Thursday, July 19, 2012

The Silver and Gold Price are Holding Their Own Fundamentals Unchanged Prices Sure to Rise

Gold Price Close Today : 1580.10
Change : 9.70 or 0.62%

Silver Price Close Today : 2719.4
Change : 12.3 or 0.45%

Gold Silver Ratio Today : 58.105
Change : 0.094 or 0.16%

Silver Gold Ratio Today : 0.01721
Change : -0.000028 or -0.16%

Platinum Price Close Today : 1420.70
Change : 3.50 or 0.25%

Palladium Price Close Today : 583.60
Change : 5.55 or 0.96%

S&P 500 : 1,376.51
Change : 3.73 or 0.27%

Dow In GOLD$ : $169.33
Change : $ (0.57) or -0.34%

Dow in GOLD oz : 8.191
Change : -0.028 or -0.34%

Dow in SILVER oz : 475.96
Change : -0.88 or -0.18%

Dow Industrial : 12,943.36
Change : 34.68 or 0.27%

US Dollar Index : 82.89
Change : -0.110 or -0.13%

The GOLD PRICE augmented (that's for you engineers) by $9.70 to close at $1,580.10. Silver added 12.3 cents to close Comex at 2719.4c.

Oh, it's tough grinding through these vibrations! GOLD PRICE 5 day chart shows a rounded bottom yesterday with a surge today to $1,591.50, and of course the Invisible Hand was up early this morning, right at the open, but when gold shrugged that slapping off, the Hand showed up again about 1:00 to make sure gold didn't reveal the game by closing a lot higher, driving it down to $1,576.20 right before the close. Yeah, sure.

The SILVER PRICE chart moves across five days in a range from 2680c to 2760c, and it reached that high again today at the open but -- What a surprise! -- came the invisible hand to slap it down. Doesn't matter a pile of beans, the SILVER and GOLD PRICE are both holding their own, biding their time. Just wait patiently, holding your cards, till silver and gold start slapping those Nice Government Men back.

Whenever we have to trudge and wallow through long corrections fatigue eventually dulls us. We have a long term strategy, it is working, it has thrilled us with new, un-heard of highs, but then it corrects, as anyone could foretell, and we descend into despair and self-doubt. Awww, cut it out! No fundamental has changed. All those factors sure to drive silver and gold up -- more inflation from government and central banks -- continues unabated. Unabated?! Mercy, they've had SIX YEARS to clean up their act, and they only piled the mistakes, inflations, and bailouts higher and deeper. The never learn, they never help, they never apologize. Governments, central banks, banks, and Wall Street face the same imperative: INFLATE OR DIE.

They will inflate, even if all the rest of us die.

I have to share a lesson with y'all that I learned in 1980, and it cost me about $100,000 -- and those were 1980 dollars. Here 'tis: "Every rise in a market doesn't necessarily show strength." This becomes diabolically deceptive when you are long a market past the time you should have exited, and want your opinion confirmed. Best way to get anybody to believe a lie is, as Lenin told his secret police chief Felix Dzerzhinsky when he asked how he would get people to believe in the phony opposition he was creating, is to "Tell them what they want to hear."

We lie to ourselves the same way, picking and choosing the facts that agree with us, and pitching out those bothersome facts that gainsay our bent. It's a VERY expensive habit.

Strength in markets does not necessarily reveal true underlying strength, anymore than strength in a fever victim fighting off nurses reveals his healthful state.

So I watched today with interest as stocks rose, the Dow by 34.68 (0.27%) and the S&P500 by 3.37 (0.27%). My, O, my, they are a-blowin' and a-goin, except that they ain't. Both have merely rallied to the neckline of a topping head and shoulders formation, a neckline they punctured in May. This "strength" is merely a market touching back to the breakdown line, a typical "final kiss good-bye." Worse, both have formed deadly rising wedges, promising much lower prices.

But, shucks! What do I know? I'm just a natural born ridge-running fool and I ain't even been wearing shoes but a year and a half, let alone even seed a pair of them pointy-toed Eyetalian shoes them Wall Street fellers wear. How could I know Sic 'em from Come Here?

Let that alone and let's look at currencies. Hey! Don't make that face! I don't want to do it either, but I have to.,

US dollar index eroded today, down 11 measly basis points to 82.89, not much above the 82.734 low and down only 0.14%. This strikes me as the same Invisible Hand of the Nice Government Men we always see. In any other market, breaking crucial support would knock it a long ways lower, but not the dollar index -- only so low and no lower. Well, let drop my conspiratorialism -- well founded as it is in history and government policy -- and look at the chart. 20 day moving average lurketh at 82.78, and a break through that SHOULD take the dollar lower. Uptrend line today strikes about 81.70, but the loud confirmation of the dollar's earthward intention would come with a close below the last low, 81.52. Trend remains up until that happens.

Yen gapped up today and gained 0.27% to 128.77c (Y77.66/US$1). It's almost touching the downtrend line overhead, and last high came at 128.77. I mention that because it must exceed that last high in order to confirm even the SUSPICION of an uptrend. Other indicators favor higher yen.

Not joining in the general jubilation today was the euro, closing unchanged at 122.79. Slight chance the MACD might be turning up. Slight. Expect to see 1.2000 or 1.1800 before you see that.

GOOD THINGS GOING ON HERE: Sometime in September, at last, I hope to publish volume one of AT HOME IN DOGWOOD MUDHOLE, the tale of my family's move to the farm. I have to admit, it makes me laugh and cry. I hope it does the same for y'all.

Another thing: Labor Day Saturday we always throw a big party here at the farm, our Bodacious Hoedown. It includes games and an Old Time band, dance caller, and big dinner with all trimmings, featuring our mean grown here on the farm. Details on that tomorrow.

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.