Gold Price Close Today : 1,770.40
Gold Price Close 21-Sep : 1,775.50
Change : -5.10 or -0.3%
Silver Price Close Today : 34.424
Silver Price Close 21-Sep : 34.567
Change : -14.30 or -0.4%
Gold Silver Ratio Today : 51.429
Gold Silver Ratio 21-Sep : 51.364
Change : 0.07 or 0.1%
Silver Gold Ratio : 0.01944
Silver Gold Ratio 21-Sep : 0.01947
Change : -0.00002 or -0.1%
Dow in Gold Dollars : $ 156.90
Dow in Gold Dollars 21-Sep : $ 158.10
Change : $ (1.21) or -0.8%
Dow in Gold Ounces : 7.590
Dow in Gold Ounces 21-Sep : 7.648
Change : -0.06 or -0.8%
Dow in Silver Ounces : 390.34
Dow in Silver Ounces 21-Sep : 392.84
Change : -2.50 or -0.6%
Dow Industrial : 13,437.13
Dow Industrial 21-Sep : 13,579.47
Change : -142.34 or -1.0%
S&P 500 : 1,440.67
S&P 500 21-Sep : 1,460.17
Change : -19.50 or -1.3%
US Dollar Index : 79.922
US Dollar Index 21-Sep : 79.323
Change : 0.599 or 0.8%
Platinum Price Close Today : 1,647.40
Platinum Price Close 21-Sep : 1,637.10
Change : 10.30 or 0.6%
Palladium Price Close Today : 626.80
Palladium Price Close 21-Sep : 670.05
Change : -43.25 or -6.5%
The GOLD PRICE gave up $7.20 to end at $1,770.40 and the SILVER PRICE today lost 17.1 cents to 3442.4c. Right in step,
It may confuse y'all that I sound less than sunny about gold and silver, but I'm trying to read the chart honestly. Besides, I am only leery of the short run: the long run is sure, skyward, and sublime.
I've got to press on. Alliteration is about to seize up my mind.
Both metals have this week traced out what appears to be a megaphone or broadening top. In these patterns, the correction from the first plunge (especially with very strong markets) may reach or beat the high. This is a feint, a fake out, a false signal, for the following plunge will be sharp. I believe we are watching this unfold in silver and gold, but here are the bounds that will yea- or naysay me:
The GOLD PRICE above $1,805 (2 day close) with silver above 3525c screams that no correction is coming soon, or Gold below $1,738 (1 day close) with silver below 3336c sets both up for lower prices.
The 20 day moving averages, first tripwire of a decline, stand now at 3363c and $1,748. Any closes thereunder point down. Correction targets are $1,700 and $1,650 for gold, 3200c and 3100c for silver. If they do fall, expect it to last no more than three weeks.
I repeat: misunderstand me not. Silver and gold have already begun their next leg up that will carry gold above $4,000. The weakness I am expecting is very short-lived and a mere bagatelle compared to the long term outcome.
One of the most difficult thing to explain to my customers is that they are FAR, FAR better served in a long term bull market to keep their excess funds in silver and gold rather than in a bank. Today came a gracious example. A customer called to sell some silver and gold to meet a family need. She had converted US$5,000 to gold and silver in October 2008 (good timing). She sold it today at a 90.2% gain -- it was worth nearly twice what she had paid for it. I won't tell y'all about her profit on what she bought in 2006.
It's a bull market. That means that year after year, silver and gold become more value -- they don't just hold their own against paper dollars, they GAIN.
I reckon we live in Candide's Best of All Possible Worlds, where we hoi polloi don't have to worry about a thing 'cause our central bank massas are sure taking care of us. Yes, sir!
Except for a practically meaningless 8/10% rise in the US dollar index, markets at first glance did nothing. At second glance, however, other shapes appear. Remember, too, that the scoreboard never lies. Silver, gold, stocks, palladium the yen and euro all lost this week.
Talk about the Best of All Possible Worlds! Why, US$1 = Y77.98 = E0.7784. It don't get no better than that, central bankers walking hand in hand, depreciating their currencies in perfect time like they were waltzing.
US dollar index this week closed 79.922, up 60 basis points for the week and 37.4 for the week. Dollar, if your gonna strut your stuff, you'd better step higher than that! Dollar ranged this week from 79.35 to 80, and failed again today to clear that 80 hurdle.
Dollar is dancing with its 20 Day Moving Average (79.97) and if it should pierce that and resistance at 80, might run to its 200 DMA at 80.72 before it collapses again into the dung heap where it belongs. Whoops. I've got to watch that. Start talking about the dollar and my bile just leaks out everywhere. Something about a set-up where private individuals are given the state's powers to steal from the whole world just goes down crossways in my gullet.
Back to the thread: My guess is that the US, European, and Japanese central banks have struck a deal to keep their currencies in a range from $1 = Y75 = E0.75 to US$1 = Y83 = E0.83. You are watching them control that. However, should the dollar break 78.60, the last low, the sharks will come in and short like crazy, creating manifold and multitudinous migraines for the Nice Government Men.
Yen closed today own 0.49% at 128.23 cents (Y77.98). Euro lost 0.53% to $1.2847 (E0.7784). Both lost steam and faded today, and neither show any signs of liveliness, up or down.
In gold terms, both the Dow and the S&P500 are working their sweatiest to break down and fall. Dow in Gold gapped down yesterday and is sitting near its recent lows. S&P500 in Gold didn't gap down but is well below its 200 DMA, 0.8057 oz today against the 200 dma at 0.824. Dow looks even worse, 7.57 oz against a 200 at 7.80 oz.
In paper terms the Dow today bounced off its 20 DMA (13,402.12), closing down 48.84 at 13,437.15. Any break below 13,300 - 13,250 would be fatal. However, when Octobers are not deadly months for stocks, they sometimes see tops. Think of October 2007. Be not surprised, therefore, nor amazed, if the Dow runs even to the 14,200 top of that year. 'Twill not be strength, but death throes.
For the S&P500 a break below 1,420 would deal death.
For both indices, keep bearing in mind that their gains in paper dollar terms will be nugatory, fruitless, barren, feckless, and futile. All the while they will be losing value against gold, for they have already broken down in gold terms. Be not fooled by the Ben Behind the Curtain!
Y'all enjoy your weekend.
Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.
- Franklin Sanders, The Moneychanger
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© 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.
