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Tuesday, December 04, 2012

The Gold Price May Fall to it's 150 Day Moving Average but Remains in it's Primary Uptrend

Gold Price Close Today : 1694.40
Change : -25.20 or -1.47%

Silver Price Close Today : 32.734
Change : -0.947 or -2.81%

Gold Silver Ratio Today : 51.763
Change : 0.707 or 1.39%

Silver Gold Ratio Today : 0.01932
Change : -0.000268 or -1.37%

Platinum Price Close Today : 1581.40
Change : -30.90 or -1.92%

Palladium Price Close Today : 681.10
Change : -8.35 or -1.21%

S&P 500 : 1,407.05
Change : -2.41 or -0.17%

Dow In GOLD$ : $158.01
Change : $ 2.17 or 1.39%

Dow in GOLD oz : 7.644
Change : 0.105 or 1.39%

Dow in SILVER oz : 395.67
Change : 10.71 or 2.78%

Dow Industrial : 12,951.78
Change : -13.82 or -0.11%

US Dollar Index : 79.67
Change : -0.322 or -0.40%

Woe, Woe, smarting day for the silver and GOLD PRICE. Not much else prospered, either.

Today the GOLD PRICE tumbled $25.20 (1.5%) to $1,694.40 at the Comex close. Silver lost 94.7 cents (2.81%) to end Comex at 3273.4c.

Here's how gold's day played out. Overnight it dropped to $1,700 but climbed back above $1,705. Come New York open and the selling began, driving gold down to $1,693 by 9:30. It gapped up, failed to breach $1,700, then traded mostly sideways until about 5:30 Eastern time when for about 30 minutes it traded back and forth between $1,688 and $1,698. Now it has levelled off to about $1,698.

It's conceivable gold might stop here, but since it broke that neckline support, not likely. Momentum points down, as gold is floating below its 50 day moving average ($1,736.41) and its 20 DMA (1,725.68).

Logical stopping points are the clustered 200 (at $1,665.40) and 150 ($1,661.78) DMAs, just a bit below the last low at $1,672.50. Below those is the uptrend line from the June low today about $1,640.

Other half of my mind is screaming, "Whipsaw!" Just about the time you switch position, market turns on a dime and runs the other way. Here's another eyecatcher: draw a line under the end- September low at $1,674.10, November low at $1,672.50, and it strikes today's market about $1,680. Naaa, unlikely. If this is the last leg down, most likely is that it exceeds the November low and touches that 150 DMA. Of course, it could whipsaw back the other way, but would have to rise above $1,725 resistance (also the 20 DMA) to evidence that.

Nothing to do but stand aside and wait. However, I would buy some at $1,662 and more at $1,640.

The SILVER PRICE punctured 3320c about 1 a.m. Eastern time, but traded up over 3340c, vacillating between there and 3320c until about 7:30. Selling began then that took silver below 3320c to 3280c by 8:30. By 9:30 silver had found its nerve again and bounced up to 3310. Failing to hold on, it hit its 3267c low about 1:30, then climbed above 3280c to trade between there and 3300c the rest of the day. Odd, how silver's low and gold's both came in about Comex closing time. Looks like a little Sherwin- Williams to spruce up that old tape.

Silver has divers safety nets below. There's that old neckline support at 3200c, then the 300 DMA at 3129c, just above the 200 DMA at 3098c. If all those give way, the uptrend line from June comes in about 3000 - 3050c.

So where are gold and silver? UNLESS they catch in the next couple of days and reverse upward, I misjudged the end of the correction and called it too soon. However, this doesn’t change my interpretation of events since August. The August rally took both metals through their downtrend lines from the 2011 highs, effectively ending the corrections following those highs. We saw the first little upleg-let of that rally that topped in September. Now it appears this last leg down of that post September correction must travel a bit further down to find its feet. Mean time, we watch, Oh, and buy a little more silver at 3200c and 3150c, and 3050c.

Don't ever let these short-term flip-flops blind you to the big picture: silver and gold remain in a PRIMARY UPTREND, a 15 - 20 year trip that has another 5 - 10 years to run. Best strategy is never to trade in and out, whipsawing yourself and emptying your own pockets, but to climb aboard that bull and ride, and never let him shake you off.

US DOLLAR INDEX, having signalled its mind to move lower yesterday, consummated that threat by losing 32.2 basis points (0.41%) slicing clean through an old support line. Next support lies about 78.80, but when the dollar slices that, blood will gush the sharks will gather, and the mayhem will become general. Better shuck those dollars for something with more staying power -- and I DON'T mean Yen or Euros, or stocks.

Euro is waving a flag, blue I reckon, poking through that short term downtrend line. All set up to run higher, and could reach 134.50 before the next inevitable crisis sucks the wind out of its sails. Rose 0.29% today to $1.3093.

Yen jumped 0.34% to 122.03c/Y100. It's gappy up and down, a wretched chart. However, while candidate Abe is talking it down, the US dollar is lifting it up. No good thing awaiteth the yen.

US$1=Y81.95=E0.7638=0.030 549 oz Ag = 0.000 590 oz Au.

Since Thursday last stocks have been unable to climb, blocked about 13,050. Dow held the loss to 13.82 (0.11%) today, closing at 12,951.78. Dow lost 2.41 (0.17%) to 1,407.05.

I reckon stocks are hard pressed to make any headway against the storm of selling that Obama's threatened tax increase has sparked, like hitting a mule with a cattle prod. Everybody wants to take profits this year before they have to pay twice as much tax next year.

My, my! This soak the rich scheme, it is sure enough one brilliant program, ain't it?

If I hear the inanity "fiscal cliff" one more time, I am going to tap the speaker between the eyes with a ball peen hammer. I've seen soap operas that made more sense and were more believable. These people aren't responsible enough to make decent snake-oil salesmen. Listen! It would take a statesman of the stature of Washington or Jackson or Jefferson Davis to solve the mess in Washington, and today in America men like that are rarer than passenger pigeons.

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.