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Tuesday, November 27, 2012

The Silver and Gold Price are Still Offering a Rare Opportunity to Buy at Low Risk

Gold Price Close Today : 1742.30
Change : -7.30 or -0.42%

Silver Price Close Today : 33.98
Change : -0.16  or 0.46%

Gold Silver Ratio Today : 51.27
Change : 0.02 or 0.04%

The silver & GOLD PRICE spent another day digesting Friday's gains. Gold backed off $7.30 to $1,742.30 and silver gave back 15.6 cents to 3398.1c.

Filter out the noise: for the GOLD PRICE that amounted to nothing more than touching back to the 50 DMA ($1,741.96). Low at $1,739.86 handily defended that $1,740 support. For the SILVER PRICE, it was merely a touchback to support, with a low at 3389c.

Here's a Tennessee fool's guess: next little move will be stout, probably taping on 3550c for silver & $1,800 for gold. But what do I know? I spend all my nights huntin' possum & days sitting on the front porch. Won't be able to do that much longer. Armadillos are replacing the possums, & not even a buzzard will eat an armadillo & a dog won't track one.

Back to the point: today made no change to the technical outlook for the SILVER & GOLD PRICE. Gold needs to remain above $1,738 and silver above 3389c. And of course, they ought to keep steadily advancing.

I still believe this breakout offers a rare opportunity to buy silver & gold at low risk.

Watching markets is liable to make you feel bi-polar: one day king, next day pauper. That's why it's so important to filter the noise out of the symphony playing underneath.

Today the scrofulous US dollar index rose 21.8 basis points (0.28%) to 80.346. Filter out the noise, & you'll see it doesn't amount to a hill of beans.

Dollar index bounced today after careening through its 200 (80.76) and 20 (80.67) day moving averages on Friday. It hit the 50 DMA, 80.03, & today bounced. Even a flat basketball will bounce a little, but that ain't buoyancy.

The theme playing beneath this began 7 days ago when the Dollar hit 81.46, then failed, and hath failed ever since. Can't repair that. Headed for 78.60 & lower. Oh, the Nice Government Men may slow it down, even engineer a tiny rally-ette or two to shake off, confuse, and demoralize the short sellers, but down it will go, or axheads start floating.

A reader in the UK asked me about the British Pound, but I am loath to deliver such bad news: y'all a pretty much sunk. I don't keep up with British economic statistics, but what I read puts your situation somewhat lower than Europe's & somewhat higher than Japan's. Don't brag, the zloty's status is higher than Japan's, too.

Looking at a two year four month chart plainly shows the Nice Government men managing the pound sterling in a range from $1.63 on the top to $1.525 on the bottom. Yes, it poked its head above that line in 2011, only to be soundly slapped back. In October it (nearly) hit $1.63 again, but has since dived for the ocean depths to close today at $1.6026.

The pound has formed an even sided triangle, & once it punctures that bottom boundary, today about $1.59, it will sink toward $1,53 again. Nothing encouraging in that chart. If I were y'all in the UK, I'd be swapping paper pounds for silver & gold so fast the onlookers would think I was a threshing mill about to blow up.

Of course, I would be doing the same with yen, euros, or US dollars, so don't take it personal, you folks in Great Britain. They're doing it to all of us.

By the way, silver & gold look ready to turn up strongly against the pound sterling.

Yen closed at 121.78 cents/Y100, like a barbell dropped off the Queen Mary looking for the bottom. Euro fell 0.35% to $1.2945. Might be headed higher against the US dollar, but not confirmed yet.

US$1=Y82.12=E0.7725=0.029428 oz Au = 0.000574 oz Au.

Stocks worked hard at disappointing their partisans again today,. Dow lost 89.24 (0.69%) to 12,878.13. S&P500 followed right along, losing 7,.35 (0.52%) to 1,398.94.

No wonder, as stocks have run plumb up against the steep downtrend line their fall since early October hath drawn. They also bumped their noggin against the 200 DMA (12,993.03). Even if they punch through, they will hit strong resistance 13,300.

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.