Tuesday, June 19, 2012

The Gold Price has Remained Above it's 20 and 50 Day Moving Average Could Skid Either Way

Gold Price Close Today : 1622.20
Change : -3.50 or -0.22%

Silver Price Close Today : 2836.20
Change : -30.3 or -1.06%

Gold Silver Ratio Today : 57.196
Change : 0.482 or 0.85%

Silver Gold Ratio Today : 0.01748
Change : -0.000149 or -0.84%

Platinum Price Close Today : 1479.00
Change : -3.60 or -0.24%

Palladium Price Close Today : 628.25
Change : -3.60 or -0.57%

S&P 500 : 1,357.98
Change : 13.20 or 0.98%

Dow In GOLD$ : $163.59
Change : $ 1.58 or 0.98%

Dow in GOLD oz : 7.914
Change : 0.077 or 0.98%

Dow in SILVER oz : 452.62
Change : 8.12 or 1.83%

Dow Industrial : 12,837.33
Change : 95.51 or 0.75%

US Dollar Index : 81.39
Change : -0.458 or -0.56%

I'm antsy and uncomfortable that the silver and
GOLD PRICE have floated in the same range for so long. Gold today lost $3.50 to close Comex at $1,622.20.

For five days the GOLD PRICE has remained between $1,608 and $1,635.40. Optimistically gold remains above its 20 (1596.86) and 50 (1614.90) day moving averages.

Why do I care? Markets do not like stasis, that steady state where nothing is changing. Static markets are easily to manipulate because they are delicately balanced, OR, they are a stand-off between evenly matched buyers and sellers, waiting for an explosion when one side or the other weakens. This doesn't feel like that fight of opposing forces -- too slow, too dull.

So watch out. Gold is banging away at $1,633 resistance, but supported at $1,615 - $1,608. Breaching either boundary will send gold skidding a long way, fast.

I'm not changing my opinion that gold's correction from last September has bottomed. However, you might see a short, sharp move here either way.

For the last seven days the SILVER PRICE has been bound between 2820 and 2900. Today it ranged 63 cents between 3893c and 2830c. Today silver lost 30.3c to close at 2836.2c -- yawn. It fell barely below its 20 DMA (2841c).

Boundaries for silver are 2800c and 2900c. Up above the 50 DMA awaits at 2953c, the 200 at 3215c.

Face it: this is the seasonal doldrums for the SILVER and GOLD PRICE. Usually they remain quiet across June and July, and only begin lacing up their running shoes in August for the September races.

All eyes are on the Fed Open Market Committee meeting tomorrow, when the committee will explain in un-parsable bureaucratese how they plan to jimmy the economy next. This spectacle is too painful, too repulsive for a fastidious and rational mind, the triumph of pygmies over giants, of envy and stupidity over honest and integrity.

Ain't central banking great?

Clearly the hopeless optimists in the stock markets expect great news -- by that they mean "more inflation" -- out of the FOMC, as stocks are blowin' and goin'. Dow levitated 95.51 (0.75%) today to perch on a cloud at 12,837.33. S&P500 floated up 13.2 (1.8%) to 1,357.98.

Looking at the more active and minutely more believable S&P500 (no stock index can be believed since the creation of the Plunge Protection Team in 1987 -- government manipulates every market) we find that the recent foray BELOW the neckline of the Head and Shoulders top formed February - May in fact traced out an upside down head and shoulders that targets a rally to 1,405. Interesting (to some people) is the shape of the S&P500's decline from its April high, plainly an impulsive five wave decline. That implies that the market's natural direction is down.

You! There! Put down that telephone! Resist at all costs the temptation to call your stockbroker, unless you are calling to SELL all your stocks and shift the proceeds into silver and gold.

That US dollar Index today lost more than it had gained yesterday. Vomited back 45.8 basis points (0.59%) to 81.386. Today's low market a double bottom with the weekend low, so the dollar index might stop there (81.20). Should it break that 81.20 support, then brace for a quick plunge to 80.74.

Euro profited from the dollar's fainting spell today. Rose 0.87% to $1.2687. Why do I care? I don't know. Dealing with fiat currencies to me is like having to sort dung beetles. No, that's not quite accurate. Dung beetles are actually a noble and worthy cog in nature's recycling machinery, while fiat currencies are in need of recycling themselves. Anyway, the Euro today managed to break through resistance left from the January low at 1.2624. Also, it has remained above its 20 day moving average (first sign of turning up) for five whole days. Euro might reach 1.2800 before its needle hits "Empty."

Yen rose 0.23%, but isn't really going anywhere. Touched its 200 dma (127.14) two days ago, and fell back chastened. No opinion here. Closed today at 126.70c/Y100 (Y78.93/US$1).

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.