Gold Price Close 25-May : 1,568.80
Change : 51.70 or 3.2%
Silver Price Close Today : 2849
Silver Price Close 25-May : 2837
Change : 0.12 or 0.4%
Platinum Price Close Today : 1,431.70
Platinum Price Close 25-May : 1,424.70
Change : 7.00 or 0.5%
Palladium Price Close Today : 612.30
Palladium Price Close 25-May : 589.95
Change : 22.35 or 3.7%
Gold Silver Ratio Today : 56.88
Gold Silver Ratio 25-May : 55.30
Change : 1.58 or 1.03%
Dow Industrial : 12,393.45
Dow Industrial 25-May: 12,529.75
Change : -136.30 or -1.1%
US Dollar Index : 83.08
US Dollar Index 25-May : 82.27
Change : 0.81 or 1.0%
Oh, the silver & GOLD PRICE still had to torture their fans a little, just to make sure they are faithful. So gold made something like a double bottom, as did silver, on Wednesday, then again today tested those lows. Oh, but what happened next?
The GOLD PRICE range today stretched from $1,546.08 to $1,629.30. It closed at $1,629.30, worth $57.90 more than when it went to bed last night. That leaves a beautiful, strong, enchanting chart behind, a bottom with a mighty surge through the downtrend line from the March high at $1,792.70 and just beneath the $1,625.36 fifty day moving average.
Much more encouraging is the way gold sliced through $1,580 and $1,600 resistance and leapt to the next ($1,625) level. Folks, this is powerful movement. Gold cannot send you a louder message that it has left its low behind it and begun the next rally. NOW is the time to buy -- now. Silver shot like a meteor over at 148c range today, from 2720.7 to 2869 cents. Closed near the top of the range at 2849.7c. Once silver gapped up at 2775c, in 3-1/2 hours it reached 2869c, a straight-line rise on the chart.
In the last two weeks the SILVER PRICE has left behind a serial rising tops. First hurdle looking silver in the eye is 2900c, but the jump from 2900c to 3000c won't take long. 50 DMA stands at 3037c, but silver's major goal is the 300 day moving average at 3475c. Remember that when stocks are falling against gold they tend to slow silver down as well, so expect silver to look somewhat lazy compared to gold over the next couple of weeks. Yet lose not sight of the ground plan: silver has bottomed, silver will rally.
GOLD/SILVER RATIO today closed at 56.866, still a respectable place to swap gold for silver. Why do that? To make the most out of this next rally in silver and gold because silver will outperform silver. By how much? I reckon -- and I'm just a natural born fool from Tennessee, remember -- our target to swap back to gold will be around 28:1 this trip, so you'll roughly double your ounces by that swap. No guarantee, but that should work.
Don't necessarily expect silver & gold to rally with extreme speed, but you can buy here with confidence that their low have been posted & their eyes turned skyward.
When last we met on 18 May I warned that the bull trap in stocks had been triggered, and the past two weeks has proved that. Dollar has risen, but we expected that, although it probably peaked today.
Meanwhile the Euro-zone continues to crumble. Blast! I feel like a starving German shepherd turned loose in a pork chop shop. I don't know what to bite first.
Here goes: Right on time about the end of year's first half (as expected) bad unemployment news turned up to rack an already panicked stock market which had been floating on fumes, hopes, & Fed propaganda. New jobs in May grew by 69,000, lowest in year and far short of the 158,000 economists expected.
That took unemployment up for the first time in 11 months, to 8.2%. Adding woe to pain, the government revised March & April estimates down as well.
Meanwhile overseas the Euro zone is forcing another austerity treaty on the weaker members. Too little, too late. Bad unemployment data in the face of an upcoming election will send the Fed skittering to the money pumps to keep the ship from sinking. Markets insightfully grasped that inevitability today, sending silver & gold shooting up and shucking stocks like the French army throwing away backpacks on the retreat from Moscow. What y'all must not miss here is that stocks & metals parted ways, decoupled, disconnected, & diverged. Markets are screaming that they now expect more inflation, by the trainload.
