Wednesday, November 28, 2012

The Gold Price May Close Lower Tomorrow but Huge Buying Interest Lurks Around $1,705

Gold Price Close Today : 1716.50
Change : -25.80 or -1.48%

Silver Price Close Today : 33.684
Change : -0.297 or -0.87%

Gold Silver Ratio Today : 50.959
Change : -0.314 or -0.61%

Silver Gold Ratio Today : 0.01962
Change : 0.000120 or 0.62%

Platinum Price Close Today : 1610.10
Change : -7.90 or -0.49%

Palladium Price Close Today : 673.15
Change : -4.95 or -0.73%

S&P 500 : 1,409.93
Change : 10.99 or 0.79%

Dow In GOLD$ : $156.38
Change : $ 3.60 or 2.36%

Dow in GOLD oz : 7.565
Change : 0.174 or 2.36%

Dow in SILVER oz : 385.50
Change : 6.52 or 1.72%

Dow Industrial : 12,985.11
Change : 106.98 or 0.83%

US Dollar Index : 80.26
Change : -0.093 or -0.12%

The GOLD PRICE got hit over the head with a baseball bat just about exactly when the New York market opened this morning, plunging in seconds from $1,735 to $1,705.88 by 9:30. Then it began to climb, reached as high as $1,722, and traded the rest of the day above $1,715. Closed down $25.80 at $1,716.50.

Filter out the noise. On the 4 month chart the GOLD PRICE merely fell back to the neckline of that upside-down head and shoulders. Yep, it fell through its 50 DMA (1,740.90) and the 20 DMA ($1,722.51).

Two outcomes are possible: lower or higher.

If lower, gold will breach $1,705 tomorrow and trade toward $1,670. If this marks gold finishing the correction begun in October, it could fall all the way to $1,640, where the rising uptrend line from the June low awaits.

If higher, then gold may piddle tomorrow, perhaps climb above $1,720, licking today's wounds. Any close above $1,726 points it upward, but this shame will only be fully removed by a close above that $1,740.90 fifty-day moving average.

The market will tell you which route it prefers tomorrow.

Same forces that attacked gold today as the market opened assaulted the SILVER PRICE as well, driving it from 3380c to 3291 by 9:30 a.m. Yet silver came back sharply and reached 3365 by 12:45, then traded sideways above 3360c the rest of the day. Silver lost 29.7 cents to close Comex at 3368.4c, down only 0.87% to gold's 1.48% loss. Ratio showed silver's relative strength by closing at 50.959, down from yesterday by 0.61%.

The SILVER PRICE four month chart looks right different to gold's, mostly because it stands so far above the neckline of that upside-down head and shoulders. Silver did prick its 50 DMA (3319c) but closed way above that.

Once again, two outcomes are possible. If lower, silver will trade through the neckline (now about 3200c) and trade to the uptrend line from the June l02, now about 3025c. Before that comes the 300 DMA (3128c) and the 200 DMA (3098c) either of which might prove to be silver's safety net.

If higher, silver ought to turn tomorrow and not trade below 3290 and closing at least above the 50 DMA (3319c). Best of all would be a close -- soon, if not tomorrow --above the last intraday high at 3428c.

Market is going to tell you tomorrow, and that right early, I suspect. Maybe silver and gold can move lower, but a huge buying interest lurks around $1,705 and 3300c.

Right about the time you think you are pretty smart had have this market thing pert nigh figured out, markets slap you winded to remind you how priceless humility is.

US dollar index lost 9.7 basis points today to 80.252, so that did not occasion the drop in silver and gold. It's flat today, but headed to the bowels of the earth.

Euro rose 0.11% to $1.2958, but merely continues to dance over and around its 50 DMA ($1.2913) and 62 DMA ($1.2879). News out of Europe reported today that EU regulators approved E37 bn (US$47.9bn) for Spanish banks. Top 4 have a credit portfolio equal to 40% of Spain's GDP. EU approved E100 bn last June, but this is the first dose they've released.

Spit in the wind, but the markets suck it up as if it were angels riding to the rescue on chariots of fire.

Yen today rose 0.08% to 121.85c/Y100. Has risen enough to close the gap left behind on its plunge. Can it continue to advance? Like betting on a one-legged rooster at a cockfight.

Believe it or not, stocks rose 106.98 (0.83%) to Dow 12,985.11 and 10.99 (0.79% to S&P500 1,409.93, and they STILL couldn't break through the downtrend line from October. I expect they will, though, and rally further between now and year end, but it's a doomed rally.

As always, the media, seeking some cause, offered the meretricious US budget talks and a rise in housing prices. In fact, stocks plunged until 10:00 a.m., and only then began to rise.

Do yourself a favor and stay away from stocks.

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.