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Wednesday, May 15, 2013

Can Silver and Gold Prices Hold Above their April Lows?

Gold Price Close Today : 1396.50
Change : -28.20 or -1.98%

Silver Price Close Today : 22.643
Change : -0.712 or -3.05%

Gold Silver Ratio Today : 61.675
Change : 0.673 or 1.10%

Silver Gold Ratio Today : 0.01621
Change : -0.000179 or -1.09%

Platinum Price Close Today : 1490.70
Change : -11.20 or -0.75%

Palladium Price Close Today : 728.30
Change : 1.90 or 0.26%

S&P 500 : 1,658.78
Change : 8.44 or 0.51%

Dow In GOLD$ : $226.12
Change : $ 5.35 or 2.42%

Dow in GOLD oz : 10.939
Change : 0.259 or 2.42%

Dow in SILVER oz : 674.63
Change : 23.15 or 3.55%

Dow Industrial : 15,275.69
Change : 60.44 or 0.40%

US Dollar Index : 83.82
Change : 0.217 or 0.26%

Silver and GOLD PRICES took a bad beating with a big stick today. Gold prices buckled by $28.20 (2%) to $1,396.50, below the morale- busting $1,400 level. Silver belly-flopped by 71.2 cents to 2264.3 cents, 3.1% lower than yesterday.

For gold, $1,375 - $1,350 now becomes the target, and we are fast drawing nigh that juncture where we will discover whether that $1,321.50 low on 15 April marks the limit of gold's correction.

From the SILVER PRICE low today at 2252.3 it's only 52 cents to the 15 April low at 2200c. Tomorrow we'll find out how many buyers are lurking there, and how much they want to buy.

I am of course no more than a natural born fool from Tennessee, but if his highness Ben the Banker were to put me in charge of manipulating silver and gold prices, even for a day, and I wanted them to drop, I'd hit 'em hard tomorrow, to test whether they have any resilience at those earlier lows or not. If I couldn't break 'em, I'd leave 'em alone for a while. But don't pay no attention to me, I'm just a fool and don't know nothin'.

Can't help sounding like a broken record, because although the end is sure, blow-off markets take time to unfold.

Two headlines make my blow-off point. "Dow, S&P500, Google at all time highs intraday. Stocks shrugged off disappointing economic data in the US and Europe and continued to move higher into record territory." Or this: "Wall Street rallies despite downbeat earnings. US stocks soared to new record highs on Wednesday, despite further signs that the country's largest public companies have seen limited sales growth in the first year's quarter."

Good news, bad news, no news -- it's all the same to a blow-off market, it will rise on any news, even news that ought to cast rational doubt on future performance.

Never mind. Dow and S&P500 both made new all-time highs again today. Dow fattened up 60.44 (0.4%) to 15,275.69. S&P500 swelled 8.44 (0.51%) to 1,658.78.

Put that into perspective. To match its inflation-adjusted peak in 2000, the Dow today would need to reach 15,845.33. To match its 2007 inflation adjusted peak, the S&P500 would have to be at 1,772.67. To reach its year 2000 peak, adjusted for inflation, the S&P500 today needs to reach 2,099.43. Those prices would just bring you even with what inflation has cost.

The Dow in Gold and Dow in Silver jumped up today, thanks to rising stocks and falling metals.

Dow in silver jumped to a new high at 674.19 oz, up 3.66%. Dow in gold did not jump quite as much, only to 10.94 oz (G$226.15 gold dollars) where the last high was 11 oz. Both are flirting and trading through and around long term downtrend lines. Nerve-wracking.

The US dollar index continued to rise today, adding another 21.7 basis points (0.285) to 83.822, confirming yet again that it has broken out towards the sky. This will drag on gold and silver and stocks.

Anent this temporarily strong dollar, it's interesting that the yield on the US treasury 10 year note since May 1 has risen right sharply, implying that folks are selling dollars. Why? To invest in stocks, where they might find some return? Falling yields (rising bond prices) would be bad news for stocks right now.

Astonishing everyone, the Japanese yen actually rose 0.04% today to 97.79 cents/Y100. Frankly, it makes little sense looking at the chart any longer, since the Nipponese Nice Government Men are plainly in charge, with the approval of the G7 central banks.

The euro gapped down today on more bad economic news: Euroland has an incredible shrinking economy. That knocked the currency in the head. It closed beneath its 200 DMA yesterday, gapped down today to close at 1.2878, down 0.48%. Should the euro not catch hold around the last low ($1.2750), a large span of air remains to catch it before it hits $1.2600.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
1-888-218-9226
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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.