Monday, June 11, 2012

The Gold Price is in an Uptrend that will Sprint Toward $1,682 Once it Hits $1,618.13

Gold Price Close Today : 1595.50
Change : 5.40 or 0.34%

Silver Price Close Today : 2860.6
Change : 14.5 or 0.51%

Gold Silver Ratio Today : 55.775
Change : -0.094 or -0.17%

Silver Gold Ratio Today : 0.01793
Change : 0.000030 or 0.17%

Platinum Price Close Today : 1447.80
Change : 24.20 or 1.70%

Palladium Price Close Today : 623.80
Change : 13.15 or 2.15%

S&P 500 : 1,308.93
Change : -16.93 or -1.28%

Dow In GOLD$ : $160.80
Change : $ (2.39) or -1.46%

Dow in GOLD oz : 7.779
Change : -0.116 or -1.46%

Dow in SILVER oz : 433.87
Change : -7.23 or -1.64%

Dow Industrial : 12,411.23
Change : -142.97 or -1.14%

US Dollar Index : 82.69
Change : 0.183 or 0.22%

Thursday was not kind to the
GOLD PRICE. It stepped over that $1,615 line right into an open manhole, and never stopped until it hit pavement at $1,555. Y'all interpret this as pleases you, but I say it was the Nice Government Men anticipating the trouble in Europe with a pre-emptory gold slam.

Makes no difference, all their manipulating don't amount to spit in the wind or on the sidewalk. GOLD PRICE brushed itself off and marched right back, gaining $3.50 on Friday and $5.40 today to close at $1,595.50.

Gold's longer term chart looks as bogus as a $4.00 bill with a picture of Moe, Larry, and Curly. It shows huge swings back and forth, which, while conceivably possible someplace in the universe, simply doesn't fit against that May bottom and strong reversal rally on June 5.

So look at the aftermath. GOLD "was driven" (passive voice obscures the actor) down to $1,556.50 but this series of rising bottoms -- $1,526.70, $1,532.10, $1,556.40 -- constitute what? AN UPTREND. Manipulation failed.

Now gold is wrestling (or "rasslin'" as we say in Tennessee) with its 50 day moving average ($1,618.13). Once it pierces that mark again, it will yet once more sprint toward $1,682 resistance.

Take a deep breath, y'all. Gold is okay. Nothing but your paper money is in danger.

I'm fixing to tell y'all something else about silver that nobody else has grasped yet, but first the technicals.

The SILVER PRICE chart has the same sort of upside-down head and shoulders look to it that gold's chart shows. Low Friday came about 2790c and silver has been working its way higher ever since. Today it rose 14.5c to end at 2860.6 cents. Low came at 2825c, high reached 2894c, so 2900c presents the first barrier to be smashed.

SILVER closed today above its 20 DMA (2822c). Silver, too, has left in its wake a series of higher lows, but now needs to concentrate on climbing through 2900c and through its 50 DMA at 2994c.

That's coming. Count on it.

Bottom line says that for all the panic last week, the euro remains under deep suspicion, like a chicken-eating hound with feathers on his muzzle. Dollar ain't in much better shape, just sporting fewer warts and sores at the moment. Silver and gold survived the test and confirmed the strength and tenacity of their recent bottoms.

Mercy! What more do y'all want? A government guarantee?

On 11 June 1859 the Comstock Lode, one of the world's richest silver finds, was discovered in Virginia City, Nevada. What most folks don't know, and has given me abundant opportunity to correct them on, is that half of the value of the metal coming out of the Comstock came from gold. So the silly myth that so called silver experts propagate, that the huge new supply of silver coming from the Comstock Lode forced the world off the silver standard, ranks with believing that during a solar eclipse the sky dragon is gobbling up the sun. Silver was demonetized by bankers, for their own purposes. English bankers, some say, who bought the passage of the Crime of '73 (silver's demonetization in the coin bill) for half a million in gold. Congress was a lot cheaper in those days.

Here's my silver secret. Most every silver dealer believes that lying around somewhere out there exists an endless supply of US 90% silver coin. Hogwash. Coin has been melted since the late 1960s, and the supply is NOT infinite. Yet because it is more profitable for dealers to sell the silver American Eagles and similar coins, they sneer at 90%. However, we have watched in the last month as the more 90% we tried to buy, the higher the premium climbed, from about negative 85 cents to about melt today (buy side wholesale premium). Some wholesalers have temporarily stopped selling 90%, because they're afraid they can't cover it.

Y'all watch. One day not too far away, 90% silver coin will begin carrying a premium as folks discover that the coin they spurned is in short supply.

But what do I know? I'm just a natural born fool from Tennessee and don't even look up to congress.

Y'all think now, before you moan and whine about silver and gold: Spain's toe is caught in the wringer so tight that the EU had to bail out their banks to the tune of $125 billion, bringing the grand bank bailout total to $600 billion, counting Ireland, Portugal and Greece. They call it a fix, I call it putting spider webs on a squirting artery. Markets were not fooled, as European stocks buckled today and Spanish bond yields rose (folks are afraid the government will end up holding the banks' bag, so they want more interest.)

Now think: if you were the scurvy lot called the central bank heads, what would you do when your banking system was flying apart? You'd get in that market and sell the SNOT out of silver to drive down gold, and you'd do the same for gold. If you didn't, your masters would carry you out behind the Fed building and shoot you. That's the world you live in, where the central bank musketeers are all for one, and one for all, and the people suck hind teat.

Every one of these bailouts simply re-inforces and proves my iron presupposition: they have no weapon but inflation and therefore they will inflate. Otherwise, they die, and as Stalin said, "Ruling classes never leave the stage of history voluntarily." They cling to power, even if it devastates all the world.

In spite of all the hootin' and hollerin' Thursday and Friday, charts haven't changed much. Euro looks sick as a cat eating grass and the yen has topped if it breaks 124. Today the Euro lost 0.33% to $1.2475 while the yen flatlined, up 0.6% at 125.95c/Y100 (Y79.40/US$1).

Meanwhile the US dollar index hath not polished its image. Yes, today it rose 18.3 basis points (0.24%) to 82.694, but that's a long stretch from the June 1 high at 83.45. Just like that whiff of Ripple off a wine-o's breath, it can't be mistaken for anything but what it is, a downtrend. Would have to rally above 83.54 to gainsay that.

Y'all don't want to hear about stocks if you own any, because today was one of the few cases on record of a corpse nailing shut its own coffin. Dow and S&P both paint the same five day chart, with a rally beginning Wednesday (from about 12,150 on the Dow) and climbing on Thursday, dropping but maintaining on Friday, peaking very early today with a move into new high territory, then collapsing.

What I have described can be viewed from two angles. First, the Wednesday - today action has created a head and shoulders top with the neckline at Dow 12,400 (S&P about 1,308). Dow closed at 12,411.23, down 142.97 (1.14%) in lock step with the S&P500 at 1,308.93, down 16.93 or 1.26%.

If that is a head and shoulders, stocks will rally once more to 12,550 before they fall again, this time piercing the neckline and falling like the stars over Alabama.

Yet another observation must be addressed. A move to a new high intraday with a lower close for the day is the portentous first half of a Key Reversal. A lower close tomorrow makes all that HandS stuff immaterial and sends stocks back to the cellar, digging a tunnel to the center of the earth.

If you still own stocks, you're getting a last warning to sell them and put the proceeds into silver and gold.

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.