Monday, June 25, 2012

The Gold Price Needs to Climb Above $1,630 and then Above $1,656.50

Gold Price Close Today : 1587.50
Change : 21.50 or 1.37%

Silver Price Close Today : 2752.0
Change : 85.9 or 3.22%

Gold Silver Ratio Today : 57.685
Change : -1.052 or -1.79%

Silver Gold Ratio Today : 0.01734
Change : 0.000311 or 1.82%

Platinum Price Close Today : 1439.40
Change : -28.20 or -1.92%

Palladium Price Close Today : 606.20
Change : -10.95 or -1.77%

S&P 500 : 1,313.72
Change : -21.30 or -1.60%

Dow In GOLD$ : $162.80
Change : $ (4.04) or -2.42%

Dow in GOLD oz : 7.876
Change : -0.196 or -2.42%

Dow in SILVER oz : 454.31
Change : -19.82 or -4.18%

Dow Industrial : 12,502.66
Change : -138.12 or -1.09%

US Dollar Index : 82.49
Change : 0.234 or 0.28%

Today's silver and
GOLD PRICE market can be likened to September, October, November, and December 2008. Silver and gold plunged and plunged every day. In late October silver hit 880 cents, then rallied, then fell back to 879 cents on 13 November. Gold bottomed the same day, having lost 30% of its peak value. Silver lost 105% of the preceding gain. Looked like the end --- to those who grasped not that it was a BULL market. Silver and gold crept up into December, enough to begin confirming they were past danger.

The SILVER PRICE and GOLD PRICE have both tested the base of that declining triangle, gold 5 times, silver 4 times. More times support is tested, greater waxeth the likelihood it will break. If that support is pierced, silver plunges toward 2250c and gold toward $1,475, maybe $1,435. That's the REALITY.

Feels like December, 2008 to me, but then, it might be late October 2008, too. I have no crystal ball, but I believe the fight at support will be won or lost this week. Personally, I loaded up on Friday, but then, I'm a "plunger." My wife says you have to bet big to win big. Of course, some times you lose big, too.

Where are other witnesses or confirmations to watch for? The SILVER PRICE RSI did not make a new low when the price did -- bullish non-confirmation. Silver today gained 85.9 cents (3.22%)to close Comex at 2752c while gold gained $21.50 (1.37%) to end at $1,587.50, just below $1,590 resistance. Silver is knocking on 2750c resistance, just barely into it. GOLD/SILVER RATIO fell nearly fell nearly a full point, from 58.583 to 57.685. All those whisper -- whisper, they don't shout -- metals turned today.

Confirming a bottom silver needs to close above 2800c, then move rapidly above 2850c. Within a week or so after that, it ought to move through 2900c. Whether this marches rapidly or slowly grinds makes no difference, only that it steadily advances.

For the GOLD PRICE to confirm a bottom it needs to climb up and out of its present even-sided triangle (from a line connecting the lows from May through last week, and the highs from 1 May through 18 June). That requires a close above $1,630, with no telling fall-back. Fairly rapidly, afterwards, gold needs to climb above its 150 DMA (now 1,656.50).

It's a bull market. Most of the time, bull markets resolve to the upside. That's what makes them bull markets.

What will gainsay my upward outlook? Any gold close below $1,558 casts everything in doubt, a close below $1,532 shatters it. Silver must not close below 2641c, period.

There y'all go. Don't bother writing me asking for your money back. I never claimed to have a crystal ball, and I sure can't read the future. I'm just a "chart-whisperer."

Well, blast it all! I've gone MAINSTREAM! I'm so ashamed, and not a little suspicious.

My friend Catherine Fitts sent me this link to a CNBC Kudlow Report broadcast, Here are not one but FOUR talking heads saying that we are all "slaves" to the central banks and that the stock market isn't driven by the economy but by central bank manipulation.

What are they up to, talking sense? Don't make no sense, coming from them.

They've shamelessly STOLEN the arguments I've been making for over 30 years. They must be desperate for ratings, stealing from a natural born fool from Tennessee.

Well, even a blind hog finds an acorn now and then. I wish 'em well, but even though they said nice things about gold -- think about THAT! -- they're only about 1/100th of the way there. Still think you can make money in stocks by outguessing the Fed. Haven't a clue silver exists in the same cosmos with themselves. Prob'ly wear them shiny, pointy Eyetalian shoes.

I wish 'em well, but they have no solution. Only workable solution is to build a real economy using real money right alongside the rotten one, so that when the rotten one falls, we'll still be chugging away, helping our neighbors and ourselves re-build.

Meanwhile in Argentina nervous savers withdrew US$522 million (in US paper dollars) last week. Seems they recall the last time government cheated them out of their savings in 2002 (never mind all the other times). To show you how desperately rotten the Argentine paper money is, next to it US dollars actually look good. Wonder why they don't just buy gold coins? Makes no sense, but maybe habit is hard to break.

All those talking heads have their work cut out for 'em this evenin', since both the US dollar AND gold rose, while stocks fell, all of which, according to the conventional guru-wisdom, ain't possible.

US dollar index rose 23.4 basis points (0.3%) to 82.49. Dollar was stymied by 82.60, but closed above its 20 day moving average (82.31), first sign of an upward turn. Looks now as if the whole move from 1 June's 83.54 high to 18 June's 81.16 amounted to nothing more than a 50% correction of the foregoing 1 May to 1 June rally.

In other words, the US dollar points higher. Considering the plights of the other bankrupt currencies and their bankrupt economies, that's no surprise. Dollar's ugly, sure, but has slightly fewer warts than the yen and euro.

After gapping down below its 50 DMA on Wednesday last, today the yen gapped up above its 50 DMA. You don't buy things like that. Market proverb says, "Gaps are always filled." That's all this amounts to, not a change of direction. Closed 125.53c/Y100 (Y79.66/US$1). Will drop further.

More I think about that sorry euro, that gapped down today, more I wonder if it won't drag the rest of the world down with it. Closed today at 1.2504, down 0.54%. 'Fore long, it'll hit 1.2000 unless the alchemists at the ECB learn how to transmute metals first.

Come now, ye prattlers! Where now is your "risk-on/risk-off" trading? Pray declare how the risk-off dollar rose while risk-on stocks fell and risk-on silver and gold rose?

Oh, y'all are so glad that you didn't own stocks today! Dow fell 138.12 points (1.09%) to 12,502.66. S&P500 hurt worse, losing 1.6% (21.3) to 1,313.72. Dow in gold dollars fell 1.94% to G$163.10 (7.89 oz), having left behind a blunt and unequivocal double top, child of confusion that has now found its way: down.

Looking back on the S&P's trajectory since it fell through the Head and Shoulders' neckline in early may, we mark that all the action in June was no more than a counter trend rally stopped cold at the 50 DMA -- didn't even reach back up to the neckline. Descent speeds up once it falls through 1,270 again.

Been thinking all weekend about those silver and gold charts: declining triangle adorns both. A declining triangle (falling to the right) generally breaks out to the downside, and potential for that is plentiful. However, against what backdrop playeth out this triangle? LO, against a BULL market.

Remember stocks from 1996 - 2000? Repeatedly formed BEARISH rising wedges, and against usual expectation broke out Upside time and again. Why? It was a BULL market, silly.

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.