Saturday, August 18, 2012

The Gold Price Gained 20 cents to Close at $1,616.30 Silver Lost 21 cents

Gold Price Close Today : 1,616.30
Gold Price Close 10-Aug : 1,619.70
Change : -3.40 or -0.2%

Silver Price Close Today : 2,799.50
Silver Price Close  10-Aug : 2,806.20
Change : -6.70 or -0.2%

Gold Silver Ratio Today :57.735
Gold Silver Ratio   10-Aug : 57.719
Change : 0.020 or 0.0%

Silver Gold Ratio : 0.0173
Silver Gold Ratio 10-Aug : 0.0173
Change : -0.0000 or -0.0%

Dow in Gold Dollars : $ 169.78
Dow in Gold Dollars  10-Aug : $ 168.57
Change : $1.21 or 0.7%

Dow in Gold Ounces : 8.21
Dow in Gold Ounces  10-Aug : 8.155
Change : 0.06 or 0.7%

Dow in Silver Ounces : 474.20
Dow in Silver Ounces  10-Aug : 470.67
Change : 3.53 or 0.7%

Dow Industrial : 13,207.95
Dow Industrial  10-Aug : 13,207.95
Change : 67.25 or 0.5%

S&P 500 : 1,418.16
S&P 500  10-Aug : 1,405.87
Change : 12.29 or 0.9%

US Dollar Index : 82.61
US Dollar Index  10-Aug : 82.56
Change : 0.05 or 0.1%

Platinum Price Close Today : 1,471.80
Platinum Price Close  10-Aug : 1,398.40
Change : 73.40 or 5.2%

Palladium Price Close Today : 604.50
Palladium Price Close  10-Aug : 581.50
Change : 23.00 or 4.0%

The SILVER & GOLD PRICE suffered a wretched week, until you look closer. Both ended down 0.2%, but place that against the attack they survived this week, and their bouncing back therefrom.

Today the GOLD PRICE gained 20 cents [sic] to end at $1,616.30 while silver lost 21 cents and ended 2799.5c.

GOLD ended Friday a week ago at $1,619.70, fell as low as $1,591 by Wednesday, but carved out a bottom and finished the week only $3.40 lower at $1,616.30. It's a subtle thing but all of August has been spent fighting off these attacks at successively higher levels. Next week gold will be tapping on $1,620. Only a close below $1,585 would pose any threat to gold's upward bias. Must clear $1,640 to break out upside.

Sometime in gold's near future -- in September, or, if the NGM turn on the screws to keep gold low before the election, then in November -- lies a strong rally. The correction lies behind us, left in the rearview mirror like a string of Burma-Shave signs. Gold's future will happen at higher prices.

Same holds true for silver. The SILVER PRICE started the week at 2806.2 & ended a few cents lower, but after a Wednesday low at 2750c climbed to a high at 2833 today. One bright dawn silver will cross 2860c & the shorts will run like Democrats escaping a Southern Baptist convention, or Republicans fleeing an AFL-CIO convention.

So here we are, as a friend accused me this week, trying to look at a buffalo with a microscope. Folks, gold & silver are a BULL buffalo, & they are fixing to stampede.

Since nothing happened in most markets this week, I'll explain why platinum shot up $76.90 and palladium $27.10 in the past two days.

Supply & demand for both platinum & palladium is quirky. About 75% of platinum comes from politically unstable Southern Africa and about 75% of palladium comes from politically unpredictable Russia. Other 25% of platinum comes from Russia, and of palladium from southern Africa. A third or more of demand comes from auto catalyst use, so a bad year for auto manufacturers will be a bad year for platinum & palladium.

On 16 August striking miners at the Rustenburg, South Africa mine of Lonmin threatened police with pistols, spears, & knives & the police opened fire, killing 34 & wounding 78. Strikers had already beaten to death two policemen and burned two mine security guards alive. Inevitably a gigantic political crisis results, & this was enough to send platinum's price rocketing.

As a general rule, platinum costs more than gold. Go back 20 years, and you'll rarely find the Platinum/Gold spread (platinum divided by gold) below 1.00. Generally also, when platinum costs less than gold it will be a profitable idea to swap gold for platinum. From 2000 to 2008, platinum thrice reached more than 2.35 times gold. Since then, however, the ratio has been dropping. In August 2011 platinum dropped below gold. and has remained below gold since then. Hasn't done any thing like that since 1982 and 1985.

So which comes first, the market set-up for a move, or the news that precipitates the move? Probably the set up, but I can't win by championing that notion, so I'll let it alone with the final word that if you have a LOT of gold, you might consider swapping a little bit for platinum. Don't go hog wild, just do a little.

This week markets stayed flat as a fritter. Silver lost pennies, gold lost $3.40, stocks rose half a percent, and dollar index had a face as flat as a dog that chases parked cars.

Lo! The dollar index went nowhere today, rising 23.7 basis points (0.30%) & giving up lots of that in the aftermarket. Dollar remains in tightly controlled 82.80 - 82.20 range. Natural as a bottle blonde.

Today the euro lost most of what it gained necessary, giving back 0.19% to $1.2332 & lodged again against the 20 day moving average (1.2284).

Yen kept on falling today, down another 0.27% to 125.68c (Y79.57). Now free falling below its 50 & 200 DMAs. More downside coming.

Stocks, as I observed yesterday, are moving higher. People often rag me, complaining how wrong I am about stocks, how they've kept moving higher in the face of my denunciations. Frankly, if I do anything at all to keep y'all from buying stocks or convince y'all to sell them, I'll be doing you a huge favor. Stocks are in a primary down trend, a bear market, & trying to scrape off a little profit in a counter-trend move in a bear market is like juggling straight razors -- ain't no way you can win. Adjust stocks for inflation or measure their performance in gold or silver since 2001 & you'll see what I mean. Stay away from stocks, especially mutual funds, unless it is a very special situation.

But right now stocks are headed higher. Dow ascended a less-than- lofty 25.09 (0.19%) today, S&P500 rose 2.65 (0.19%) to 1,418.16. Both indices will soon meet or slightly better their highs of this year, then they will fall off a cliff. I don't care whether the NGM can keep this anvil floating in the air until after the election, or it falls sooner, fall it will.

We had a fierce lightning storm last night that fried -- french-fried -- our telephone system. I got nearly to my office at the farm this morning and just as we were crossing the last creek on Robinson Branch, there lay a tree plumb across the road. Too big to move & me without a chainsaw. We have a gaudy lavender phone attached and are limping along, and full service will be restored Monday.

I am lightninged out. Struck the transformer in front of my house last Saturday, and ruined our phone, satellite dish, well pump, & mood. Y'all might want to protect all those delicate electronics -- even your phones -- with a surge protector.

Last week I mentioned to y'all the Transformations & Renewals gathering that I am sponsoring with Catherine Austin Fitts of You can read all about it at

It's not for everybody. If you're looking for the world to collapse & plan on digging a hole and pulling it in after you, it's not for you. If you want to build the world that will REPLACE the failing one, it IS for you. We have no grand plan to remake the world or overthrow the existing system: it's doing that all by itself. However, Transformations is for those people who want to build a new economy, working from their own workbench in their own community. Go check it out.

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.