : $ 163.87
Change : $ 3.48 or 2.1%

Dow in Gold Ounces : 8.096
Dow in Gold Ounces 4-May : 7.927
Change : 0.17 or 2.1%

Dow in Silver Ounces : 444.27
Dow in Silver Ounces 4-May : 429.17
Change : 15.09 or 3.5%

Dow Industrial : 12,820.60
Dow Industrial 4-May : 13,038.27
Change : -217.67 or -1.7%

S&P 500 : 1,353.39
S&P 500 4-May : 1,369.10
Change : -15.71 or -1.1%

US Dollar Index : 80.286
US Dollar Index 4-May : 79.505
Change : 0.781 or 1.0%

Platinum Price Close Today : 1,458.90
Platinum Price Close 4-May : 1,523.80
Change : -64.90 or -4.3%

Palladium Price Close Today : 599.80
Palladium Price Close 4-May : 649.90
Change : -50.10 or -7.7%

It's been a long while since the silver and GOLD PRICE (let alone the platinum metals) have been hammered this hard in one week. GOLD lost $61.10 (3.7%), Silver lost 152 cents or 5%. Stocks are wallowing in deep swells, too, down 1.7%. To what do we owe all this joy? The US dollar rose 1% last week. Well, and the euro coming unraveled like Frankenstein at the stitching.

Clearly, I read the metals wrong yesterday. Today they contradicted yesterday's hopeful signs by closing below yesterday's lows. Gold has all but invalidated its falling wedge formation and silver already has, tumbling down out of the formation.

The GOLD PRICE gave up $11.50 to close Comex at $1,583.60. Silver misplaced 27.8 cents to end at 2885.8c.

Gold was driven down to $1,572.34 long before New York opened, climbed to $1,590.50 by 10:30, then lost energy the rest of the day.

Now that the GOLD PRICE has fallen to $1,583.60, it's time to reckon what will happen if this level holdeth not. First support appears at the low- before-last in December at $1,562.50, next steps forth at $1,535 - $1,525. Next week promises to be bloody unless gold can scramble back above $1,600.00

Only bright spot in today's trading for me was making a lot of swaps from gold back into silver. One customer had a 47% gain in silver ounces over the silver he traded in last year. Now most of them were in the 10% to 25% range, but still, that's not a bad gain for an investment that payeth no interest or dividends.

The SILVER PRICE made a new low for this move at 2844.6c. High could not rise above 2910c. Next support for silver hides at 2812c, the early December low, but reaching the ultimate December low at 2615c does not lie outside possibility.

I am aware how gloomy all this seems, but the SILVER RSI has dipped below 30, indicating it is heavily oversold. MACD is falling still, but hasn't neared December's lows. About the time y'all think it’s the end of the world -- or the bull market at least -- silver and gold will surprise you. Legendary oilman H.L. Hunt said, "Never get really elated in victory; when times are tough, never get down." I may be as self-deceived as an ugly rich boy in love with a show girl, but I expect lows are near. May see them next week, although you'll feel as if somebody threw you into a cement mixer by the time it's over.

It all boils down to this: What do you trust? The paper money system, that since 1913 has dragged the dollar down from $20.6718 to the gold ounce to $1,583.60 today? The system that picks your pocket every day, and worse, is now run by thieves, incompetents and tapeworms? Or gold and silver, which mankind has valued since the sun came up on Eden? When I talk about this some folks laugh at me and point out that the system has been chugging away since 1913. This differs nothing from telling me that a 1913 Stanley Steamer is a great car because it still runs. The world can no longer afford parasite capitalism, crony central banks, crooked banks, and prosperity-through-government-borrowing. It's breaking up, and I'd rather belong to the new world building than the old world dying.

But y'all hang on to them yankee dollars. I understand Confederate money is worth more than its face value today.

US DOLLAR INDEX today is trading 11.7 basis points (0.15%) higher. Greek politicians of the left won't be able to form a government, so more elections will probably be announced this weekend, according to a friend of mine there. If so the euro will gap down on Monday's open and dollar will rise more.

Adding fuel to the dollar's tank were JP Morgan Chases revelations that it lost $2 billion in 6 weeks on derivatives. Mmmm. . . If THEY can't do it, who can? CEO Jamie Diamond's admissions raise further doubts about other big banks. Where have all the adults gone? Who put these ridiculous infants in charge?

STOCKS had a ragged day, falling off the opening, rising, then falling for the day. Dow lost 34.44 (0.27%) to 12,820.60. S&P500 lost 4.6 (0.34%) to close at 1,353.39. Dow in Gold Dollars remains hovering near the top of its diamond formation, not yet ready to yield and fall.

End to all discussions of whether stocks will soar or sink stands in those head and shoulders tops on the S&P500 and Dow's charts. S&P500 drilled through the neck line earlier in the week -- a "break down" -- rose back to the neck line for a final kiss good-bye yesterday, then plunged again today. Dow has all but penetrated the neckline of its own HandS, and will do when it crosses 12,650. MACD and RSI indicators both point earthward, and volume has risen on the decline. Add to that the seasonal summer desert approaching for stocks: "Sell in May, and go away."
Somebody explain to me what cause for optimism lurks here.

Y'all enjoy your weekend!

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.