Tuesday, October 09, 2012

The Gold Price is Correcting after it's Long Rally Watch for Buying Opportunities Coming Soon

Gold Price Close Today : 1765.40
Change from October 5: -13.20 or -0.74%

Silver Price Close Today : 33.700
Change from October 5: -0.816 or -2.36%

Gold Silver Ratio Today : 52.386
Change from October 5: 0.856 or 1.66%

Silver Gold Ratio Today : 0.01909
Change from October 5: -0.000317 or -1.63%

Platinum Price Close Today : 1693.50
Change from October 5: -9.80 or -0.58%

Palladium Price Close Today : 657.50
Change from October 5: -4.25 or -0.64%

S&P 500 : 1,441.48
Change from October 5: -14.40 or -0.99%

Dow In GOLD$ : $157.77
Change from October 5: $ -0.09 or -0.06%

Dow in GOLD oz : 7.632
Change from October 5: -0.004 or -0.06%

Dow in SILVER oz : 399.81
Change from October 5: 6.26 or 1.59%

Dow Industrial : 13,473.53
Change from October 5: -110.12 or -0.81%

US Dollar Index : 80.01
Change from October 5: 0.589 or 0.74%

Y'all outside the United States please note that yesterday was a US holiday, so the changes in prices shown above are calculated from Friday.

The silver and GOLD PRICE decayed more today, but without any definitive breakdown. Gold toppled $13.20 to $1,765.40 while silver backslid 81.6 cents to 3370c.

Particularly eye-catching was the GOLD/SILVER RATIO 0.856 point leap to 52.386 from 51.530 on Friday. Rising ratio points to falling silver and gold.

Today gold closed below its 20 day moving average, now $1,769.86. If $1,755 support holdeth not, then all will hinge on $1,738.30, the last low.

The GOLD PRICE has drawn a broadening top, and is breaking down from that pattern. It would have to close above $1,800 to reverse direction. Possible -- possible, not certain -- targets are $1,720, $1,690, and $1,650. Expect lower prices tomorrow.

The SILVER PRICE has also sketched out a broadening top and broken down from it. Losing 81.6c today was not good, but the low at 3357c almost touched the previous low at 3336c. Breaking that 3336c low would push silver back to its 300 DMA (3221) or lower, to 3200c or 3100c.

I ought to add that silver and gold must confirm these falls with lower closes tomorrow.

You are watching nothing more than a usual correction after a long rally. Stay calm, watch closely for a buying opportunity that ought to come soon.

German chancellor Ferkel visited Greek premier Samanas today and nobody had a good time. He wants austerity delayed to 2016, she won't budge, so Greece may not get its next bailout payment.

Needless to add, this didn't help the euro's exchange rate much. It dropped 0.69% to $1.2878. This move bleeds all sorts of bad juju. It leaves the euro below $1.2900 support, and way below the $1.3000 mile marker, and barely above its 20 DMA (129.63). It gets worse. The euro is hovering above its 200 DMA (128.30), and a fall through that will draw sellers like a three day ripe road-killed armadillo draws buzzards. Twice now the euro has assayed to breach its downtrend line, twice been driven back, starting an eyecatching chain of lower highs. The 200 DMA at 128.30 is a trap door. If the euro falls through that, count on it dropping 200 basis points fast.

US$1.00 = E0.7765 = Y78.22.

Yen today rose 0.1% to 127.84 US cents. That is dancing under the wing of the 20 DMA, but changes nothing. Both the yen and the euro have posted lower highs in series against the dollar, not a hopeful sign for these loser currencies.

The other loser currency, the US Dollar index, gained 58.9 basis points (0.74%) today and closed above 80 at 80.009. Daily chart shows a strong, determined move. Longer term chart shows the dollar index has recovered from last week's false downside breakdown AND pierced its downtrend line from July. 'Tisn't yet a sure thing, but this is a strong hint at a rally that could easily touch the 50 DMA at 80.98. Won't the stock markets, the euro, and silver and gold love that?

The S&P500 in gold has failed and dropped back at its 200 DMA, after the breakdown from a broadening top in mid-August. Dow in Gold briefly penetrated its 20 DMA (2 days) then fell back to it today, after a breakdown from a diamond top in mid-August. Translation? Stocks will begin losing value against gold even faster than they have been.

The market was not kind to stocks today in dollar terms, either. The Dow caved in 110.12 (0.81%) to 13,474.53, bringing reminders that the 13,300 level is the must hold for the Dow. Owch! That close also pulled the Dow below its 20 DMA (13,521), and left behind a double top about 13,650.

'Tain't that good for the S&P500. Not only did it close below its 20 DMA (1452.24), it also violated its uptrend line. It's critical to hold 1,425.

S&P500 today buckled 14.4 points (0.99%) to 1,441.48. Odds strongly favor lower stock prices. Soon.

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.