While I was away the US DOLLAR INDEX continued to gain, but probably peaked today at 83.452. Ended the day 21.4 basis points lower (0.28%) at 82.892. Election coming, unemployment climbing, stocks plunging -- sounds like the perfect recipe for more Fed stimulating. Oh, they'll cover it up as something neutral, but it will be inflation, sure as warts on a toad.
After that little short-covering rally as I was leaving, the euro continued its destined march toward Zero. Today probably turned it around for a while, which the first half of a key reversal (new intraday low with higher than yesterday close). Gained 0.56% to $1.2430. Ultimate destination is somewhere below $1.2000, but that will take a while.
In the last two weeks the yen has crab-walked sideways, but three days ago began rising, stretching out its rally from mid-May's 118.93c low. Today gained 0.34% to 128.05c/Y100 (Y78.09/US$1). Yen has now nearly reached the bottom of that level where it fell through the trap door in mid-February. That should stop it. Stocks woke up this morning, stretched, then rolled over to get out of bed but to the wrong side: fell out of a second story window. Dow lost 274.88 (2.22%) to close 12,118.57. S&P500 tumbled 32.03 (2.47%) to end at 1,278.03. Where does that leave them?
S&P500 peaked at 1,292 in November, then rose in another upleg. That peaked at 1,422.38 in April, and has dropped off ever since, forming along the way a head & shoulders top. It broke down out of that formation about 1,370 before I left on vacation, slammed quickly all the way to 1,292, bounced like a fried egg falls off your plate and bounces off the floor, and today fell clean through that 1292 support, cut through its 200 day moving average (1,284.53) and closed BELOW the 200 DMA. Remember that the 200 DMA in bear markets, such as stocks are been in since 2000, forms the stiffest overhead resistance and a frequent rally target. (In uptrending or bull markets, the 200 DMA acts as support instead of resistance, and the target for corrections.)
Dow's trajectory has mirrored the S&P500's. That November peak came at 12,284, matched by a double peak in December at 12,257, so the support line was minutely descending. Dow rallied December through April 1, peaked, then made a slightly higher peak in May 1 at 13,338.66, which in fact was the top of a right shoulder. It broke down through the neckline just before I departed, and today smashed not only that 12,250 support, but also the 200 DMA (12,254) and kept on hurtling toward a final perch at 12,118.57.
Let's hear the end of this, short & sweet: Meeting the 200 DMA MIGHT send stocks on a little corrective rally. Slightly more likely but also sure to follow any rally is another 1,000 point plunge toward 11,230, the November low.
BEHOLD, again markets teach us a lesson: Wait. Be patient. What the chart implies the chart will fulfill, although it be delayed by time, chance, & government manipulation. The doom hanging over stocks has Ben Bernanke sweating bullets or nickels or whatever he sweats, & will panic him at last into more inflation. He knows no other, and can do no other. Watch & see.
Last thing I wrote to y'all was that silver & gold had troughed. I loathe folks who are always bragging "I told you so," so I will pass over that call in silence.
My wife & I with some dear friends did something we've never done before: we took a cruise. We sailed on the Coral Princess from Whittier, Alaska, near Anchorage to Vancouver, British Columbia.
In anchorage this time of year they have about 19-1/4 hours of daylight. The scenery was utterly breathtaking, mountains rising 3,000 to 12,000 above the fiords, with whales & seals & sea otters. Oh, and glaciers, but I have to admit watching them glaciers ain't all it's cracked up to be. They move slower than my children hoeing. Weather was a bit more problematical, but we did see the sun one day.
Cruise was fun, but I do not qualify as a sybarite. My tastes run more to cornbread & buttermilk, and my! they had every sort of fancy food you could ask for. Want two entrees? No problem! Three desserts? Yes, ma'am, right away! Arrived in Vancouver & rented a car to drive down to Bellingham, Washington where one of my sons lives. Took 52 minutes to get through yankee customs, and about 2 minutes coming back through Canadian customs. We drove into Washington state, where the state motto is "We drive slow in the left lane." Never mind, even in the unremitting rain there is hardly anything as beautiful as Washington in the spring: yellow scotch broom everywhere, gigantic rhododendrons, lilacs, & other blooming things unknown in Tennessee.
Every place has its own peculiar beauty, & it was a feast for our eyes and souls. Still, only one place is my place, & I think I'll savor the beauty of that for a while.
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.