Friday, August 03, 2012

The Silver and Gold Price have Defended their Lows Look for Much Higher Prices in September

Gold Price Close Today : 1,606.00
Gold Price Close 27-Jul : 1,618.00
Change : -12.00 or -0.7%

Silver Price Close Today : 2779
Silver Price Close 27-Jul : 2747.8
Change : 31.20 or 1.1%

Gold Silver Ratio Today : 57.791
Gold Silver Ratio 27-Jul : 58.883
Change : -1.09 or -1.9%

Silver Gold Ratio : 0.01730
Silver Gold Ratio 27-Jul : 0.01698
Change : 0.00032 or 1.9%

Dow in Gold Dollars : $ 168.57
Dow in Gold Dollars 27-Jul : $ 167.06
Change : $ 1.51 or 0.9%

Dow in Gold Ounces : 8.155
Dow in Gold Ounces 27-Jul : 8.082
Change : 0.07 or 0.9%

Dow in Silver Ounces : 471.25
Dow in Silver Ounces 27-Jul : 475.87
Change : -4.61 or -1.0%

Dow Industrial : 13,096.17
Dow Industrial 27-Jul : 13,075.88
Change : 20.29 or 0.2%

S&P 500 : 1,390.99
S&P 500 27-Jul : 1,385.98
Change : 5.01 or 0.4%

US Dollar Index : 82.318
US Dollar Index 27-Jul : 82.676
Change : -0.358 or -0.4%

Platinum Price Close Today : 1,412.90
Platinum Price Close 27-Jul : 1,406.70
Change : 6.20 or 0.4%

Palladium Price Close Today : 577.40
Palladium Price Close 27-Jul : 571.05
Change : 6.35 or 1.1%

'Twas a week of correction for the silver and GOLD PRICE, complete with a peach tree branch whipping. Yet after dipping back into their triangle formations, after gold touching its 50 and 20 DMAs, both ended the week well outside those triangles again. Looks like the final kiss good-bye before a rally. Rally may spend the rest of August rolling out, but the lower prices appear behind us.

Today the GOLD PRICE vaulted 1.2% while silver leapt 3.3%. Further witness of a turnaround is today's significantly lower GOLD/SILVER RATIO (57.791) after nearly touching the last high last week. Gold jumped $18.60 to $1,606. The SILVER PRICE grabbed 89 cents to close way above 2700c resistance at 2779c, above its 20 and 50 DMAs. Other indicators point higher, too.

There's a very interesting study by Alf Field. What's interesting is that gold made a series falls of 88 days, 55 days, and 33 days, with a low falling 23 July. Add 11 days to that and you come to 3 August. Apparently the low came yesterday and was nearly matched today before gold shot up.

BOTTOM LINE: silver and gold have established and defended lows in their post April-2011 and post-August 2011 corrections. They may not run away from here, but time and price loudly argue that the correction lies behind us. Look for much higher prices in September. That suggests y'all ought to buy silver and gold here.

Down below the SILVER PRICE must not fall through 2680c nor gold through $1,585, and above gold must steam quickly through $1,640 resistance and on to $1,680.00

Don't let a long correction and all the central bank blarney and blather deceive you. Bad debt, sick economies, and rotten banks have not been cured. As it now appears, Obama will beat what's his name, Mr. Forgettable, and if he does he will let all the Inflationists and Spenders out of the loony bin. Not what I want to happen, but I'd be a pure king fool sure enough if I didn't tell y'all the truth.

Markets got pushed around this week like an old bull gets pushed around by a young one. In the end, silver and gold won, stocks won, the euro won, and the dollar and yen lost. Way to paint that tape, Nice Government Men!

Friends, you can believe a lot of things, but how can you believe something that gainsays itself out of its own mouth? I'm a fool, but not that big a fool. I reckon we raise a better run of fool here in Tennessee than in the rest of the world.

Media tells us that euphoria and generalized jubilation broke out in the stock market and the euro because the US employment report today -- which, I mark in passing, ain't worth no more than an "I love you" off a trashy girl's lips, cause it's a government number -- "beat expectations" and came in at 163,000 new jobs created instead of 100,000. Break out the champagne, right? Nope, the unemployment rate in fact rose from 8.2% to 8.3% (itself an hilariously understated number, maybe half or a third of actual unemployment). So right there its blowing hot and cold out of both sides of its government mouth.

That, at least, is what this Tennessee fool's common sense would logic out of that report, but durned if the mystery of stock and currency markets ain't too deep for me. First, the US dollar index lost a massive 100.3 basis points (1.29%). Throwing risk aversion and caution to the wind, the yield on US 10 year treasuries rose, after recent all time lows (bonds fall when yields rise, remember). That now begins to look as if it might be scratching out a bottom. So folks run out of dollars and out of Treasuries, but not just mincing along, they stampede.

Course my suspicious mind says the NGM, unable any longer to stand a high dollar and sinking euro, pushed markets over the brink into the deep. Makes no never mind, it happened.

Euro rose a ridiculous 1.68% to $1.2388. Jumped clean through its 20 day moving average (1.2242) and nearly plumb to the 50 dma ($1.2410). All of this is useless noise unless the euro can clear $1.2500, and then around $1.3000 there waits a minefield of resistance.

What y'all need to note here is that the dollar gave up all the last few days' gains as well as falling below its 20 DMA (83.18), its 50 dma (82.68), and below 83 support. It came to rest up against support of a fan line. from the Oct. 2011 low. Should that fail and the last low (81.50) not hold, the dollar will pay a visit to its 200 DMA (80.08).

Before I leave these nasty, scabrous fiat currencies, let me mention that the yen closed down 0.30% at 127.46 cents (Y78.46), and is making a megaphone formation, deadly to upward moves.

Stocks are showing themselves determined to try at least to move higher, yet today's performance, bold as it was, only posted a double top with last Friday. Stunning as it was, stocks' move means nothing unless they improve on it next week. There remaineth the chance that stocks will move back to May highs (S&P500 1,420 and Dow 13,300) before they fail. That would paint a baleful triple top over investor's hopes.

Dow today rose 217.29 (1.69%) to slightly better last week's high (13,076) and closing at 13,096.17. S&P500 gobbled up 25.99 (1.9%) to end at 1,390.99, versus last week's 1,386.

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.