Wednesday, November 14, 2012

The Gold Price Continues to Move Higher with $1,740 as it's Next Hurdle

Gold Price Close Today : 1729.50
Change : 5.30 or 0.31%

Silver Price Close Today : 32.871
Change : 0.393 or 1.21%

Gold Silver Ratio Today : 52.615
Change : -0.473 or -0.89%

Silver Gold Ratio Today : 0.01901
Change : 0.000170 or 0.90%

Platinum Price Close Today : 1588.60
Change : 5.20 or 0.33%

Palladium Price Close Today : 640.75
Change : 4.95 or 0.78%

S&P 500 : 1,355.49
Change : 19.04 or 1.42%

Dow In GOLD$ : $150.25
Change : $ 21.80 or 16.97%

Dow in GOLD oz : 7.269
Change : 1.054 or 16.97%

Dow in SILVER oz : 382.43
Change : 52.50 or 15.91%

Dow Industrial : 12,570.95
Change : 1,855.23 or 17.31%

US Dollar Index : 80.93
Change : -0.179 or -0.22%

The GOLD PRICE gained $5.30 to $1,729.50, while silver gained 39.3 cents today to 3287.1 cents.

The GOLD PRICE preserved yesterday's spike bottom or upside-down head and shoulders by not violating the neckline. Low came a little higher than yesterday's $1,717.80 at $1,720.81. Solid support there. Gold reached a little higher today, to $1,733.29. 'Twas a day of consolidation, that's all. $1,740 looms as gold's next hurdle.

Now that five day silver chart looks much stouter. The SILVER PRICE fell no lower than 3234c today, and flew as high as 3291, closing near the high. Silver remains comfortably above its 20 DMA (3209c) and is stretching out its hands toward the 50 DMA (3329). Barrier standing before silver is 3300c. Once silver overcomes that it can concentrate on 3550c again.

The silver and GOLD PRICE both continue to confirm their November 2 lows and affirm their aim to move much higher.

Another indicator that silver aims to move higher is the premium on US 90% silver coin, which continues to rise. I associate that with past similar rises that usually presage higher silver prices. Also, the gold American Eagle premiums has risen a bit, but this is due alone to the same tiresome year-end drama we see every year. The US mint, that wondrous socialist enterprise, ceases producing current year American Eagles and begins minting next year's date in December. That shortens supply a bit, and dealers and collectors, who appear to have the same memory span as a gnat, forget the same thing happened last year and grow frantic for Eagles, both this and next year's. By February when the mint begins delivering, all those premiums settle back to usual.

Let me go on record now by forecasting that the "fiscal cliff," mentioned 2,000 or 3,000 times a day right now in the news, will prove no more catastrophic than a speed breaker. Not because America has any statesman bold enough to address the underlying issues (fiat money and a government-spending dependent economy), but because all those rabbity Congressional cowards will merely cobble up some six or twelve month patch to delay the inevitable -- until they are out of office. European Union shirkers have been dancing this same lily-livered waltz for several years. Of course, it won't work forever, but show me a politician with a time horizon longer than 5:00 p.m. and I'll show you a creature rarer than a passenger pigeon.

The Germans have a word: Schadenfreude or "shame-joy." That describes the feeling someone has when he gloats over an evil that happens to another.

I hasten to add that I find no joy in reporting painful events, like huge drops in the stock market, even as rotten as the system is. In fact, it pains me to ponder how much more pain lies in the future, not merely for the stock markets, but for the abused US economy while that dying power class, central bankers, struggle to hold on to power.

Today's currencies: US$1=Y80.24=E0.7851= 0.0304 silver oz = 0.0058 gold ounce.

OWCH! The Yen gapped down today with a massive 1.01% loss. Ended at 124.63 cents/Y100. Today it fell about 2/3 of the way to its last low at 123.97.

With rioting in Spain, Italy, and Greece, the euro still managed to rise on news that Greece will not be repo'ed this Friday. It was up 0.27% to $1.2737. It didn't jump much, and only managed to touch the downtrend line above. Remains below all moving averages, including the crucial 62 DMA. Sick, sick, and looking at $1.2000.

US dollar index is now trading at 81.122, up an inconsequential 0.009. Dollar had a wearing day with a spike low to 80.90. May be rolling over for a few day's correction. If not, twill clear 81.25 tomorrow.

Stocks hurt almost too much to talk about. Dow lost a colossal 185.23 (1.45%) to 12,570.95 and S&P500 lost 19.04 (1.97% to 1,355.49.

This tumble came not with a great cliff-plunge, but rolled steadily downhill all day like a snowball gaining momentum. I keep thinking, "This looks like the last downleg of this move," and stocks keep beating even my low expectations If they break through this level the next support comes at the June low, way down there at 12,035.

The Dow in Gold Dollars has simply collapsed, straight down with hardly a pause. Today landed at G$150.25 (7.269 oz). Has now broken down past the bottom of that diamond topping formation sketched out from February through August. That is the final confirmation of a breakdown. Ultimate target for this move is BELOW G$117.62 (5.69 oz), the August 2011 low.

Miss not this message: stocks will weaken against gold for a long time.

Against silver today stocks lost over 52 ounces, falling to 382 ounces, a new low for the move. Message is the same: stocks will weaken against silver for a long time. (I caught myself wanting to say "weaken strongly." Should it be "weaken weakly"?)

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.