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Monday, October 22, 2012

The Gold Price Traded in a Narrow Range Today Bumping Against the Downtrend Line Must Close Above $1,740

Gold Price Close Today : 1725.10
Change : 2.30 or 0.13%

Silver Price Close Today : 32.25
Change : 0.154 or 0.05%

Gold Silver Ratio Today : 5.354
Change : 0.005 or 0.09%

Silver Gold Ratio Today : 0.18679
Change : -0.000160 or -0.09%

Platinum Price Close Today : 1609.70
Change : -3.30 or -0.20%

Palladium Price Close Today : 622.95
Change : -0.35 or -0.06%

S&P 500 : 1,433.76
Change : 0.57 or 0.04%

Dow In GOLD$ : $159.92
Change : $ (0.17) or -0.11%

Dow in GOLD oz : 7.736
Change : -0.008 or -0.11%

Dow in SILVER oz : 41.42
Change : -0.01 or -0.03%

Dow Industrial : 13,345.74
Change : 2.23 or 0.02%

US Dollar Index : 79.62
Change : 0.045 or 0.06%

The GOLD PRICE traded in a narrow range today between $1,721.20 and $1,728.80, closing higher $2.30 at $1,725.10. The SILVER PRICE eased 15.4 cents higher to 3222.7c in a narrow range from 3240.8c to 3203c.

On both metals' charts they merely bumped up against the downtrend line today. This changeth naught. To reverse this downtrend the GOLD PRICE needs to close above $1,740. Otherwise we will see lower prices still.

Looks like the Japanese Nice Government Men got plenty fed up with trying to run an export-led economy with a rising currency. It dropped 0.789% today to 125.12 cents per hundred yen, gapping down.

The euro rose 0.29% today to $1.3060. Odd, since the US dollar index ALSO rose, 0.06% (4.5 basis points) to 79.611. That puts currencies at US$1 = Y79.92=E0.7657.

Critical point to note is that the US Dollar Index stayed above the 79.40 lip of that rounding bottom it left last week, which positions it to rally. Yes, I know I'm anticipating, but nothing else would catch the market with more surprise. Dollar is blocked by 79.68, so watch it to break through that number.

Oh, mercy! There's a Federal Open Market Committee this week. No telling how much damage those goofs will do this time.

For stocks the day just deteriorated as it wore on. sinking deeper and deeper. About 3:30 p.m. "friends" (Wink! Wink! Nice Government Men on the Plunge Protection Team) entered the market to buy enough to bring the Dow and S&P500 up to "higher by a gnat's eyebrow." Dow gained -- hold your breath! -- 2.23 to close 13,345.74. S&P500 won 0.57 to 1,433.76.

Stocks are in a parlous position. Dow today, trading BELOW its 50 DMA (13,355.6) reached down and touched the support line formed by the March thru May head and shoulder's neckline. Below that lies about the same support as what stands under you when your 747 Jumbo Jet is flying at 25,000 feet.

In the thrilling world of bank supervision, not much happens. Last year, however, the exciting fellows charged with structuring the Basel III requirements for banks proposed moving gold from a Tier 3 to a Tier 1 asset on the same footing with cash. US Federal Reserve in June circulated a memo to banks asking what they thought about that. Far as I know, this hasn't been put into effect yet in the US, but clearly it would bring gold back into the monetary system through the back door.

A friend wrote in response to my Friday remarks about the trend of de-centralization taking over the world. He objected to my claim that young people had already adopted a decentralizing mind, pointing to the Occupy people and others. First, there aren't many of them, but second, when the Great Central Power fails to come through with a cushy lifetime sinecure that recognizes their self-assessed worth, they will not be happy. Government failure to deliver on its promises will sour millions of centralization's partisans. When they have to root, hog, or die, they'll change their minds pretty fast.

I have to travel down to Florida this week. It's a rotten assignment, but somebody has to do it. I will try to send daily commentaries most days, but don't be surprised if my sunburn intervenes one of those days. I appreciate y'all's forgiving indulgence.

Y'all test how much hope you still place in politics: don't watch the presidential debate tonight. Do something meaningful instead, like re-arranging your sock drawer.

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.