Gold Price Close Today : 1,501.00
Gold Price Close 5-Apr-13 : 1,575.40
Change : -74.40 or -4.7%
Silver Price Close Today : 26.322
Silver Price Close 5-Apr-13 : 27.201
Change : -0.879 or -3.2%
Gold Silver Ratio Today : 57.025
Gold Silver Ratio 5-Apr-13 : 57.917
Change : -0.89 or -1.5%
Silver Gold Ratio : 0.01754
Silver Gold Ratio 5-Apr-13 : 0.01727
Change : 0.00027 or 1.6%
Dow in Gold Dollars : $ 204.72
Dow in Gold Dollars 5-Apr-13 : $ 191.12
Change : $13.60 or 7.1%
Dow in Gold Ounces : 9.903
Dow in Gold Ounces 5-Apr-13 : 9.245
Change : 0.66 or 7.1%
Dow in Silver Ounces : 564.74
Dow in Silver Ounces 5-Apr-13 : 535.47
Change : 29.27 or 5.5%
Dow Industrial : 14,865.06
Dow Industrial 5-Apr-13 : 14,565.25
Change : 299.81 or 2.1%
S&P 500 : 1,588.85
S&P 500 5-Apr-13 : 1,553.28
Change : 35.57 or 2.3%
US Dollar Index : 82.117
US Dollar Index 5-Apr-13 : 82.494
Change : -0.377 or -0.5%
Platinum Price Close Today : 1,495.30
Platinum Price Close 5-Apr-13 : 1,534.40
Change : -39.10 or -2.5%
Palladium Price Close Today : 707.95
Palladium Price Close 5-Apr-13 : 722.75
Change : -14.80 or -2.0%
What a week! The day started off bad for the silver and GOLD PRICE, and then got worse. Gold was driven below the last low ($1,539) before 9:00, traded a short while sideways, then was bombed again down to $1,505. By Comex close it had lost $63.30 (4%) to $1,501, but it didn't stop there. In the aftermarket gold lost another $18.90 (to $1,482.10), for a total loss from yesterday of 5.25%. That's a huge loss by any measure, greatest percentage loss since 23 September 2011's 5.85%.
The SILVER PRICE followed gold's pattern, losing 136.3 cents (4.9%) by the time it closed Comex at 2632.2c. Late in the aftermarket silver had lost another 42.7c to trade at 25.895, a total loss for the day of 6.4%.
Real import of these losses lies in their breaking support which had held for two years. UNLESS silver and gold turn up Monday or Tuesday and close above today's breakdown points (2720c and $1,540), they will continue lower, possibly as low as 1950c and $1,430 - $1,300.
I saw a couple of people making a big deal out of gold dropping more than 20% from the $1,900 high in 2011. Mercy, call in the adults. Who wrote in stone that a 20% decline makes a bear market? (Anyway, they mean a bear phase, not a bear market as in "primary trend".) From the March 2008 high at $1,003.20 gold fell to a $685 intraday low in November, down 31.7%. It closed that day at 704.50, down 29.7%! That same year silver fell from a 2068.15c high to 880c, a 57.4% loss and a 105% loss of the foregoing rise. That fall of 2008 I had three wastebaskets in my office.
But many of the same contradictions to that weakness in 2008 appear today, like the climbing premiums on physical silver. I spent most of August, September, October, November, and December checking my presuppositions two or three times a day. Can silver and gold really be in a bull market and drop this badly?
At times like these, you better check out those presuppositions again, and cause and effect, straining out the camel of current events to find the gnat of cause and effect. When you make a right decision, it's admirable perseverance in the face of hardship. If it turns out wrong, why, then its stubborn stupidity. How do you tell the difference?
I always come back to this: Reality is your best friend. What I want how I'd like things to turn out, my biases and longings -- all that may run counter to reality and may fool you. Wishful thinking will wind you up in the ditch.
Cause hasn't changed, so the effect won't change. Since 2008 central banks and governments have proven time and again that when they fall into a crack, they will frantically print their way out. Right now, they're in the catbird seat, having floated the stock market on a sea of new money. They will keep on doing the same, because they have only two weapons against economic crisis, Blarney and Liquidity. Meanwhile, the economy just won't get started, unemployment just won't go away, Japan has had a flooded carburetor for 23 years, and Europe threatens to blow apart. None of the underlying causes has been addressed, nor has any authority even mentioned addressing them.
So the central banks may skate by for a month, or six months, or a year, but eventually all that money they've been printing, AND will keep on printing, will send the silver and GOLD PRICE up again.
I can wait, just me and my wastebasket. I'll just sit here, reading history and reminding myself that it won't be "different this time."
The Friends of Paper Money had a hey-day this week, while silver and gold took a beating with a barbed wire scourge. My Galactic Hogwash Alarm started blaring its klaxon early this morning, and kept on ringing and blinking all day as all the Mighty pontificated. Meanwhile, I kept calm by puking in my wastebasket. I've been here before. That's why I have two wastebaskets.
Dow stalled today while the S&P500 fell a tad. Dow lost 0.08 to 14,865.06. S&P500 lost 4.52 (0.28%) to 1,588.85.
Dow/Gold and Dow/Silver contradicted all my expectations by jumping hugely. Dow/Gold closed up 5.4% at 10.04 oz (G$207.54 gold dollars). That gains back the entirety of the loss from July 2009 to the August 2011 low at 5.69 (G$117.62). However, the Dow in Gold would have to climb above 14 oz (G$289.40) to cross above the downtrend line from the 1999 high.
Dow/Silver also leapt up, closing 574.27, up 6.53%. That collects about 70% of the loss from the beginning of 2010 to the 247.38 oz low in August 2011. To recapture 100% of that loss Dow/Silver would have to climb to 676.46. Downtrend from the June 2001 high hits about 650 oz.
US got "tough", well, talked tough, to the Japanese today about competitive currency depreciation. Fed's line in the sand is probably 100 c/Y100. Dollar kept on rolling over today, losing 11.7 basis points (0.15%) to close 82.117, ever closer to 82, where the real morale-buster awaiteth.
Yen gained 1.01% to 101.31c/Y100 today, probably on the USG chatter. Euro was basically flat, down 0.3% at $1.3101.
I will be travelling with my wife to Charleston, South Carolina next week for a brief vacation. I will try to shoot off a few commentaries, especially on Monday.
Y'all enjoy your weekend!
Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.
- Franklin Sanders, The Moneychanger
10:00am-5:00pm CST, Monday-Friday
© 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.