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Wednesday, January 23, 2013

The Gold Price Fell $6.60 Today Why is Silver Outperforming Gold?

Gold Price Close Today : 1686.30
Change : -6.50 or -0.38%

Silver Price Close Today : 32.409
Change : 0.262 or 0.82%

Gold Silver Ratio Today : 52.032
Change : -0.626 or -1.19%

Silver Gold Ratio Today : 0.01922
Change : 0.000229 or 1.20%

Platinum Price Close Today : 1691.70
Change : -6.70 or -0.39%

Palladium Price Close Today : 725.45
Change : -3.70 or -0.51%

S&P 500 : 1,494.81
Change : 2.25 or 0.15%

Dow In GOLD$ : $168.92
Change : $ 7.50 or 4.65%

Dow in GOLD oz : 8.171
Change : 0.363 or 4.65%

Dow in SILVER oz : 425.17
Change : -1.38 or -0.32%

Dow Industrial : 13,779.33
Change : 67.12 or 0.49%

US Dollar Index : 79.88
Change : -0.144 or -0.18%

Again today the silver price outran the GOLD PRICE, adding 26.2 cents (0.82%) to 3240.9c while gold lost $6.50 (0.38%) to 1,686.30.

Question you have to keep asking yourself is, Why does silver keep on outperforming gold? Yes, indeed, why? I wish I knew. At least it confirms what I am seeing in the physical market, where 90% silver coin has soared.

Once again, eye-catching, strange doings in gold and silver today, odd moves stirred by phantoms. World was rocking along just fine with gold knocking on $1,695, it's high. Eased off to $1,692 right at 10:00 then a safe fell from the sky on its head. In 15 minutes it had gapped down to $1,683, and traded sideways and punch drunk the rest of the day, dipping as low as $1,683.80.

The GOLD PRICE hit its 50 DMA at 1693.85, but no big reason that ought to have occasioned such a sudden drop. Today's fall took gold back to the uptrend line from its $1,626 low on 4 January, so no real damage was done. I expect it will rise again tomorrow, for another knock on that $1,695 door. Gold's doing fine as long as it doesn't close below $1,663.97, its 200 DMA and where the uptrend from the June '12 low now rests.

The SILVER PRICE improved yesterday's breach of the downtrend from the 3449c November high, but has risen for the last eight (8) days running. That performance is hard to maintain, and makes me sweat a little, wondering if silver doesn't need a few days moving sideways or lower to rest. High at 3243.5c nearly reached the 3250c resistance.

Whatever hit gold today hit silver as well, but silver only dropped 15c -- a gappy drop -- from 3235c to 3220c, the day's low. From there it easily recovered.

It may be nothing more than the natural born fool speaking, but silver just feels very strong. Tomorrow will solve the mystery or prove me once again a fool.

Even if silver and gold see a few days' correction here, the bottom was posted 4 January and there's not much risk in buying here.

An old poker rule says, "Never draw to an inside straight." That means, never bet that the smallest odds will turn out in your favor, or, always take the main chance.

Stocks, both the Dow and the S&P500, have reached a Relative Strength Index (RSI) over 70. In that territory, a market is very much overbought, and the next big move will be down. Trouble is, markets can stay overbought or oversold sometimes longer than people have money. But that and an MACD in the stratosphere, and trading at the top of the Bollinger Bands all prophesy some correction in stocks' future, soon.

Some indices rose today, some fell -- indecision? Exhaustion? Dow gained 67.12 (0.49%) to 13,779.33 but the S&P500 did no more than add 2.25 (0.15%) to 1,494.81.

Dow in Gold keeps flirting with a top, while the Dow in Silver has dead broken down, trading the last two days below its 200 day moving average. Not impossible, but hard to picture that stocks will advance much more against gold. I would still sell stocks and put the proceeds into gold.

Looky there! That US dollar index has itself a little-old uptrend going. 'Tain't much, but it is a series of higher lows. Course, there are lower highs, too, so it's moving into an even-sided triangle that will eventually break up or down.

Dollar index today gained 6.5 scanty points (0.08%) -- Hey! somebody hold a mirror under its nostrils to see if it fogs up! I think that thing may be dead -- to close at 79.937. Top of the trading range is 80.20, 20 day moving average at 79.91, so maybe twill head higher. Watching currencies is like watching a flea circus: most of what's happening is only your imagination.

After the politicians jawboned the yen down from 126.43 in November to 110.96 four days ago, the BOJ head has jawboned it back up to 112.75 cents/Y100 today, up 0.03%. That's probably as low as the yen will stoop this trip.

Euro closed unchanged today at $1.3319. Big roadblock above is $1.3400.

US$1=Y88.69=E0.7508=0.030 856 oz Ag=0.000 593 oz Au.

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

- Franklin Sanders, The Moneychanger
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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.