Friday, August 31, 2012

Both the Silver and Gold Price Cleared their Downtrend Lines from 2011 Gold Up $31.10 Higher Prices Next Week

Gold Price Close Today : 1,684.60
Gold Price Close 24-Aug : 1,669.80
Change : 14.80 or 0.9%

Silver Price Close Today : 31.37
Silver Price Close 24-Aug : 30.61
Change : 0.764 or 2.5%

Gold Silver Ratio Today : 53.701
Gold Silver Ratio 24-Aug : 54.558
Change : -0.86 or -1.6%

Silver Gold Ratio : 0.01862
Silver Gold Ratio 24-Aug : 0.01833
Change : 0.00029 or 1.6%

Dow in Gold Dollars : $ 160.64
Dow in Gold Dollars 24-Aug : $ 162.89
Change : $ (2.25) or -1.4%

Dow in Gold Ounces : 7.771
Dow in Gold Ounces 24-Aug : 7.880
Change : -0.11 or -1.4%

Dow in Silver Ounces : 417.30
Dow in Silver Ounces 24-Aug : 429.91
Change : -12.61 or -2.9%

Dow Industrial : 13,090.84
Dow Industrial 24-Aug : 13,157.97
Change : -67.13 or -0.5%

S&P 500 : 1,406.58
S&P 500 24-Aug : 1,411.13
Change : -4.55 or -0.3%

US Dollar Index : 81.217
US Dollar Index 24-Aug : 81.563
Change : -0.346 or -0.4%

Platinum Price Close Today : 1,536.60
Platinum Price Close 24-Aug : 1,553.10
Change : -16.50 or -1.1%

Palladium Price Close Today : 627.95
Palladium Price Close 24-Aug : 651.55
Change : -23.60 or -3.6%

Today was one of the most exciting days I've ever experienced for the silver and GOLD PRICE, and one of the plainest.

I glanced at the screen early and the GOLD PRICE had dropped to $1,644. Uh, oh! I thought, that's the very bottom of that flag -- better catch soon or the fall will be shattering. Next I looked, after Bandit Ben fired the Blarney blast at 10:00, GOLD had shot up to $1,674. I looked at a five minute chart, and have never seen a chart that plain. Breakaway gap at $1,658, then another above at $1,674, then another later at $1,677. It closed at $1,684.60, up $31.10, and in the aftermarket has traded up to $1,692.50.

Y'all believe me now about that flag formation? Expect this rascal to run to $1,740 before it ever pauses to breathe.

If you can put up with the awful lows from the manic-depressive SILVER PRICE, you sure can have some fun when it gets high. Today silver acted just like gold, only more so. Didn't gap as much, but OH! It climbed straight up, 100.3c to end at 3137c and a new high for the move.

Did I mention that flag on the silver chart? Friends, silver plumb validated that today. Silver is targeting 3445c before this move ends.

Remember that silver's Great Hurdle in escaping a correction is to rise above the 300 DMA, now at 3253c.

I do not discount as impossible a rise clean to $1,740 and 3445c followed by a severe retracement, but seems far less likely now. Why? Because BOTH have cleared their downtrend lines from the 2011 highs. Look for a higher SILVER and GOLD PRICE next week.

Folks, the next big move has begun. Buy, just buy.

"Boom! Boom" went Bandit Ben's blarney cannon.
"Buy! Buy!" Sang every stock broker and yes-man.
Why should a central banker ever act
When blarney does all, with much more tact?

Clearly, the markets suffer from a massive overpopulation of bean-brains who believe that inflation helps economies. These people are so bedumbed that they would vote for Obama or Romney. Well, it's an ill bean-brain that bestows no good, and this one does, on silver and gold. In fact, exactly the persistence of this stupidity makes them profitable for us.

Ben's bloviation was, as expected, a collection of self-evident bromides. Apparently what got everybody's juices a-flow was this jawbreaker,

"Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability."

It jes' sings, don't it?

For you engineers, you'll note that he doesn't say a blessed word about what he actually intends to do. OF COURSE the Fed will "provide additional policy accommodation" [translation: "inflate more"] because that's what the Fed was created to do, inflate. Don't hydrophobic skunks bite?

But Bernanke's rule, like Lenin's, is "Tell 'em what they want to hear." Talk, and you don't have to act.

'Twas enough to suck the life out of the US dollar index. It lost 50.1 basis points or 0.64% to 81.217, back down to that last big low at 81.16 (June). One would expect -- we will see next week -- big follow-through to lower prices. 200 DMA stands near, at 80.60.

My suspicion is that Bernanke and his accomplice malefactors have decided to take the dollar lower to take heat off Europe. A lot lower. But even if they haven't, they certainly will take it lower by more inflating. You can bet BIG money on that outcome.

Euro poked its scabby head through $1.2600 resistance but couldn't clear the mark. Rose 0.60% to $1.2583. If that really is an upside down head and shoulders on the chart, it could rise to $1.3200.

Yen in fact did close above its downtrend resistance, up 0.47% at 127.77c (y76.27). Both the yen and euro show signs of climbing much higher.

Ben's blarney cannon saved stocks from the deep abyss they were leaning over. Dow shot up 90.13 (0.95%) to 13,090.84. S&P500 gained 0.51% (7.1) to close at 1,406.58. As Steve Saville of The Speculative Investor noted recently, stocks have nothing to do with economic performance anymore, they become a casino where you can bet on what policy makers might do.

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.