Friday, October 26, 2012

The Gold Price Looks to have Almost Finished it's Correction I Will Likely Buy Gold Early Next Week

Gold Price Close Today : 1,710.90
Gold Price Close 19-Oct : 1,722.80
Change : -11.90 or -0.7%

Silver Price Close Today : 32.01
Silver Price Close 19-Oct : 32.07
Change : -0.062 or -0.2%

Gold Silver Ratio Today : 53.447
Gold Silver Ratio 19-Oct : 53.715
Change : -0.27 or -0.5%

Silver Gold Ratio : 0.01871
Silver Gold Ratio 19-Oct : 0.01862
Change : 0.00009 or 0.5%

Dow in Gold Dollars : $ 158.37
Dow in Gold Dollars 19-Oct : $ 160.11
Change : $ (1.74) or -1.1%

Dow in Gold Ounces : 7.661
Dow in Gold Ounces 19-Oct : 7.745
Change : -0.08 or -1.1%

Dow in Silver Ounces : 409.46
Dow in Silver Ounces 19-Oct : 416.04
Change : -6.58 or -1.6%

Dow Industrial : 13,107.21
Dow Industrial 19-Oct : 13,343.51
Change : -236.30 or -1.8%

S&P 500 : 1,411.94
S&P 500 19-Oct : 1,433.19
Change : -21.25 or -1.5%

US Dollar Index : 80.043
US Dollar Index 19-Oct : 79.633
Change : 0.410 or 0.5%

Platinum Price Close Today : 1,544.80
Platinum Price Close 19-Oct : 1,613.00
Change : -68.20 or -4.2%

Palladium Price Close Today : 595.70
Palladium Price Close 19-Oct : 623.30
Change : -27.60 or -4.4%

I'm re-thinking the silver and GOLD PRICE: they may have posted their lows this week at 3118.4 cents and $1,698. Possibility is great enough to tempt me to buy a little bit here. Note that the GOLD/SILVER RATIO fell from 53.715 to 53.418. Not big, but the right direction (down when silver and gold are rising) for higher silver and gold prices.

What's this meditation's other side? It's Friday, so people who were holding profitable short positions tend to close them out at the weekend. That might buoy up the market for one day alone. Also, the weekly silver and gold charts so the August breakout and peak, then a decline toward the downtrend line (which both metals broke in August). A kiss good-bye move might touch that downtrend line.

Palladium and platinum argue for an end to the decline. Palladium has given up most of what it has gained since July (from $556 to $705.8 and back to $586.65 three days ago). Platinum has given up a little more than 50% of the same crazed move ($1,378.50 to $1,734.50). Today it closed $1,544.3 just below its 200 DMA (1,552.86), frequent end target of a correction.

The GOLD PRICE today fell back $1.10 to $1,710.90. The SILVER PRICE frittered away 3.8 cents to 3201.1c. Thing that catches my eye is this: after the big losses of last week, this week they barely declined. At least the rate of fall is shrinking. There's a landing for silver and gold here somewhere.

Besides, metals have reached the point where downside risk has shrunk to manageable size. From 3201.1, even a fall to 3050c is only 4.5% From $1,710.90 to $1,650, 4.6%. Unless Monday shows a freefall, I will buy at least some silver below 3200c or gold below $1,700. A little anyway, just in case they might have finished their decline.

SILVER and GOLD are completing the correction of the August - September rally. Start nibbling at them, but give them a little time. Presidential election uncertainty still overhangs silver and gold as well as all markets, even though it won't make any difference to metals' inevitable and relentless bull market. Buy when everybody else's spine is turning to Jell-O.

As I said, I have to re-think this gold and silver thing. They may have bottomed this week. Stocks took a bad beating with a stout stick. Dollar index rose .05%, but didn't jump high enough over 80 to prove a rally. Platinum and palladium lost more than 4%. Euro and Yen both faded this week.

The treacherous US dollar index climbed from 79.633 to 80.043. At last, it has closed above 80, first hurdle of a dollar rally. However, today the dollar lunged to 80.27 only to be slapped back in a few hours to 79.923. Rest of the day leveled out, leaving behind a toppy formation that looks like a head and shoulders. Of course, that might also be a continuation pattern, too

My surprise dollar rally suspicion would be gainsaid next week if the dollar index closes below 79.70. Really, it ought to advance above today's high, 80.27, by Tuesday. Otherwise it will just be spinning tires and wasting buying power and attention.

Whether the dollar rallies or not, this week the yen and euro fainted. Euro relentlessly slid this week, stopping today at $1.2938 (US$1= E0.7729). Momentum is down: euro sank below the 20 DMA ($1.2974) and stands only a few points above the 200 DMA at 128.36. Euro turns smartly down should it break that 200 DMA.

Yen has played a jerky game this week. Gapped down, looked like it had found its feet, then gapped down again to a low at 124.48 cents per 100 yen (US$1 = Y79.68). About to drop further, right? Nope, turned smack around and rose 0.82% to close today at 125.56, filling the gap and reaching for the 200 DMA at 125.97. Direction is firmly down as long as the yen remains below that 200 DMA.

Right now, the Japanese Nice Government Men are winning the Race To Depreciate, the euro is running second while the dollar keeps gaining weight. Ben Bernanke won't enjoy his martini tonight.

Stocks are badly confused. Today the Nasdaq, Nasdaq 100, and midget Nasdaq indices, along with the Dow industrials, all rose minutely. The broader S&P500 and Russell 2000 both dropped a wee bit.

Dow had another raggedy day, spent almost all the day deeply under water, as low at 13,046, then found friends to buy about 1:30, and fluttered around unchanged, climbed a little, but closed only 3.53 (0.03%) higher at 13,107.21. S&P 500 ran about the same, but when the bell rang it was 1.02 lower (0.07%) at 1,411.94.

I'm not at home in Tennessee, but I got a text from my daughter that the hard copies of At Home in Dogwood Mudhole have arrived from the printer. They'll begin shipping on Monday. I appreciate y'all's patience.

You can still buy At Home in Dogwood Mudhole at in hard copy (yes, I'll still autograph it if you order by Monday, 29 October). Or you can download it instantly (once you pay for it, of course) in PDF, Kindle, or ePub format.

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.