Gold Price Close Today : 1551.80
Change : -1.00 or -0.06%
Silver Price Close Today : 26.748
Change : -0.025 or -0.09%
Gold Silver Ratio Today : 58.016
Change : 0.017 or 0.03%
Silver Gold Ratio Today : 0.01724
Change : -0.000005 or -0.03%
Platinum Price Close Today : 1516.70
Change : -23.10 or -1.50%
Palladium Price Close Today : 724.20
Change : -30.00 or -3.98%
S&P 500 : 1,559.98
Change : 6.29 or 0.40%
Dow In GOLD$ : $194.57
Change : $ 7.50 or 4.01%
Dow in GOLD oz : 9.412
Change : 0.363 or 4.01%
Dow in SILVER oz : 546.06
Change : 2.59 or 0.48%
Dow Industrial : 14,606.11
Change : 55.76 or 0.38%
US Dollar Index : 82.73
Change : 0.021 or 0.03%
What's interesting with the silver and GOLD PRICE today is that their downward momentum screeched to a halt. Silver lost only 2.5 cents to 2674.8 while the GOLD PRICE gave up $1.00 to $1,551.80.
The SILVER PRICE low today hit 2666.8 cents. Over the last three days silver has scooped out a rounding bottom, like a bowl with the lip at 2700c. It must climb above 2700c to prove that's a real bowl. The line it must defend below is 2660 cents. Tomorrow will reveal which way it will jump.
Several physical items are in backwardation, i.e., their prices are higher than the paper price. US 90% now costs $2.15 an ounce over spot, but I can't buy very much even at that price. Silver rounds jumped a nickel an ounce today, silver American Eagles 10 cents, and they're quoting two week or longer delays.
That does NOT point to lower silver prices.
Gold has carved a similar bowl on its three-day chart, with a bottom at today's $1,540.50 low and a rim at today's $1,556.25 high. If gold intends to reverse, it ought to do so tomorrow. Dropping away from the lip of the bowl means it really isn't a bowl after all.
One last thing about that gold to silver swap. IRS considers it NOT a "like kind" exchange, so you have to pay capital gains tax on any gains you might have when you "sell" the gold for silver, at a 28% capital gains rate (special punishment for silver and gold investors).
Fellow wrote me from a state with income tax (we don't have it in Tennessee) wondering whether the gold silver swap would work if he has to pay that capital gain. He had bought gold at $835.
Now I know nothing about income tax, so don't take my advice, but I figured his gain and subtracted tax at the 28% rate on the gai, which worked out in his case to 12.9%, so he lost that much of the gold value in the swap. Then I figured out the 12.9% tax again on the swap back, even knowing it won't be that much.
Result was, he begins with 10 oz. of gold, swaps for silver less the tax, at a realized 55:1 ratio, then swaps back into silver at 32:1, and he ends with 4.32 more ounces than he started with.
I don't know -- that works for me, but some people might not like it. Don't take my advice under any circumstances, check with your Tax Daddy or Tax Mama first.
But you'd better check quickly, because the opportunity to swap doesn't last long. We are still doing them, with a two gold ounce minimum, no maximum. (888) 218-9226.
Currency markets went nuts today. New Bank of Japan surprised markets when the new governor Kuroda "committed the BOJ to open-ended asset buying and said the monetary base would nearly double to Y270 trillion by end of 2014," an injection of about $1.4 trillion. They will be buying Japanese government bonds, so the announcement sent bond yields toward zero. Why anyone would want to own bonds today promising to pay DEPRECIATED yen tomorrow lies beyond my puny ken.
The announcement, perhaps with a huge squeeze of euro short-sellers, drove the euro up 0.71% against the US dollar to $1.2933 and up 4.6% against the yen. Thousands of euro short-sellers are now puking in their wastebaskets.
Against the US dollar the yen fell 3.4% to 103.79. Meanwhile the US dollar index went mostly nowhere, rising 0.21 basis points to 82.732, up 0.03%. However, the EOD chart on Stock Charts shows a different story, down 0.06% with a close at 82.83. More, it shows the first half of a key reversal, a new high for the move with a lower close for the day. Lower close tomorrow constitutes a firm reversal.
US Stocks came back halfway today from yesterday's loss, so gave no clear cut sign of breaking down. Dow closed 14,606.11 (down 55.76 or 0.38%) while the S&P gained 6.29 (0.4%) to 1,559.98. Both are flirting with closing below their 20 day moving averages.
What about the Dow/Gold and Dow/Silver? Dow/gold backed off to 9.40 oz (G$194.31 gold dollars), down from 9.425 yesterday. Still have to brace for a 10 oz (G$206.72) possible high.
Dow/Silver closed higher today, at 544.70 ounces, trading in a very tight range. If it doesn't stop here, it's pointing as high as 600 oz.
(For some of you who don't read closely, look again at what I just said. I did NOT say the Dow/Silver certainly would reach 600 oz, only that it will be pointing toward that if it doesn't stop soon.)
The 10 year US treasury note yield has fallen back under support/resistance. Since bond prices rise when yields fall, that indicates lots of demand for bonds, and since US bonds are a proxy for US dollars, lots of demand for dollars. That hints that somewhere in the world, somebody is trying to buy safety.
Let me put this little bug in y'all's ear: the financial world and the goofs running it are like the Three Stooges hand carrying jugs of TNT across a tack-strewn minefield barefooted. The whole mess, probably beginning in Europe, could blow up any time. If you keep believing that somehow or the other Ben and Mario will muddle through to safety, you are simply lying to yourself.
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.