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Friday, May 24, 2013

Silver and Gold Prices Confirmed Their Bargain Bottoms

Gold Price Close Today : 1,386.60
Gold Price Close 17-May-13 : 1,364.90
Change : 21.70 or 1.6%

Silver Price Close Today : 22.482
Silver Price Close 17-May-13 : 22.339
Change : 0.143 or 0.6%

Gold Silver Ratio Today : 61.676
Gold Silver Ratio 17-May-13 : 61.099
Change : 0.58 or 0.9%

Silver Gold Ratio : 0.01621
Silver Gold Ratio 17-May-13 : 0.01637
Change : -0.00015 or -0.9%

Dow in Gold Dollars : $ 228.14
Dow in Gold Dollars 17-May-13 : $ 232.55
Change : -$4.41 or -1.9%

Dow in Gold Ounces : 11.036
Dow in Gold Ounces 17-May-13 : 11.250
Change : -0.21 or -1.9%

Dow in Silver Ounces : 680.69
Dow in Silver Ounces 17-May-13 : 687.35
Change : -6.67 or -1.0%

Dow Industrial : 15,303.18
Dow Industrial 17-May-13 : 15,354.79
Change : -51.61 or -0.3%

S&P 500 : 1,649.61
S&P 500 17-May-13 : 1,658.18
Change : -8.57 or -0.5%

US Dollar Index : 83.570
US Dollar Index 17-May-13 : 84.279
Change : -0.709 or -0.8%

Platinum Price Close Today : 1,451.90
Platinum Price Close 17-May-13 : 1,468.00
Change : -16.10 or -1.1%

Palladium Price Close Today : 726.45
Palladium Price Close 17-May-13 : 739.50
Change : -13.05 or -1.8%

No gigantic changes appear on the board, but this was probably the week stocks turned down and silver and GOLD PRICES confirmed their bottoms. May have been the week the US Dollar Index turned down, too.

The gold price gave back some of yesterday's' gains today, losing $5.20 to $1,386.60. Silver lost a nothing 1.2 cents to 2248.2c.

The SILVER PRICE began the week with an overnight attack in Asia that tugged it down to a 2025c low, but it speedily recovered and closed the day higher. Rest of the week it maintained, but not much more. Silver needs to climb above 2300c, then 2500c, then up past that 2750c where it broke down in April.

More than the gold price, the silver price stands yet in the shadow of one possible last plunge to a lower low. We are entering into June, which seasonally usually shows the year's low. Equally, silver might NOT break to a lower low, and that Monday low might mark a double bottom with the previous 2200c low.

How do you know which? You wait to see what the market says. Remember also that silver tends to lag gold when stocks are feeling poorly, which almost certainly will be the case for a while.

After failing again to break through $1,395 overnight, gold went flat today. It's the weekend before the Memorial Day holiday, and no traders want to go home with a big position on. Might upset digesting all that barbecue. All the same, gold certainly showed strength withstanding that Asian attack on Monday. But all week long $1,395 has stymied it, so next week that becomes its target.

What I keep looking over my shoulder at is the chance of gold rallying up to $1,500, even $1,550, then falling down again for one last plunge. How will you know a trip to those heights is false? You won't. You'll know its true if it keeps shooting up.

So we are left looking at bargain silver and GOLD PRICES. Are we going to be afraid to buy because we aren't SURE? You're never going to have that much certainty with any market. I guess the downside risk from here is probably about 5%, down to $1,321.50 (April low). For silver that risk reaches to 1950c (on a plunge) or 14%.

Or you can wait and buy when gold trades steadily above $1,550 and silver above 2750c.

I wish y'all could all be here to share Tennessee with me today. 72 degrees, clear as a bell, gentle breezes, rambling roses and honeysuckle and privet filling the air. It's about as close to heaven as you'll get in this life. Yesterday I went and picked up 8 new swarms of bees, and put them out last night. Y'all see what a risk-taking plunger I am -- hive beetles or not, I'm going to try again.

Both daily and weekly stock charts show a key reversal, although next week's weekly chart must still confirm that. It was the first week in five that stocks did not end higher.

Even thought the Dow spent most of today underwater, it managed "somehow" to close up 8.6 (0.06%) to 15,303.18. Right cosmetic close, I'd say, with some Ripe Mackerel perfume. Along with every other index except the Dow, the S&P500 fell 0.91 (0.6%) to 1,649.60. As huge markets stocks take a long time to roll over, but the definitive event came this week with a Key Reversal on Wednesday (new high intraday with lower close for the day) confirmed on Thursday (lower close). That's the definitive event, like signing up to join the army. They haven't started yelling at you or shooting at you yet, but that will all surely come once you sign that line.

Likewise, the Dow in Gold and Dow in Silver both fell through their uptrend lines. Dow in gold rose a smidge today, as did the Dow in Silver, but these tiny gains change nothing. Assuming that the Dow/Gold and Dow/Silver confirm with lower prices next week, the trend of stocks gaining value against silver and gold has ceased. Special value of that message for us is that normally it signals that the metals' price lows are behind us.

Yes, I did say that.

Not clear to me yet whether the US dollar index has broken for good or just for a correction in an ongoing uptrend. Assumption must lie with the ongoing up trend (targeting 89 or so) but a close below 83 would cast some pretty leaden doubt on that.

One reason to suspect the dollar's future will more resemble an earthworm than a soaring hawk would be the Euro. It caught at crucial $1.2800 support and rallied. Has reached but not been able to penetrate its 200 dma ($1.2989). Still, the euro, scrofulous, ratty, mired in the most incurable banking and economic mess of an economy carrying social costs like a 500 lb. anchor, looked peppy the last two weeks. Today it rose a nothing 0.02% to $1.2935.

Yen rose again today, up 0.81%, to 98.92 cents/Y100. For whatever mysterious reason, stocks and the yen are moving opposite each other. Yen is about to clear its 20 DMA (now 99.45) for the first time since April, first sign it MIGHT turn up. Other indicators also show an upturn.

Fiat currency and central banking! Why, a world without fiat currencies and banks would be like a fish without a bicycle! It would be unthinkable, like a world without ticks, chiggers, tapeworms, or fever blisters.

Y'all keep an eye on that 10 year US treasury note yield. It is trying to push through 2.1% and if it does, Ben Bernanke will need some Excedrin. Maybe some Scotch, too, because it might signal faltering faith in the dollar.

Y'all enjoy your weekend!

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

- Franklin Sanders, The Moneychanger
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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.