Monday, July 09, 2012

The Gold Price Coiling Up for a Big Move but Which Way Will it Break?

Gold Price Close Today : 1588.60
Change : 10.30 or 0.65%

Silver Price Close Today : 2741.0
Change : 52.2 or 1.94%

Gold Silver Ratio Today : 57.957
Change : -0.742 or -1.26%

Silver Gold Ratio Today : 0.01725
Change : 0.000218 or 1.28%

Platinum Price Close Today : 1443.20
Change : -23.40 or -1.60%

Palladium Price Close Today : 582.60
Change : -15.35 or -2.57%

S&P 500 : 1,352.46
Change : -2.22 or -0.16%

Dow In GOLD$ : $165.73
Change : $ (1.54) or -0.92%

Dow in GOLD oz : 8.017
Change : -0.074 or -0.92%

Dow in SILVER oz : 464.66
Change : -10.37 or -2.18%

Dow Industrial : 12,736.29
Change : -36.18 or -0.28%

US Dollar Index : 83.12
Change : -0.256 or -0.31%

Today the GOLD PRICE gained $10.20 to close at $1,588.60.

I'm just a natural born fool from Tennessee and I don't know nothin' at all, but I can still look at that gold chart and see the Invisible Hand just a-working away. What do you say when a market spikes up, then in 15 minutes or so is slammed down below resistance? Every day. It's just not a pattern one sees often in nature, but then, I am notoriously suspicious, I confess.

Never mind, I'd like to point y'all's attention to the longer term gold chart, where the GOLD PRICE has scratched out an even-sided triangle, harbinger of a big break but silent as to which way. From the May $1,526.70 intraday low through the end-June $1,547.60 low draw your bottom boundary. From the June highs at $1,642.40 and $1,635.40 to July's $1,625.70 draw your upper boundary. You'll see that Friday's low didn't even come close to that bottom boundary, then about $1,550.

As long as the GOLD PRICE remains in that triangle it is merely coiling up for a big move, and since this is a bull market, that will most likely be a move up. Meanwhile, as exciting as all the up and down may be, it doesn't say anything really until gold breaks above that upper boundary or below the lower.

The SILVER PRICE has formed a similar but not identical triangle. Inside a large declining triangle silver formed a downward-pointing or falling wedge. Normally these resolve with an upside breakout. Lower boundary today is about 2600c, upper boundary is about 2800c.

SILVER today gained 52.2c to close 2741.1c. This came in a very tight range between 2704c and 2749c.

A reader rebuked me for crediting my wife's speedy recovery to the grace of God and the prayers of his people. Ahh, I should also have mentioned by name her surgeon, Dr. Michael Petracek, who also was a means of God's grace to Susan. Sorry I didn't make myself clear.

Speaking of God's grace, on 9 July 1991, twenty-one years ago today, my wife Susan and I along with 14 others were acquitted in Federal court on charges of conspiracy and willful failure to file income tax returns. Y'all can read about it at

The Tennessee mouse was away, but the RATS kept on playing overtime -- gummit rats, that is.

Let's start with what is most painful to the truthful and fastidious mind, the filthy, low white-trash scrofulous US dollar index. It rallied last week and has reached the ceiling, defined as the last (1 June) high at 83.54. Friday it hit 83.40, but today those high numbers hit it like Kryptonite hits Superman. Fell off 25.6 basis points (0.33%), but let's face it: the dollar's trend (nasty and untouchable as it is) points up. It must, however, break through that 83.54 to continue. Odds are stacked higher against that, because the dollar hasn't seen prices higher than that since, oh, June 2010.

More than technicals stacked against it are the needs of those needy central bankers, who like everything to stay on an even keel. Rather than an even keel, the euro is sinking out of sight against the dollar and the yen. This cannot please The Mighty Charged With Managing The World. I doubt that criminal Bernanke wants to see the euro plunge deeper, let alone that criminal in charge of the ECB, Draghi. And what the Nice Government Men want, they generally manipulate to get.

The euro's chart grows weaker daily. Now there's a chance that Friday's intraday low at $1.2260 makes a double bottom with 1 June's $1.2288. It was the lowest euro price since July 2010.

It's amusing in sort of a wry, "The Whole Universe is Looney" way that the yen remains buoyant. It is, after all, the worst of the three big currencies, by a couple of parsecs. But who ever said fiat currency values were based on anything but government moonbeams anyway? Yen closed today up 0.1%at 125.68c/Y100 (Y79.6/US$1). Yen's 50 day moving average stands at 125.71, 20 DMA at 125.7, with the 20 headed down. Other indicators are neutral. Technically the trend is down.

Stocks took a beating last week. On Tuesday, stocks' only gainful day, the Dow closed at 12,943.66, but in punishment was whipped and beaten the rest of the week, closing today 200 points lower at 12,740.87 (down 31.6 or 0.25% for the day). S&P500 followed right along, closing today down 2.22 at 1,352.77. RSI has turned down and the MACD is rolling over, not signs to cheer a stock investor's heart.

Later in the summer some very painful times are coming for stock owners.

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.