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Monday, March 11, 2013

The Gold Price Gained $1.20 to Close $1,577.80 Showing Signs of Oversold Market

Gold Price Close Today : 1576.60
Change : 1.80 or 0.11%

Silver Price Close Today : 28.909
Change : 0.142 or 0.49%

Gold Silver Ratio Today : 54.537
Change : -0.207 or -0.38%

Silver Gold Ratio Today : 0.01834
Change : 0.000069 or 0.38%

Platinum Price Close Today : 1601.90
Change : -27.00 or -1.66%

Palladium Price Close Today : 780.65
Change : -3.55 or -0.45%

S&P 500 : 1,541.18
Change : -3.08 or -0.20%

Dow In GOLD$ : $188.77
Change : $ 0.62 or 0.33%

Dow in GOLD oz : 9.132
Change : 0.030 or 0.33%

Dow in SILVER oz : 498.01
Change : -0.30 or -0.06%

Dow Industrial : 14,397.07
Change : 62.21 or 0.43%

US Dollar Index : 82.77
Change : 0.650 or 0.79%

Some things you don't see often, and one of 'em is a flat silver and GOLD PRICE market. For eight days they've hardly moved. Last Wednesday gold even closed unchanged!

Today the GOLD PRICE gained $1.20 to close at $1,577.80 while silver lost 9.7 cents, ending at 2881.2 cents. Gold ranged today from $1,582.80 to $1,576.48, about the same range it's measured the last week and a day, $1,585 - $1,565. 'Twas encouraging to see gold slammed on Friday down to $1,564.30, a new low for the move, but close at $1,576.60. Apparently down around $1,565 the sellers evaporate while the buyers materialize.

Gold is flashing all the signs of a severely oversold market, with market sentiment at a 10 year extreme low as well as Commitments of Traders shorts. Friday may well have marked the low, the last test, but I reserve the possibility we could see one more down to that last low at $1,554.30.

The bears gave the SILVER PRICE the same roughing up on Friday, but silver, too, clawed its way back. Silver, too, has ranged very narrowly in the past eight days. Today it pushed toward the top of that range at 2909, with a low at 2872.4c.

This is a waiting game. If you don't believe silver and gold have seen their lows, you wait. I am encouraged by Friday's performance when they refused to break to lower levels. However, we need some confirmation on the upside, with silver climbing above 2950c and gold over $1,600.

A top draweth nigh in stocks and a bottom in silver and gold. If you still have stocks, markets are handing you an opportunity to sell stocks and roll the proceeds into metals. Crazy? That's what the lemmings think.

In the face of the propaganda barrage and the bewildering red herrings the news constantly throws at you, you must remember one thing: monetary demand, and only monetary demand, drives bull markets in silver and gold. Everything else is mere noise: deflation scares, fiscal cliffs, sequestrations, FOMC minutes, Bernanke statements, and all the rest of it. Red herrings, false spoor. Inflation causes monetary demand, and inflation is not about to disappear.

Humans are herd animals, so they are most comfortable following the lemmings, buying when the crowd buys and selling when the crowd sells. Since the crowd maketh never no money, you must learn to conquer that urge to follow the crowd, keep your head, sell when smugly comfortable and buy when terrified.

I am constitutionally suspicious, I reckon. Why that little divergence between the Dow and the S&P500? Dow has made a new high, but S&P500 has not yet exceeded its 2007 high of 1,565.15.

Dow rose 50.22 (0.35%) to close near the high at 14,447.29, it's seventh new high in a row. Ditto the S&P500, up 5.04 today (0.32%) at 1,556.22.

Also, the charts differ. While the Dow has broken out above the top jaw of its megaphone, it still contains the S&P500.

How are stocks behaving against gold and silver? The Dow in Gold has barely inched higher, closing today at 9.16 oz (G$189.354 gold dollars). That fulfills my upside target of 9.12.

Dow in Silver has also crept up, reaching 500.72 oz today. Top here is about 510 oz.

US dollar hit 82.92 on Friday, near about fulfilling that 83 target. Looked a bit peaked today, falling off 14.5 basis points (0.2%) to 82.575. Remains in a steep and unbroken uptrend.

Yen broke down last week to a new low for the move, and today lost 0.29% to close at 103.89 cents/Y100. Appears the Japanese politicians and central bank have made a deal with the Federal Reserve (the hegemon) and its clients (ECB, etc.) to let the yen fall even further. That has taken pressure off the euro, which has cheapened against the yen, but now the Japanese are stealing a march on the Germans again.

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.