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Monday, February 04, 2013

The Gold Price Rose Again Today Up $5.90 to $1,675.30

Gold Price Close Today : 1,675.30
Gold Price Close 25-Jan-13 : 1,656.40
Change : 18.90 or 1.1%

Silver Price Close Today : 3170
Silver Price Close 25-Jan-13 : 3118
Change : 52.00 or 1.7%

Gold Silver Ratio Today : 52.849
Gold Silver Ratio 25-Jan-13 : 53.124
Change : -0.28 or -0.5%

Silver Gold Ratio : 0.01892
Silver Gold Ratio 25-Jan-13 : 0.01882
Change : 0.00010 or 0.5%

Dow in Gold Dollars : $ 171.27
Dow in Gold Dollars 25-Jan-13 : $ 173.11
Change : -$1.84 or -1.1%

Dow in Gold Ounces : 8.285
Dow in Gold Ounces 25-Jan-13 : 8.374
Change : -0.09 or -1.1%

Dow in Silver Ounces : 437.86
Dow in Silver Ounces 25-Jan-13 : 444.86
Change : -7.00 or -1.6%

Dow Industrial : 13,880.08
Dow Industrial 25-Jan-13 : 13,870.75
Change : 9.33 or 0.1%

S&P 500 : 1,495.71
S&P 500 25-Jan-13 : 1,500.67
Change : -4.96 or -0.3%

US Dollar Index : 79.551
US Dollar Index 25-Jan-13 : 79.748
Change : -0.197 or -0.2%

Platinum Price Close Today : 1,696.60
Platinum Price Close 25-Jan-13 : 1,693.90
Change : 2.70 or 0.2%

Palladium Price Close Today : 757.40
Palladium Price Close 25-Jan-13 : 740.25
Change : 17.15 or 2.3%

Since I didn't send y'all a commentary on Friday, I'm sending the week's comparison today.

The GOLD PRICE rose again today, adding $5.90 to Friday's close to end the day at $1,675.30. Silver, however, after rising 60.7 cents on Friday, lost 24.2c today and closed at 3170c.

This only underscores their conflicting performance, although it's been silver outrunning gold most of the time. Gold closed January lower than it ended December ($1,669.40 against $1,674.50) -- not much, but never a good sign. The SILVER PRICE, though, closed January a buck and six bits higher, 3017.3c against 3194.2c. Arguing with each other, but silver will win.

'Tis eye-catching that although gold rose today while silver fell, the GOLD/SILVER RATIO (gold divided by silver) actually fell from 52.982 to 52.849. So the SILVER PRICE didn't fall enough, or gold didn't rise enough, to keep the ratio from falling, and a falling ratio always whispers good things into the bull's ear.

Lines for silver and gold are plainly drawn. Both, bear in mind, are building even-sided triangles, and both I expect will break out upside. the GOLD PRICE must jump over $1,705 to break free of gravity, while silver needs a close above 3200c, followed quickly by a close over 3250c.

Fifty day moving average has been keeping gold captive, and now stands at $1,684.40. Ditto for silver with a 3180c 50 DMA.

Silver and gold grow more and more attractive day by day. Yes, the investing media blackens them, yes, they are struggling, yes, investor opinion is low. Precisely a good time to buy. But if you don't think so, wait for a couple of confirmations and buy some at higher prices.

I brought my knife, fork, and napkin to work today, expecting to have to gag down some crow with meet humility and humiliation. After all, Thursday I said I expected stocks to move lower, and they obliged me by jumping up 149.21 (1.08%) to their first close since 2007 above 14,000 (14,009.79 -- S&P500 rose 1.01% to 1,513.17). "Whoa, there, put down that dinner plate and back away from that crow!" I thought when I saw that today the Dow LOST 129.71 (0.93%) to 13,880.08 while the S&P500 lost 117.46 (1.15%) to 1,495.71.

Markets are so goosey, so driven by the fad or news of the moment, that it's hard to forecast what they'll do next. Apparently on Friday, goofy as this sounds to those with an IQ greater than their refrigerator setting, the deal Congress agreed to suspend the debt ceiling until May drove that rise. Mmmm, let me think. They agreed to spend as much as they like, but in May to add that to the debt ceiling and again approve a debt ceiling. Yes, this is like raising yourself to the sky by pulling on your own bootstraps. Yes, this is unlimited spending, without even a fig leaf of illusory restraint. Yes, this is piled on top of the Federal Reserve's commitment to unlimited spending (QE du jour), along with the ECB and Bank of Japan. Yes, the yield on 10 year Treasuries is rising, which implies interest rates are rising, which economic headwind stocks must breast. Yet stocks rose, briskly.

Common sense is not operating here, but the mania and madness of crowds. However, Friday's close warns that before the madness ceases, probably by end-March, the Dow might reach 15,000 as the fever blows red hot. Wherefore, stand not in the way, but do use this opportunity to unload any stocks you have left and put the proceeds into silver and gold.

Unless Dow closes below $13,678 (the 20 DMA), stocks will add altitude.

US dollar index Friday fell and stopped at 79 support (79.088) but rose today 27.1 basis points (0.36%) to 79.551. This might amount to no more than a bounce off that support before the dollar index sinks through toward the earth's core, or it might turn around and move sideways. What's that? Higher? I think not, but 'twas a droll suggestion.

Euro made a spike top at $1.3711 on Friday, yet gainsaid itself today by falling back below the resistance line. Was that its limit? Stay tuned, as it does qualify as a warning. Must follow thorough with closes below $1.3500 to confirm. Fell 0.9% today to $1.3518.

If you were a bookmaker and hadn't done anything savvier since September than fading bets the yen would rise, you'd be rolling in the dough. Friday yen made yet another low (107.56 intraday) but rose 0.51% today to close 108.34 cents/Y100. No logic, no rationale. It's market, it's crazy.

US$1 =Y92.03=E0.7398=0.031546 oz Ag=0.000597 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.