Friday, June 29, 2012

The Gold Price Rallied Through Two Resistance Levels with Plenty of Room to Move Higher

Gold Price Close Today : 1,603.50
Gold Price Close 22-Jun : 1,571.20
Change : 32.30 or 2.1%

Silver Price Close Today : 2758
Silver Price Close 22-Jun : 2682
Change : 76.00 or 2.8%

Gold Silver Ratio Today : 58.140
Gold Silver Ratio 22-Jun : 58.583
Change : -0.44 or -0.8%

Silver Gold Ratio : 0.01720
Silver Gold Ratio 22-Jun : 0.01707
Change : 0.00013 or 0.8%

Dow in Gold Dollars : $ 166.05
Dow in Gold Dollars 22-Jun : $ 166.39
Change : $ (0.34) or -0.2%

Dow in Gold Ounces : 8.032
Dow in Gold Ounces 22-Jun : 8.049
Change : -0.02 or -0.2%

Dow in Silver Ounces : 467.01
Dow in Silver Ounces 22-Jun : 471.54
Change : -4.53 or -1.0%

Dow Industrial : 12,880.09
Dow Industrial 22-Jun : 12,646.78
Change : 233.31 or 1.8%

S&P 500 : 1,362.16
S&P 500 22-Jun : 1,335.02
Change : 27.14 or 2.0%

US Dollar Index : 81.627
US Dollar Index 22-Jun : 82.256
Change : -0.629 or -0.8%

Platinum Price Close Today : 1,449.10
Platinum Price Close 22-Jun : 1,427.45
Change : 21.65 or 1.5%

Palladium Price Close Today : 583.05
Palladium Price Close 22-Jun : 610.50
Change : -27.45 or -4.5%

Last Friday I wrote,

" Long and short is this: If the
GOLD PRICE doesn't hold $1,525 and silver 2615c, they will drop much further, as low as $1,450 and 2250c."

Yesterday's GOLD PRICE low came at $1,547 and silver's at 2612c. Today gold closed up $53.80 [sic] at $1,603.50 and silver at 2758c, up 133.3c. Those were huge moves, but don't miss this: they took gold through two resistance levels and silver over 2750c.

This merely takes GOLD to the middle of its Bollinger bands, so there's plenty of room to run to the upper boundary at $1,645.01. Gold also closed above its 50 dma ($1,602.51), and within an easy sprint of the 200 DMA $1,666.78. RSI turned up, along with MACD.

Today's rally was real, as real as an apple pie hitting you in the face. And it will slow down, but that confirms and proves the preceding lows as much as you could ask.

But never forget that markets have to keep on confirming themselves. Gold might fall back to $1,590, but shouldn't close there. It must keep on advancing, say, next week through $1,625.

The SILVER PRICE close above 2750c resistance is today's most welcome news. It nearly reached its 20 DMA (2803c), and other indicators have turned up. Has plenty of room to run on the upside without becoming overbought (like stocks, for instance).

Much as I can tell, that's it for the declines. The SILVER and GOLD PRICE may not run away upside from here, may spend time grinding slowly higher, but that should put the end to these "bottom gonna drop out" scares.

Whole world's crazy as a Betsy bug. The euro, stocks, silver and gold exploded upward today on news that the Europeans are going to bail out their banks DIRECTLY (think the US TARP bailout) rather than giving the money to sovereign governments so they could pay it to the banks. Only trouble is, nobody knows where the money will come from. Let's see, Spain is going to contribute to the fund to bail out Spanish banks? This is financial perpetual motion at its delusional best. Oh, and the greater centralization is there, too, with some euro banking control agency. Well, it's a party today but when the liquor runs out and the headaches and puking begin, they'll stop celebrating . That should come next week some time.

Here's why I don't believe this latest fix -- I've lost count how many "at last" fixes there have been for Europe -- can possibly work. It is a complicated mathematical answer, but bear with me and pull out your calculus manuals: there is not enough money in Europe to bail out the banks. Shoot, there ain't enough money in the world to bail out European governments and banks. But y'all believe what you want. I ain't nothing but a nacheral born fool from Tennessee anyway, so ignerant and unsophistercated I still believe the addition and subtraction tables. So what will they do? They will inflate, like I've been telling y'all so long, and they will send silver and gold rocketing into Outer Space.

STOCKS investors believe that inflation will be good for stocks. They may also believe in fairy dust and Tinkerbelle, for all I know, but they'll sure enough find out. Dow rose 277.38 (2.2%) to 12,880.09. S&P 500 rose a little more, 2.5% (33.12) to 1,362.16.

Technically, the S&P500 could -- and nearly has -- rallied to the HandS neckline it fractured in May, about $1,375. Today took it above the 50 DMA (1,340.21). Shoot, if enough of them pointy-toe-shoe Wall Streeters get hyped up on White Powder, they may take it to 1,400. Outcome will still be tragic, taking millions of unsuspecting Main Streeters to the cleaners later this summer. Dow is in a similar fix, and today slung it nearly to the top Bollinger Band (12,967.24). Don't get no better than that.

If I had to say, Old Ben the Bandit wanted to give the markets a goose for his European accomplices in global crime, so he slapped the dollar, knowing that HUGE short position in the euro was ready to be panicked, driving up the euro. Also, that move would give the latest European "fix" more believability in the gullible's eyes.

Dollar index sank like a lump in a churn today. Overnight it broke 82.60 then plunged straight -- I mean "straight like dropping a stiff corpse over a high cliff" -- bounced once, then plunged to its low (81.43) about 9:00, with ne'er a friend to help. That hurteth the weekly chart not a bit, but the shorter term looks right sick. Last low, and coincidentally the 50 DMA (81.21), was 81.16. If the dollar passes that mark it confirms a downtrend and nixes a rally.

Y'all, this ain't nacheral. US Dollar Index lost 107.1 basis points (1.38%), a Seven League Boots move. Yen lost, too, 0.43% to 125.32/Y100 (Y79.8/US$1). Euro was the big gainer, up 1.83% at $1.2665. That takes it up through 1.2624 resistance, but overhead about 1.2725 loometh the downtrend line. Will most likely rally a while, just to work off that Brobdingnagian short position, but still ain't worth no more than a toupee hairpiece in a tornado.

Just a couple of reminders, friends. Less than $1,000 per head of currency circulates in the USA. Best way to avoid a bar fight is to leave the bar before it breaks out., Same thing holds for bank runs: leave the bank -- take out money -- before it starts. Better get used to keeping your excess funds in gold coin you hold, rather than bank accounts held by thieves, fools, and knaves.

On the Supreme Court's puerile approval of forced medical insurance in Obamacare, here's a axiom for y'all to digest. Whenever government messes in a market, three things inevitably happen, no exceptions:

1. It reduces quantity (availability)

2. It lowers quality

3. It raises price.

I spent all day with my wife Susan in Nashville at Vanderbilt Clinic. She's going to have to have a mitral valve replacement and tricuspid valve repair on 3 July 2012. I humbly ask for you to pray that she would have a successful surgery, that all those who help her would have wisdom, skill, insight, and alertness, and that she might have a speedy recovery. Pray also that I would take it all with hope, calmly, patiently, and with good grace. Hard to watch somebody you have loved for 45 years in pain.

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.