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Thursday, February 14, 2013

The Gold Price Closed Down Needs to Close Above $1,705 and Silver Above 32.5 Cents

Gold Price Close Today : 1,634.70
Gold Price Close 8-Feb-13 : 1,666.00
Change : -31.30 or -1.9%

Silver Price Close Today : 30.343
Silver Price Close 8-Feb-13 : 31.425
Change : -108.20 or -3.4%

Gold Silver Ratio Today : 53.874
Gold Silver Ratio 8-Feb-13 : 53.015
Change : 0.86 or 1.6%

Silver Gold Ratio : 0.01856
Silver Gold Ratio 8-Feb-13 : 0.01886
Change : -0.00030 or -1.6%

Dow in Gold Dollars : $ 176.70
Dow in Gold Dollars 8-Feb-13 : $ 173.63
Change : $3.08 or 1.8%

Dow in Gold Ounces : 8.548
Dow in Gold Ounces 8-Feb-13 : 8.399
Change : 0.15 or 1.8%

Dow in Silver Ounces : 460.51
Dow in Silver Ounces 8-Feb-13 : 445.28
Change : 15.23 or 3.4%

Dow Industrial : 13,973.39
Dow Industrial 8-Feb-13 : 13,992.97
Change : -19.58 or -0.1%

S&P 500 : 1,521.38
S&P 500 8-Feb-13 : 1,517.93
Change : 3.45 or 0.2%

US Dollar Index : 80.394
US Dollar Index 8-Feb-13 : 80.263
Change : 0.131 or 0.2%

Platinum Price Close Today : 1,709.80
Platinum Price Close 8-Feb-13 : 1,713.50
Change : -3.70 or -0.2%

Palladium Price Close Today : 763.65
Palladium Price Close 8-Feb-13 : 751.10
Change : 12.55 or 1.7%

Today the GOLD PRICE fell $9.50 to $1,634.70 and silver ran right along, losing 51.1 cents to close at 3034.3c.

These are not gigantic breakdowns, but with the last few days' breakdowns through support they force us to question how far they might fall. They will run into the downtrend lines from the 2011 highs at 2800c and $1,595. Fall through those points and it's back to last year's lows at 2610c and $1,525.

Those targets are by no means given. Next week after the Chinese holiday the Chinese will return to the market, buying, and who knows what rotten egg, positive or negative, the G20 chickens might lay. Some support for the GOLD PRICE exists also around $1,630 and for silver between 2975c and 3000c. Might stop there.

Up above the gold and SILVER PRICE will not trounce the bears until they close over $1,705 and 3250c.

Bottom line is, hold fast, don't panic. Keep your eyes on the primary trend and the horizon, and you'll ride out the worst storms with silver and gold.

Silver and gold, contrary to what the chart screamed in August and September, and even through most of this correction, have not yet made good on the rally promised by their August breakout through the downtrend line from the 2011 highs. Today because markets fear some statement (don't even say "action") from the toothless G20 discouraging currency wars, short term traders are selling silver and gold, buying dollars and yen, selling euros, and shunning stocks.

Listen, I'm used to people calling me "fool" and "stupid," so it doesn't much bother me. I've been doing this too long. I've learned not to tote up scores too early. I was there in October and November 2008 when from March highs gold lost 30% and silver lost 105% [sic] of its preceding rise, puking in my wastebasket every morning. Tales of great cliffs for gold and silver just past Sunday don't panic me, since I am not selling now anyhow. And if they drop, so much the better, because I'll buy some more cheaper. I was also there at the 2011 peaks, when silver reached 6 times its 2008 low and gold 2.7 times. Truth is the daughter of time.

And it ain't over yet. Banks are still stuffed with rotten assets, governments have reached the limit of borrowing capacity, every central bank in the world is inflating, AND THEY WILL KEEP ON DOING IT TILL THEY BUST. The cause hasn't been removed, so the effect will continue. They continue to inflate, so silver and gold will continue to rise.

I'm content to wait, and be called "wrong" for a long time.

Yet again we are treated to an exhibition of how government and central bank interference in the economy "stabilize" markets. The Gang of 20 nations are meeting this weekend. Now y'all and I and any other rational, sane person knows that like a sow wallowing in the mire, they will keep on wallowing in their Keynesianism, their stimulus programs, and most of all, inflation. Therefore, the chance of anything earth-shaking, any real change, coming out of this meeting is a little less than the chance of your winning the Power Ball Lottery and 30 seconds later being struck by a meteor. They will meet, they will swill and swallow at public expense, they will posture and issue verbose statements carefully bleached of meaning, and then they will go home to feed off their respective nations again. But the mere threat of a "government surprise party" coming out of this weekend has paralyzed some markets and sent others in odd directions as gamblers lay bets on what the Assembled Poo-Bahs and Virtually Important People might do.

So markets are skewed. I have learned, however, that markets can remain skewed and illogical longer than your pockets are deep. That's why I make no short term investments, no day trades, but rather stay with the primary trend. Unsexy and stodgy though that be, it beats panhandling after losing all your money in the futures market.

US dollar index rose today to 80.394, up 32.3 basis points (0.42%), probably because it's viewed as the safest bet before the Gang of 20 meeting. Euro fell to $1.3356 (0.69%), probably on the bet that a high exchange rate hurts the puking-sick European economy and therefore must be brought down. Likewise the yen rose to 107.69 (up 0.39%) most likely on the bet that the other central banks won't stand for more currency warfare from the Japanese and will require them to give back some of their gains.

The looming G20 meeting discomfited stock markets around the globe, and confused them. The S&P500 and the Russell 2000 rose while the Dow and all the Nasdaq averages fell. Other world markets fell.

S&P500 gained 1.05 (0.07%) to 1,521.38 but the Dow wouldn't keep it company. It fell 9.52 (0.07%) to 13,973.39. I very much doubt the stocks' rally has ended, and expect a wild rise before it does. Likely that rally will end as March expires, but it might stretch out a little longer. Might reach 15,000 amidst government, central bank, and media announcements of a "New Era." It won't be.

Dow measured in silver and Dow in Gold have both broken out upside and probably will rise another 6% or so at least.

I am sending this weekly report today because my wife is kidnapping me tomorrow and taking me to New Orleans. She's making me go. Really. So I won't be sending a commentary today or Monday, but I'll think about y'all when I'm sitting in Felix's in front of my second dozen oysters.

Today is Valentine's Day. If you haven't already bought your wife some sweet present, you'd better go find one right now.

On 14 February 1859 the Great State of Oregon was admitted to the Union. The Oregon coat of arms shows a man NOT pumping his own gas over the motto, "We never met a rule we didn't like." I love Oregon and you can live a gourmet's life there, but Mercy! They love those rules. I nearly got arrested once for chewing gum in the state aquarium. Got tailed by the security guard all the rest of my tour. I must look like "one of those people." Can y'all imagine what he might have done if I'd been dipping Skoal? If I'm lying, I'm dying. It happened.

Y'all enjoy your weekend!

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.