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Thursday, December 13, 2012

The Gold Price Broke it's $1,705 Support and Fell $21 Closing at $1,695.60

Gold Price Close Today : 1695.60
Change : -21.00 or -1.22%

Silver Price Close Today : 32.280
Change : -1.427 or -4.23%

Gold Silver Ratio Today : 52.528
Change : 1.601 or 3.14%

Silver Gold Ratio Today : 0.01904
Change : -0.000598 or -3.05%

Platinum Price Close Today : 1611.90
Change : -33.00 or -2.01%

Palladium Price Close Today : 690.25
Change : -9.40 or -1.34%

S&P 500 : 1,419.45
Change : 9.03 or 0.64%

Dow In GOLD$ : $160.57
Change : $ 2.88 or 1.83%

Dow in GOLD oz : 7.768
Change : 0.139 or 1.83%

Dow in SILVER oz : 408.01
Change : 19.49 or 5.02%

Dow Industrial : 13,170.72
Change : 74.73 or 0.57%

US Dollar Index : 79.92
Change : 0.026 or 0.03%

The GOLD PRICE broke $1,705 late yesterday supposedly on Bernanke's statements about the fiscal cliff. (He's against it.) By 9:30 a.m. it had fallen to $1,689.50. It rebounded to $1,701.90, then fell below $1,700 again and spent the rest of the day hanging out at $1,695.60.

Yesterday the GOLD PRICE touched the downtrend line from the late November high, then reversed vigorously today, gravity-ward. Support stands at the last two lows, today about $1,687.50, about where today's $1,689.50 low struck.

What's possible? Gold might hold that line. You'll know that tomorrow. If it doesn't, then the 150 and 200 DMAs stand beneath to catch it at $1,666 or $1,663.56. Beyond that the uptrend line form the June 2012 low stands about $1,650 today.

A couple of other things I want to mention is the Dow in gold, that's one weird rascal, hugging that uptrend line so tightly since mid-November, and hitting the 200 DMA from below today, and a long term (since mid-2007) downtrend line. Either stocks are getting to rally hard against gold by breaking through that point, or they are about to fall back hard. Since the long term trend is down, odds favor fall back hard.

Both platinum and palladium have been trending upward since end-October. Platinum took a $33 hit today, but it didn't harm the chart. Palladium 4 days ago hit 706, its September high, and fell back but remains in an uptrend. Today might have marked a breakdown.

If you're one of those folks who frets over the uncertainty that governments and central banks inevitably inject into your life, I suggest you move where there isn't either one. Whoops -- sorry. They've crowded all the intelligent life off the planet. You'll have to move to Mars to escape them.

Today, a distinctly attractive possibility.

It appears that the SILVER PRICE and GOLD PRICE are on their way to lower lows before this correction ends. Be patient, be patient. The bull market will raise silver and gold to higher aand higher prices. Keep your eyes on the horizon and off the goofs in Washington. Pay 'em no mind. Eventually they'll get tired and go away.

Something happened today, but who knows why. After Bernanke announced the Fed would add $1.02 trillion to the dollar supply last year, instead of tanking today the dollar actually gained 2.6 basis points. And the inflation-happy stock market turned sad instead. And just in case you are one of those Pollyannas who believe that central banks and governments have got it all figured out and we're "coming out of the woods," Gretel, the top 5 central banks (less Japan, but they're coming shortly) announced today simultaneously that the Fed would extend to 1 February 2014 its swap line to the other central banks, a swap line the Fed used to loan $585 billion (half a trillion, give a billion or so) to foreign central banks so they could keep their own banks afloat on the Global Sea of Liquidity. Think of it as Homeland Security buying up 30 million rounds of ammo. What do they know we don't know?

US Dollar index yesterday made a low about 79.70, so it needs to hold on there to keep from falling further. Up above 80 offers a solid barrier.

Euro barely rose today, up 0.05% to $1.3078. Can't muster the strength to push through that downtrend line, although it stands above all its moving averages. However, it's in an uptrend, so odds favor a breakout.

The Yen fell off a cliff again today, down 0.49% to 119.61 cents/Y100. Yen must be nearing the point at which the rest of the world's Nice Government Men swing into action. Can't imagine them letting the yen drop below 117.64 cents (=Y85 to the dollar).

Things just got gloomier and gloomier for stocks as the day wore on. Markets just adore uncertainty, and O'Bama and his dance partner Boehner are keeping the world as uncertain as they possibly can. Dow lost 0.56% (74.73) to 13,170.72 while the S&P500 gave back 9.03 (0.63%) to 1,419.45.

This amounts to the Dow being turned back at 13,300 resistance (yesterday's high was 13,329.44). Probably plenty more upside here, but for now the market just can't deal with the schizophrenia pouring out of Washington.

Gold today fell a meaty $21 (1.22%) through $1,705 to close Comex at $1,695.60. Silver lost a heart-stopping 4.23% (142.7 cents) and ended at 3228, smashing 3350c and 3300c support, and even cutting through support that had cradled it since early November.

Fake-out break-outs occur when a market breaks out of a pattern one way, then immediately wheels on its heel and reverses. That's what silver did yesterday, breaking out of a little even- sided triangle toward the upside, then falling down through it to break out on the downside today. Along the way it made a new low for the move at 3228c.

If markets behaved perfectly predictably, it wouldn't be fun.

Only target left is the 200 and 300 day moving averages, nested now at 3090c and 3135c. Beneath that lies the uptrend line from the June 2012 low around 2900c. Silver may fall much further, or it may simply torture us by zigging and zagging back and forth until year end.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
1-888-218-9226
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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.