Thursday, January 31, 2013

The Gold Price in the Last Three Days Gained $27 and Lost $19.30 Remains in Uptrend

Gold Price Close Today : 1660.60
Change : -19.30 or -1.15%

Silver Price Close Today : 31.335
Change : -0.817 or -2.54%

Gold Silver Ratio Today : 52.995
Change : 0.747 or 1.43%

Silver Gold Ratio Today : 0.01887
Change : -0.000270 or -1.41%

Platinum Price Close Today : 1673.90
Change : -13.90 or -0.82%

Palladium Price Close Today : 745.30
Change : -5.70 or -0.76%

S&P 500 : 1,498.11
Change : -3.85 or -0.26%

Dow In GOLD$ : $172.54
Change : $ 7.50 or 4.54%

Dow in GOLD oz : 8.347
Change : 0.363 or 4.54%

Dow in SILVER oz : 442.34
Change : 9.69 or 2.24%

Dow Industrial : 13,860.58
Change : -49.84 or -0.36%

US Dollar Index : 79.20
Change : -0.057 or -0.07%

The GOLD PRICE lost $19.30 today and closed at $1,660.60. Silver did no better, down 81.7 cents to 3133.5.

Both 5 day charts look the same, and the look is an Island Reversal top. Gold gapped from about $1,666 to $1672 yesterday, then traded sideways between 1675 and 1682. Today it gapped down about $1,679, and never settled till it hit $1,659.33. But if it's that week, why did it stop slap on Tuesday's close? Why not fall further?

The SILVER PRICE chart is the same, save with different numbers. Gapped up yesterday from 3140c to over 3200c, traded sideways in a tight range, then fell off at 3180c today down to 3126 and ended at 3133.5c.

How will we know whether that is an island reversal in truth? Both will fall tomorrow hard. If instead the trade up into the range where they gapped down today, then it's not.

Looking at a 5 day chart twists your perspective. You might get an early warning signal there, but you have to factor that into the perspective of a longer term chart.

In the last three days, silver gained 139.6 cents, then lost back 81.7 today for a net gain of 57.9 cents. Gold gained $27, lost $19.30 today, for a net rise of $7.70.

Now back off further. Since mid December silver and gold have built even-sided triangles working further and further into the point. Only the spike low on 4 January violates that triangle, and that was a false breakout that never followed through. Trend for both since 4 January has been, and remains, up.

Today in particular the GOLD PRICE closed below its 200 DMA ($1,663.32), no cheerful sign. Yet it remains in that uptrend.

Silver remained above its 20 DMA (3123c, near the low at 3126c where lots of buyers were hiding) and above its 300 DMA (3113c).

I know this roller coaster ride up one day and down the next wears out your stomach and maybe has you, too, reaching for your wastebasket. That's precisely why I don't trade futures or on margin. From the perspective of a BULL market and 100% paid for silver and gold, I can watch those declines with a lot more aplomb than when it's margined and everything I own and my wife and children are on the line. I like to sleep at night.

Perspective: It makes all the difference in the world. If you're an ant looking up at an elephant, you have no idea what that colossus is. Likewise, an elephant can't tell much about an ant without a magnifying glass. I'll explain presently.

Looky there! Stocks were wallowing in a deep swamp today. Spent most of the day underwater and fighting gravity. Dow lost 49.84 (0.36%) to 13,860.58. S&P500 swam alongside, losing 3.85 (0.26%) to fall below 1,500 and rest at 1,498.11.

Both of 'em are still as oversold as the efficiency of Government Sponsored Enterprises or the statecraft of Bernard O'Bama. There's a lot of air beneath that ledge stocks are standing on. They could fall to 13,625 without even damaging the chart too much. Don't count on aubstantially higher stock prices soon.

Yep, I'm still wearing out my eyeballs staring at the Dow in Gold chart. Last six days it has formed what I must call an Island Reversal Top, unless it gainsays that somehow. Similar but not selfsame pattern shows on the Dow in Silver chart. Those charts argue stocks have run out of gas against metals.

Only thing worse than having to work as an usher at the ballet is watching these rotten fiat currencies. Pure torture. US dollar index has fallen plumb against the bottom boundary of its trading channel, and now must rally or fall through that trap door and slide. Stepping back, the Dollar index has been trending down since its July high at 84.10. Today it lost another 5.7 basis points (0.7%) to wind up at 79.204. Here's more perspective for y'all: dollar index peaked in June 2001 at 121.21, so holding them green yankee dollars has cost you 35% of your purchasing power since then. Yeah, buddy, that dollar and them bonds and CDs are a going Jessie!

What of the other scrofulous fiat currencies today? Euro keeps on rising. Gained another 0.1% today and closed at $1.3578. If it clears this area, it's liable to run for $1.4000, where it will be even more sharply, preposterously overvalued than it is now.

Yen made a new low close, down another 0.5% to 109.26 cents/Y100. Nice Government Men in the ECB must be puking in their wastebaskets every time they look at that Euro/Yen chart. They've been snaked by the Japanese in the currency war.

On 31 January 1861 the Republic of Louisiana seized the US Mint at New Orleans.

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

- Franklin Sanders, The Moneychanger
10:00am-5:00pm CST, Monday-Friday

© 2013, 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.