Buy Gold and Silver How to Buy Gold How to Buy Silver Gold Commentary

Wednesday, January 30, 2013

The Silver and Gold Price Jumped Higher on News of Further Inflation Gold Up $19.10 at $1,679.90

Gold Price Close Today : 1679.90
Change : 19.10 or 1.15%

Silver Price Close Today : 32.152
Change : 0.993 or 3.19%

Gold Silver Ratio Today : 52.249
Change : -1.052 or -1.97%

Silver Gold Ratio Today : 0.01914
Change : 0.000378 or 2.01%

Platinum Price Close Today : 1687.80
Change : 10.40 or 0.62%

Palladium Price Close Today : 751.00
Change : 1.65 or 0.22%

S&P 500 : 1,501.03
Change : -6.80 or -0.45%

Dow In GOLD$ : $171.10
Change : $ 7.50 or 4.58%

Dow in GOLD oz : 8.277
Change : 0.363 or 4.58%

Dow in SILVER oz : 432.47
Change : -15.38 or -3.43%

Dow Industrial : 13,904.73
Change : -49.69 or -0.36%

US Dollar Index : 79.26
Change : -31.400 or -28.38%

The GOLD PRICE added $19.10 today to close Comex at $1,679.90, Silver rose 99.3 cents to 3215.2c.

In the last two days silver has risen 139.6c (4.5%) and the GOLD PRICE $27 (1.6%).

What jumps out at us today is the SILVER PRICE closing above its 50 day moving average (3189c). Either telepaths are working in the silver market, or news of the FOMC's announcement leaked out. Silver gapped up on the open, traded straight up, then gapped up again, and crossed 32 resistance and the 50 DMA in the bargain.

What's important about the 50 DMA? Because it has capped every move since mid-October. Only barrier left before silver is the downtrend line from the October 2012 high, tomorrow about 3245c. Last high was 3249c, so any close over 3250c tomorrow will send silver shooting for 3450c, next resistance. I can't see what will stop it, but then, I not a telepath or clairvoyant.

Gold's story is a wee bit more complicated. It didn't quite best its 50 DMA (1688.44), but shot through its 20 DMA and punched into the 150 DMA (1,681.13). One tee tiny jump tomorrow takes it through the 50 DMA, but a much bigger test faces gold: bursting through $1,700. Exactly at that resistance tomorrow awaits the downtrend line from the October 2012 high. Breaking through now will boost gold to challenge $1,725.

Every move you THINK is a breakout needs to confirm by moving further in the same direction the next day. Still, both silver and gold have built an uptrend -- higher highs and higher lows -- since 4 January.

Look for higher silver and gold prices tomorrow. Again I will say, I believe silver and gold made their post-October correction low on 4 January 2013. From here both should launch a rally that will carry gold to $2,350, maybe by end-May, that will mark only the first leg of a much longer rally.

I have to warn y'all to be careful of "We Buy Gold and Silver Shops." Today I had a customer who wanted to sell US 90%. He called one of these shops, and they offered him $14.8 times face value for what I bought for $22.802 times face value. Y'all have to check around for pricing. Some of these folks would steal the quarters off a dead man's eyes.

Yea, the Fed hath spoken, and 'tis naught but vexation, vanity, and hot air. His Munificence Ben said he will keep on buying $85 billion in securities ever month, because of "bad weather."

Nay, I joke not. The FOMC blamed the "temporary pause" in the economy (temporary since 2008) on "temporary forces," like bad weather. I couldn't make up stuff this silly if I stayed up late nights.

His Munificence said he is not backing off his inflation, so gold and silver surged higher. So did the 10 year Treasury yield. It rose a huge 0.91% to 2.006%, punching through resistance at the upper channel line. If it clears 2.4%, many more folks will begin to wonder why they are holding a losing position in US treasuries.

Of that $85 billion His Munificence plans to spend monthly monthly, he will spend $45 billion on Treasuries and another $40 bn on Mortgage Backed Securities. In other words, he's bailing out the banks still. He's making the Fed the septic tank for their sewage-grade assets. HMB also said he would keep on spending $85 bn a month if the outlook for the labor market does not improve substantially.

The Keynesian stupidity motivating HMB is like your mechanic claiming he aims to fix your automobile by taking off all four wheels, dropping the transmission, dousing it with gasoline, and throwing in a match. This will do the same for the economy.

Stocks did not like His Munificence's plans, and dropped. Dow lost 49.69 (0.38%) to 13,904.73. S&P lost 6.8 (0.45%) to 1,501.03.

Since I am only a natural born fool from Tennessee, I don't claim to know much. But I have observed that tops in the stock market are just about impossible to pinpoint, even as you watch them. 'Tis an enormous market, and just about the time you are certain it's been beat, it raises its head for one last spike up. Therefore, I am not pinpointing or predicting, only pointing out the witnesses for the prosecution

First, the Dow and the S&P500 both have pricked their overhead resistance (top jaw of the Jaws of Death), and both have peeked through the top of a fatal rising wedge. Both are in the right shoulder of a 16-year old head and shoulders. Both have traced out a broadening top ("Jaws of Death") since May 2011, and within that have formed another head and shoulders through 2012.

Call the other witnesses. The Dow in Gold gapped up four days ago, formed an island reversal, and if it gaps down again tomorrow will complete the formation. In the same time silver gapped up, gapped again to a single day top (452.10 oz), gapped down yesterday and again today, leaving that top isolated in what also partakes of Island Reversal flavor. Wait! Call those other two witnesses, the RSI and MACD that both point out a severely overbought Dow and S&P500.

But shucks -- all those witnesses may be lying.

Ben's generosity to the banks didn't help the US dollar index much. It fell , losing 31.4 basis points (0.4%) to end at 79.255. This confirms its breakdown from its short term uptrend yesterday.

Euro gapped up on that news, way over $1.3500 resistance, up 0.56% to $1.3565. That answers what it intends to do: rise.

Yep, the yen made another new low for the move today, closing down 0.4% at 109.84 cents/Y100.

US$1=Y91.04=E0.7372=0.031102 oz Ag=0.000595 oz Au.

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

- Franklin Sanders, The Moneychanger
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© 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.