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Wednesday, October 17, 2012

The Gold Price Rose Again Can it Foretell Higher Prices by Closing Above $1,760 or Will the Correction Continue?

Gold Price Close Today : 1751.50
Change : 6.80 or 0.39%

Silver Price Close Today : 33.197
Change : 0.275 or 0.84%

Gold Silver Ratio Today : 52.761
Change : -0.234 or -0.44%

Silver Gold Ratio Today : 0.01895
Change : 0.000084 or 0.44%

Platinum Price Close Today : 1668.00
Change : 11.40 or 0.69%

Palladium Price Close Today : 653.70
Change : 6.35 or 0.98%

S&P 500 : 1,460.91
Change : 5.99 or 0.41%

Dow In GOLD$ : $160.00
Change : $ (0.55) or -0.34%

Dow in GOLD oz : 7.740
Change : -0.026 or -0.34%

Dow in SILVER oz : 408.38
Change : -3.25 or -0.79%

Dow Industrial : 13,557.00
Change : 5.22 or 0.04%

US Dollar Index : 79.02
Change : -0.205 or -0.26%

The silver and GOLD PRICE edged up once again today. Gold gained $6.80 to close at $1,751.50 and silver added 27.5c to close 3319.7c.

Gold has reached the support/resistance where it fell off before, $1,755. It is also about to bump forehead first into the downtrend line from the last top, so will meet opposition from two angles. Not promising.

However, if the GOLD PRICE can close above $1,760, I might change my mind. Right now, however, it appears lower prices are coming.

Charts for the SILVER PRICE are virtually identical with those Silver is hitting lateral resistance at 3335c and the sloping downtrend line about 3350c. Can this work out to the upside? Lo, 'tis doubtful. A close above 3400c would slay my doubts.

Before y'all wax cross with me, remember not to shoot the messenger. Corrections are uncomfortable for me, too, but better the painful truth than a buttery lie.

Lately I've been getting lots of questions about manipulation of silver and gold. No question in my mind that central banks and the US government manipulate the gold price through Wall Street agents. That's in the statute (Exchange Stabilization Fund in the 1934 Gold Reserve Act authorizes covert gold price manipulation by the US treasury), policy, and observed fact. Go see GATA's work at www.gata.org or Bill Murphy's www.lemetropole.com for all the proof any reasonable person might need.

Then I am asked, "But what good is technical analysis if the market is manipulated?" Plenty, because the manipulation has failed, is failing, and will fail. Typical of any government operation, the coalition has succeeded in suppressing the gold price from $252 to $1,750 and silver from $4.02 to $33. Almost as successful as Medicare, social security, and Amtrak.

Put yourself in the manipulators' shoes. They know they can't turn back the powerful tide of gold and silver's primary trend, because they are driven by monetary inflation and they're not about to stop that. Thus the best they can do is try to slow gold down, to harass, to dog, to badger, but no more. Hence, if you were manipulating, wouldn't you stand back when gold is screaming upward, accumulate short positions, then when it begins to weaken sell with both hands? Makes sense to me, but then, I'm only a natural born fool from Tennessee.

Everybody except the stock market optimists is laying low until after the US election. That doesn't make for very interesting markets.

Currencies today stand at US$1 = Y78.95 = E 0.7621.

Dollar index continued to slide today, down another 20.5 basis points (0.26%) to 79.016, crashing through its second line of defense support. Burden of proof now rests on the buck to prove it's not aiming to fall further, say, another 40 basis points anyway.

Yen and euro have taken different forks in the road. Yen gapped down two days ago, is below its 50 and 20 day moving averages, and dropped again today, -0.12%, to 126.57c. 200 DMA lurks only 43 basis points below at 126.13, and if the yen falls through that it will attract sellers like a pretty girl attracts invitations to dance.

Euro, on the other hand, has gapped up twice in the last two days. Added another 0.41% to $1.3122 today. Yet it hath not yet exceeded the September intraday high at 1.3172. Why, O, why am I so suspicious? Why do I suspect the Euros made a deal with the US administration to keep things as quiet as possible until after the election? Am I just mean, or insightful?

Stocks gained again today, the Dow lagging. Dow added only 5.22 (0.04%) to 13,557.00 while the S&P500 jumped 5.99 (0.41%) to 1,460.91.

Stocks are reaching for that place they stalled (13,660) earlier this month. If they can pass that, they'll make a new high and all the touts and sirens will be crowing, Dow will push toward 14,000, and the jubilating will be general. Of course, after Obama is re-elected, the gas will come out of that balloon.

Y'all have heard of "counter-cyclical" rallies? Well, this is a "counter-reality" rally.

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.