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Wednesday, May 01, 2013

Silver and Gold Prices Both Fulfilled Yesterday's Suspicions by Dropping Today

Gold Price Close Today : 1446.30
Change : -25.90 or -1.76%

Silver Price Close Today : 23.305
Change : -0.839 or -3.47%

Gold Silver Ratio Today : 62.060
Change : 1.084 or 1.78%

Silver Gold Ratio Today : 0.01611
Change : -0.000286 or -1.75%

Platinum Price Close Today : 1475.70
Change : -36.70 or -2.43%

Palladium Price Close Today : 683.65
Change : -3.05 or -0.44%

S&P 500 : 1,582.70
Change : -14.87 or -0.93%

Dow In GOLD$ : $210.12
Change : $ 7.50 or 3.70%

Dow in GOLD oz : 10.165
Change : 0.363 or 3.70%

Dow in SILVER oz : 630.81
Change : 16.17 or 2.63%

Dow Industrial : 14,700.95
Change : -138.85 or -0.94%

US Dollar Index : 81.65
Change : -0.076 or -0.09%

Silver and GOLD PRICES both fulfilled yesterday's suspicions by dropping today. Gold slumped $25.90 to $1,446.30 while the SILVER PRICE backslid 83.9 cents to 2330.5c.

Since we dwell not in Never-Never Land, we have to face what this means, and it's something good: the bottom is near, and drawing nearer. The decline that began on 12 April might carry to nearly the same lows, or lower lows. More likely is a lower low. Gold's bottom Bollinger Band, a possible target, now rests about $1,325, not far from the 15 April low at $1,321.50.

Seasonally, the lows for the silver and gold prices sometimes occur in May, more often in June, so the seasonals have us set up for a bottom sometime fairly soon. Gold and silver sentiment has been eviscerated, reaching the necessary pessimistic extremes for us to grow optimistic and to turn around. Point is, both markets should soon reach a low risk buying point.

Be patient, be patient. The silver and gold Bull Market is still intact, still pulsating with life. Just hang on, keep your eyes on the horizon.

I have been dealing in physical silver and gold for 33 years this month, and it may shock y'all to hear this, but it's true: not every gold and silver dealer will give you sound advice. However, unless you are as gullible as Candide, reason might save you from deals against your best interest. I heard about one dealer offering to swap your silver and gold American Eagles for one ounce silver rounds or foreign gold coins, ounces for ounces. This he was pushing under some numbskull threat of government confiscation.

Listen, hear me, bore this into your brains: you are more likely to be meet aliens from the Planet Zambodia in a pizza parlor, more likely to grow a long, furry prehensile tail overnight, than you are for the government to confiscate your silver or gold. It's a scare story designed to frighten you into doing something against your own interest. Besides, from what I know of y'all, if the yankee government said, "Turn in your gold and silver" y'all would say, "Molon labe!"

Anyhow, it is possible at time to swap from one form of silver or gold to another and turn a temporary premium into ounces. We do that for our customers whenever possible, but trading gold or silver Eagles now for other coins with low premiums at even ounces merely takes money out of your pocket and stuffs it into the dealer's. Why would you ever swap from silver to silver or gold to gold unless it put more ounces in your pocket? You wouldn't, so don't fall for it.

The Masters of the Universe at the Federal Open Market Committee spake today and said -- pretty close to nothing. Lunatic as it sounds, they said they might increase their purchases of assets, i.e., increase Quantitative Easing. Increase. Above $85 billion a month. Oh, and they kept the federal funds rate target between 0 and 0.25%, meaning they continue to suppress interest rates and so prevent that economic cleansing which alone can bring back economic activity. Never mind. They are the Masters of the Universe, and I only a natural born fool.

The stock market took the FOMC's announcement about like your prospective father-in-law when you told him that you thought everybody ought to snort cocaine daily.

Stock indices tumbled across the board. Dow fell 138.85 (0.94%) to a suspicious 14,700.95. S&P dwindled 14.87 (0.93%) to 1,582.70. Of yesterday's close I said that this would be good place for them to push higher, or a more likely place to fail, and fail they did.

Dow fell sharply, briefly touching its 20 day moving average (14,689.29) and closing not much above that. S&P closed near its low, but still a ways above that 20 DMA (now 1,572.60). Assuming stocks repeat today's performance and close lower tomorrow, they have topped for a while. Investors will begin to play "Rat Jump Off The Sinking Ship" when the Dow drops below 14,430 and the S&P500 below 1,536.

Stocks dropped today, and gold and silver dropped today, but gold and silver dropped more, lifting the Dow in Gold and Dow in Silver. Dow/Gold rose 1.11% to 10.17 oz (G$210.23 gold dollars). Dow/Silver rose 3.02% to 629.78 oz. Nevertheless. . .Notwithstanding. . . All the same, the downtrends in Dow/Gold and Dow/Silver remain in force.

Everything seems to be falling apart today. US dollar index lost another 7.6 basis points (0.1%). Since it 83.005 close on 23 April the dollar index has fallen 135.7 basis points or 1.6%. As much as a chart can say anything in a manipulated market like currencies, this chart is saying, "I am falling and I can't get up." Absolute bottom of support is the last low at 81.78, and now for two days running the Dollar Index has closed below that point. And way below its 20 and 50 DMAs. And other indicators point down. But trusting a currency to follow a chart is like taking a cold rattlesnake into your shirt to warm him up. Sooner or later, he'll bit you.

Euro clambered up another 0.15% today to close $1.3187, confirming its break out upside. Well, Almost. It really needs to close over $1.3200 as final proof.

Japanese yen remains in its Lilliputian uptrend, rising 0.11% today to 102.75 cents per Y100. 50 DMA stands at 104.34.

US$1=Y97.32=E0.7583=0.042909 oz. Ag=0.000691 oz Au.

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.