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Monday, April 08, 2013

The Gold Price Bottomed Friday Confirmation Will be a $1,600 Close this Week

Gold Price Close Today : 1572.00
Change : -3.40 or -0.22%

Silver Price Close Today : 27.120
Change : -0.081 or -0.30%

Gold Silver Ratio Today : 57.965
Change : 0.048 or 0.08%

Silver Gold Ratio Today : 0.01725
Change : -0.000014 or -0.08%

Platinum Price Close Today : 1535.90
Change : 15.00 or 0.99%

Palladium Price Close Today : 732.85
Change : 5.90 or 0.81%

S&P 500 : 1,563.07
Change : 9.79 or 0.63%

Dow In GOLD$ : $192.17
Change : $ 7.50 or 4.06%

Dow in GOLD oz : 9.296
Change : 0.363 or 4.06%

Dow in SILVER oz : 538.85
Change : 3.38 or 0.63%

Dow Industrial : 14,613.48
Change : 48.23 or 0.33%

US Dollar Index : 82.76
Change : 0.070 or 0.08%

The GOLD PRICE gave back $3.40 to $1,572. The SILVER PRICE lost 8.1 cents to end at 2712 cents.

Metals are digesting Friday's gains. It appears that the silver and GOLD PRICE both bottomed with Friday's lows. Here are the boundaries that will confirm or gainsay:

Gold must not close below $1,555. Above it needs to throw a leg over $1,600 this week (for my taste) and then climb over that 50 DMA at $1,610.73. That's not all. To attract more buyers it needs to better the last high at $1,616.50, but really needs to close over $1,625. Given the underlying jumpiness of today's markets, large leaps wouldn't surprise me. I am also bruised and bloody enough that even a lower close wouldn't surprise me, but THIS time I believe we have a bottom.

The SILVER PRICE must hold above today's 2696 low, but needs to march on through 2750 and then the 20 DMA at 2834 cents.

US 90% premium today rose to $2.555 an ounce, highest I've seen it since the 2008 Panic. Clearly, there is a huge appetite for physical silver. Silver rounds now have deliveries stretches out 4 - 6 weeks. I don't believe very many folks thoroughly grasp exactly how thin the physical market for silver really is, or how little runs in the supply lines. It doesn't take much buying to drain that line.

Silver and gold, like two big rattlesnakes that have just eaten particularly fat rabbits, took some time lying in the sun to digest Friday's gains. Stocks have inertia, but which way? Japanese finally talked the yen down to 100 cents.

Dow rose 48.23 today, 1/3 of 1%, to end at 14,613.48. S&P500 felt perkier, rising 0.63% (9.79) to 1,563.07. Not sure whether the inertia is keeping em up or dragging 'em down. They looked to have rolled over, though.

Dow in Gold and Dow in Silver, in spite of lower silver and gold and higher stocks today, managed not to disrupt that Island Reversal pattern. Dow/Gold closed at 9.29 oz (G$192.04 gold dollars), up 0.83%. Dow/Silver rose 048% to 536.67 oz. Both markets have broken, unless they gainsay that with closes higher than highs already posted. I still want confirmation.

Yen closed nearly on the low today at 100.62 cents/Y100. That's probably the target they were shooting for, the Nice Japanese Government Men.

Euro rose 0.19% to $1.3017. It wants to go much higher, and has escaped the chains of its downtrend.

US dollar is now trading up 0.9% (7 basis points) at 82.759. A close below 82.60 shatters the uptrend line. Dollar has rolled over, but with currencies who knows what will happen next. Governments can throw surprise parties any time.

On 4 April 1861 the Confederate States seized the US mint at Dahlonega, Georgia. During the 1830s and 1840s there was a gold rush in northern Georgia and southern North Carolina. With typical government efficiency, the US mint refused for a long time to establish branch mints at Charlotte and Dahlonega. Two German brothers, the Bechtlers, set up a minting operation in Rutherfordton from 1830 - 1852, minting the first gold dollars, $2.50, and $5 pieces. I have heard but not seen proved that in many parts of the South the Bechtlers, being more common that US money, were preferred to it. If the Bechtlers tried to do that today, O'barmer and his trolls would throw 'em in jail.

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

- Franklin Sanders, The Moneychanger
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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.