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Monday, May 13, 2013

Fiat Money Will Lose Against Silver and Gold

Gold Price Close Today : 1434.50
Change : -2.30 or -0.16%

Silver Price Close Today : 23.670
Change : 0.038 or 0.16%

Gold Silver Ratio Today : 60.604
Change : -0.195 or -0.32%

Silver Gold Ratio Today : 0.01650
Change : 0.000053 or 0.32%

Platinum Price Close Today : 1484.50
Change : -1.50 or -0.10%

Palladium Price Close Today : 717.95
Change : 13.35 or 1.89%

S&P 500 : 1,633.77
Change : 0.07 or 0.00%

Dow In GOLD$ : $217.48
Change : $ (0.04) or -0.02%

Dow in GOLD oz : 10.521
Change : -0.002 or -0.02%

Dow in SILVER oz : 637.59
Change : -2.16 or -0.34%

Dow Industrial : 15,091.68
Change : -26.81 or -0.18%

US Dollar Index : 83.17
Change : 0.471 or 0.57%

Silver and GOLD PRICES gainsaid each other today. The SILVER PRICE rose 3.8 cents to 2367c while gold fell $2.30 to $1,434.50.

Question occupying (what's left of) my mind is, Was the 12 and 15 April plunge a spike bottom signaling sellers' exhaustion, OR, did it only signal a half-way move? Does it make a difference? Well, if twas a half way move, gold will yet tumble another 13% or so to $1,250. On the other hand, if GOLD PRICES confirm that $1,321.50 bottom with a low at $1,400 or $1,375 that holds and reverses, it's time to take a chance and buy. That could happen this week. Having repeatedly read (but not confirmed) that 400 tonnes of paper gold was sold into the futures market on 12/15 April, I'm inclined to call that a Nice Government Men bear raid that probably can't be repeated again soon. (400 tonnes is 12.86 million oz, at $1,550 an ounce about $20 billion. Throwing that all onto the market at one or two licks is hardly the way a profit-maximizing seller behaves, at least in this universe.)

But my hesitation between these two answers, spike bottom or half-way, doesn't change the outlook, namely, fiat money will lose against silver and gold. That raid, too, smells a bit of central banker FEAR. I'm preparing a little comment on that underlying outlook for y'all, but it will have to wait until tomorrow.

Confusing things more (or clearing them up) was silver's closing higher -- although barely -- than Friday. Either silver or gold is pointing the wrong way. I reckon we'll find out which tomorrow.

When two people disagree, chances are they can't both be right. Likewise, when markets that ought to agree and confirm each other don't, one of 'em is lying.

Dow and S&P500 couldn't agree today. Dow scraped off 26.81 (down 0.18%) to 15,091.68 while the S&P500 barely moved, but up 0.07 point at 1,633.77. Somebody's wrong. (Dow fell barely through its uptrend line.)

Dow in Gold fell minutely, .001 oz to 10.521 oz (G$217.49 gold dollars). Likewise the Dow in silver fell from 639.75 oz on Friday to 637.59 oz today, a 0.33% drop. No dramatic change here, but the downtrends remain in force, although Dow in gold is striving to turn up, maybe make a double top with the 11 oz (G$227.39 high).

US Dollar Index Friday broke out to the upside. Today it went nowhere, backed off 1.4 basis points. target for this move is probably 86, maybe 89 before it's over. That's not good news for stocks or for silver and gold.

The international gangsters who run the central banks of the G7 nations met over the weekend, ate fat victuals and drank fine wine, smacked their lips and said, "Japan ain't done nothing wrong, and y'all remember this ain't a currency war."

Meditate on what allowing Japan to drop its currency exchange rate 25% against the dollar in 8 months and I don't know how much against the Euro and all the Asian currencies means to exporters. Great for Japan, not so great for Europe and Asia and the US -- but shucks, we haven't had a foreign or exchange rate policy run in our own interest since Grover Cleveland was president.

The euro dropped 0.17% to $1.2929, right at its 200 day moving average and, one guesses, headed for $1.2000 yet again. Yen sank under 100 cents to 98.01 cents /Y100, down 0.2%.

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.