Thursday, October 11, 2012

The Gold Price Closed Up and Silver Down is Gold Consolidating?

Gold Price Close Today : 1,768.80
Gold Price Close 5-Oct : 1,778.60
Change : -9.80 or -0.6%

Silver Price Close Today : 34.046
Silver Price Close 5-Oct : 34.516
Change : -0.47 or -1.4%

Gold Silver Ratio Today : 51.953
Gold Silver Ratio 5-Oct : 51.530
Change : 0.42 or 0.8%

Silver Gold Ratio : 0.01925
Silver Gold Ratio 5-Oct : 0.01941
Change : -0.00016 or -0.8%

Dow in Gold Dollars : $ 155.74
Dow in Gold Dollars 5-Oct : $ 158.18
Change : $ (2.44) or -1.5%

Dow in Gold Ounces : 7.534
Dow in Gold Ounces 5-Oct : 7.652
Change : -0.12 or -1.5%

Dow in Silver Ounces : 391.42
Dow in Silver Ounces 5-Oct : 394.31
Change : -2.89 or -0.7%

Dow Industrial : 13,326.39
Dow Industrial 5-Oct : 13,610.15
Change : -283.76 or -2.1%

S&P 500 : 1,432.84
S&P 500 5-Oct : 1,460.93
Change : -28.09 or -1.9%

US Dollar Index : 79.777
US Dollar Index 5-Oct : 79.417
Change : 0.360 or 0.5%

Platinum Price Close Today : 1,687.80
Platinum Price Close 5-Oct : 1,703.30
Change : -15.50 or -0.9%

Palladium Price Close Today : 649.45
Palladium Price Close 5-Oct : 661.75
Change : -12.30 or -1.9%

I'm sending you this weekly summary early this week, because tomorrow I will be busy with the Transformations and Renewals Conference. God willing, I will return Monday, having enjoyed an enlightening and uplifting weekend.

Let's think first about the GOLD/SILVER RATIO before we talk the silver and GOLD PRICE. Today's ratio closed at 51.953, near the top of the last month and a half's range. Above, between 53.5 and 54 is a gap the ratio left on the way down. More, the 50 DMA stands at 53.74 and the 200 DMA at 54.05, and both are likely targets for an upside correction. Odds here favor a rise to 54. Remember that a rising ratio means falling gold and silver, and vice versa.

The GOLD PRICE closed up $5.60 to $1,768.80 while silver gainsaid with a lower close, down 2.7 cents to 3404.6.

Both silver and gold have traced out broadening tops formations punctuated by a double top. This might instead prove to be a consolidation formation, it's true, but until gainsaid, gravity has control.

GOLD PRICE must sling its leg over $1,800 and step out smartly to contradict this broadening top view. Down below, if it breaks the last low ($1,738) it will probe beneath down to $1,700 or $1,650.

The SILVER PRICE has double tops about 3544c, and a hammock beneath at about 3350c. Targets if it falls out of that hammock are 3100c and 3200c.

Instead of whining and griping, let loose that smile and thank Heaven for the opportunity to buy silver and gold at reduced prices before they launch moonward.

Here's an example why I don't worry too much about short term timing. Customer reminded me today he had bought in August 2008 at $805 gold and $14.15 silver. After August 2008 both nosedived, silver down to $8.80 and gold to $705. Owch! We're ruined!

Not quite. As of today, that silver had gained 123% (was 2.23 times what he paid for it) and the gold had gained 108% (was 2.08 times cost).

Looking from here, that temporary spasm of bad timing doesn't look so bad after all.

The weekly scoreboard always tells the tale. First, confusion abounds. Markets that should move together show mixed and contradictory closes, e.g., Dow down and S&P500 up, gold up, silver down. However, all these closed lower this week: gold, silver, platinum, palladium, the Dow, and the S&P500. On that board, only the dollar rose this week, and that grudgingly. Seems obvious that investors are wary of committing themselves before the election, although whether Peter Pan or Tinkerbelle is elected, it won't make any difference in anything, except the rate at which we are fleeced and enslaved.

Yesterday morning on National Proletarian Radio, the Voice of International Socialism and Stupidity, I heard some college students interviewed about the election. I pass over in silence exactly how much deep judgment a 21 year old can have, and get to the point. One girl said she was voting for Romney because he could create jobs. Could y'all hear me groan?

You cannot have an intelligent conversation with a person who believes that politicians create jobs. They simply don't know enough to form the words. PRODUCERS create jobs, governments consume resources. Any money government spends must by inflating or taxing come first from producers, curtailing their resources, causing them to consume less, and, obviously, employ fewer workers.

Maybe the government is putting something in the water that makes people believe stupid ideas really will work: stupidium, the last and dumbest element.

At the moment the big question overhanging the market is whether the US dollar index is down for the count or intending to rally. It has twice sought to break through 80, with wretched impotence. Today it held on above its 20 DMA, so technically remains pointed up. Dollar is battling its downtrend line from July, and should it conquer, will run to the 200 DMA at 80.70, or even to 81. This will spook stock and metals investors the way a green dog spooks quail in an open field. (He doesn't know to stop and point at 'em.)

To maintain upward momentum the US dollar index must remain above 79.50.

US1.00 = E0.7737 = Y78.33. Euro closed up 0.46% at $1.2925 but beneath its $1.2958 20 DMA. Has failed to breach that downtrend line and advance. Looks mighty poorly, kinda green around the gills.

Yen closed 127.67 cents, down 0.18%. Every bit as flakey as the euro.

Stocks have reached the Fish or Cut Bait crossroads. If the Dow closes below 13,300 (50 DMA is 13,326) it will fly like your seven-year old trying his batman cape off the garage roof.

Dow today dropped 18.58 (0.14%) to 13,326.39 while the gainsaying S&P500 rose 0.28 to 1,432.84. Both the Dow and S&P500 have fallen down from their rising wedges and unless they can catch their balance and rise, a fall yet huger awaits.

Whoopie! The digital versions of At Home In Dogwood Mudhole are ready. Hard copies won't be here until 26 October, but if you want to purchase AHIDM in PDF, Kindle, or e-Book format for $16.95, you can order at

And once y'all order and have a chance to read a little, let me know what you think. If it doesn’t make you gasp, laugh, cry, or jump up and down (or all at once), I'll refund your electrons.

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.