Monday, October 01, 2012

The Gold Price Rose $9.40 After a new Intraday High Closing at $1,780.50

Gold Price Close Today : 1780.50
Change : 9.40 or 0.53%

Silver Price Close Today : 34.881
Change : 0.364 or 1.05%

Gold Silver Ratio Today : 51.045
Change : -0.266 or -0.52%

Silver Gold Ratio Today : 0.01959
Change : 0.000102 or 0.52%

Platinum Price Close Today : 1681.50
Change : 16.20 or 0.97%

Palladium Price Close Today : 644.45
Change : 4.80 or 0.75%

S&P 500 : 1,444.49
Change : 3.82 or 0.27%

Dow In GOLD$ : $156.91
Change : $ 0.09 or 0.06%

Dow in GOLD oz : 7.591
Change : 0.005 or 0.06%

Dow in SILVER oz : 387.46
Change : -1.83 or -0.47%

Dow Industrial : 13,515.11
Change : 77.98 or 0.58%

US Dollar Index : 79.81
Change : -0.241 or -0.30%

I couldn't find any particular news item as a catalyst, but something hit the GOLD PRICE this morning about 8:30, shooting it from just below $1,770 to $1,790.70 quicker than a cat can cross a road. Well, a 30-minute road-crossing cat, anyway.

Yet the GOLD PRICE couldn't hold on to those gains, and after a small double peak fell back to make a $1,770 - $1,780 range. After a new intraday high ($1,790.70) gold closed $9.40 richer, bless its heart.

So gold hit a higher high for the move today, after it had hit a lower low than Friday ($1,764.63). This is not weak action, but the outcome will be influenced by all this silly banking/bailout announcements this week. Gold could be stopped cold by $1,805, or pass on through. I certainly would not want to be short gold right here.

The SILVER PRICE gained 36.4c today to 3388.1c. Today's 3535c high surpassed the last intraday high (3526c).

Silver's breakaway today came from 3440c, about that mysterious 8:30 a.m. witching hour. Shot straight up to 3535c, them came about as straight down, but to a higher range, 3450 - 3490. Many pessimists lurk above 3500c, awaiting every chance to sell silver up there. GOLD/SILVER RATIO dropped a little today, from 51.429 Friday to 51.045, so silver is moving up faster than gold, but one question nags: why can't it get through 3500c to close at a new high like gold? That's not a fatal question, just one of those out of place items that sends a little shiver over your brain trying to put it in its proper place.

If those pessimists ever leave the gate open for silver, it'll sprint for 3750 in great leaps and bounds, as only silver can.

So I'm sitting here sweating, because all it will take to kill my expectation of a correction is a gold close above $1,800 or silver above 3550c. Tomorrow ought to remove all my doubt.

I am growing increasingly uneasy about expecting a large correction in silver and gold. I'll explain later.

Central banks in Australia, England, and Europe will announce interest rate decisions this week. If they lower rates that ought to fuel gold's rise further. More, rumors say Spain will ask the EU for a bailout this week. Remember the Moneychanger's Political Economy Formula, BS = MI2, or, Bailout Spain = More Inflation Squared.

Clearly the market anticipates more bad news for the dollar. After flattening its face on the ceiling at 80 Friday, the US dollar index lost another 24.1 basis points (0.31%) today to 79.812. That dollar index is as spry as a grasshopper after you drop a cinderblock on him.

Boundaries for the dollar are a close above 80.10 to turn up, or a close below 79.40 to turn down.

This remains the Best of All Possible Worlds as hand in hand central bankers take the global economy over the cliff, skipping along in step while they eviscerate their currencies. Never mind, above all, the Banks Must Be Fed.

Euro closed at $1.2889 while the Yen closed 128.20c. (US$=Y78.00 = E 0.7758). Neither changes the technical picture at all, except the euro, scrofulous construct that it is, is bouncing along under its downtrend line.

Stocks continue to tag along after gold and silver after the dollar. Sort of like one of those stupid things that you did when you learned that you could not pull a trailer with your pick-up truck when all they have is a chain. Need a trailer hitch, cause the trailer hath no brakes.

Yet stock buyers will get a huge surprise when that dollar really keels over sick and gold races away. Today the Dow gained 77.98 (0.5%) to 13,515.11. S&P500 also gained 3.82 (0.27%) to 1,444.49. The Dow has trampolined off its 20 DMA (13,423) while the S&P500 hit the bottom boundary of its rising wedge. Both, I suspect, will rise further, defrauding more unwary of their hard earned savings.

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.