Tuesday, October 02, 2012

The Silver and Gold Price Lost Ground Today Both Tightening their Trading Range Ahead of a Likely Upward Breakout

Gold Price Close Today : 1772.70
Change : -7.80 or -0.44%

Silver Price Close Today : 34.604
Change : -0.277 or -0.79%

Gold Silver Ratio Today : 51.228
Change : 0.183 or 0.36%

Silver Gold Ratio Today : 0.01952
Change : -0.000070 or -0.36%

Platinum Price Close Today : 1682.90
Change : 1.40 or 0.08%

Palladium Price Close Today : 648.96
Change : 8.60 or 1.34%

S&P 500 : 1,445.75
Change : 1.26 or 0.09%

Dow In GOLD$ : $157.22
Change : $ 0.32 or 0.21%

Dow in GOLD oz : 7.606
Change : 0.016 or 0.21%

Dow in SILVER oz : 389.62
Change : 2.16 or 0.56%

Dow Industrial : 13,482.36
Change : -32.75 or -0.24%

US Dollar Index : 79.74
Change : -0.073 or -0.09%

The GOLD PRICE lost ground today, down $7.80 to $1,772.70, and silver was right by its side, losing 27.7 cents to 3460.4c.

As with other markets, it wasn't so much that it fell as that it just edged down sidewise. Range today was tighter than yesterday's, probably reflecting investor uncertainty. High came at $1,784.05, low at $1,770.75, but on balance the sellers outnumbered the buyers.

So the GOLD PRICE has resolved nothing, answered nothing, merely tightened its range. A close above $1,790 takes it higher, a close below $1,760 drags it lower.

The SILVER PRICE range tightened to 3505 (lower than yesterday) and 3439.5c. We await a move above 3550c or below 3440c.

Life isn't always lively. Silver and gold are becalmed on a sea of central bankers' intents. They will break one way or the other, and I am leaning toward upward.

Today was a day notable only for its unnoteworthiness. Nothing much happened, unless you count the annoying presidential race, in which the nothing that did happen was puffed up to pass for something. It's a great thing that we on Plantation America every four years get to pick our overseer. After all, he works for us, right?

I've been reading the Fed's September 13 announcement about QE3, and I've changed my mind. They won't be creating half a trillion new dollars. With all the other tricks, it will touch closer to a full trillion.

How are y'all CDs doing? That dollar's safer than gold or silver, right? It doesn't go up and down like silver and gold do, so it's easier to keep up with. It just goes down.

Y'all won't believe it, but people have actually said that to me, such prisoners are they of the dollar as their numeraire. Seems they haven't caught on that every price or exchange rate is a fraction, and one man's denominator is another man's numerator. For instance, today one US dollar buys 0.032 ounce of silver or 0.00056 ounce of gold. Whoa. That's a mighty long ways from 1913's 0.7734 and 0.0438. What happened in 1913? Oh, right, the Fed was founded. Coincidence.

Those trashy central banks are killing market activity. I reckon folks are waiting for their [existentially meaningless] announcements about interest rates. Ozzie dollar fell today on its central bank announcement it is lowering interest rates.

US dollar index has traded itself into an even-sided triangle, up against its downtrend line. Traded flat and a little down today, bounded by 79.848 and 79.479. Now down 7.3 basis points to 79.738.

Dollar index is trading into that triangle's point, so something will happen soon, up or down. My money's on Down.

Yen fell 0.26% today while the euro rose 0.26%. Euro barely poked its head into the downtrend line, and closed at $1.2919 (€0.7741) Yen barely fell through its 20 DMA (128.00c) to 127.90c (Y78.19). Quiet as a bar at 6:00 in the morning.

Stocks behaved very oddly today. Indices all closed up slightly except the Dow, which fell 32.75 (0.24%) to 13,482.36. S&P500 gained a tiny 1.26 (0.9%) to 1,445.75. Whenever markets that OUGHT to move together gainsay each other, something funny might be brewing.

Dow is bouncing along its 20 day moving average (13,445.65), piercing it today and Friday. S&P500 closed today almost on its 20 DMA (1,445.51). Significance of that is the 20 DMA's function as a trip wire and first warning of a change of direction.

Spain is still causing investors acute dyspepsia. Bail out is on again, off again, but it won't help anybody but the banks -- certainly not the Spanish economy.

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.