Thursday, May 23, 2013

Silver and Gold Prices Have Bottomed

Gold Price Close Today : 1392.00
Change : 24.40 or 1.78%

Silver Price Close Today : 22.494
Change : 0.036 or 0.16%

Gold Silver Ratio Today : 61.883
Change : 0.987 or 1.62%

Silver Gold Ratio Today : 0.01616
Change : -0.000262 or -1.60%

Platinum Price Close Today : 1457.20
Change : -12.00 or -0.82%

Palladium Price Close Today : 738.25
Change : -13.50 or -1.80%

S&P 500 : 1,650.51
Change : -4.84 or -0.29%

Dow In GOLD$ : $227.13
Change : $ (4.24) or -1.83%

Dow in GOLD oz : 10.987
Change : -0.205 or -1.83%

Dow in SILVER oz : 679.94
Change : -1.65 or -0.24%

Dow Industrial : 15,294.50
Change : -12.67 or -0.08%

US Dollar Index : 83.70
Change : -0.584 or -0.69%

I got to tell y'all, there ain't nothing normal going on with these silver and GOLD PRICES. Gold today closed up $24.40 (+1.78%) while silver rose -- ready for this? -- 3.6 cents (0.16%) to 2249.4c.

Every time markets challenge the same resistance or support, that line becomes more likely to yield. I'm looking at the 5-day gold price chart, and I see not one, not two, not three, but five (5) challenges of $1,395. I also see 'twas driven down to $1,360 twice. This won't persist much longer. If I had to bet, I'd bet on the gold price piercing that barrier and shooting higher.

The SILVER PRICE seems strangely subdued in all this. Ratio closed at the high end of the range today, 61.883. Silver has been contained between 2200c and 2290c the last three days, but today couldn't get higher than 2267c. Scratch your head! Silver's performance against gold does tend to move same direction as stocks, but . .

Stocks broke today for this leg, but probably not for the all-time (don't y'all just love that word?) grand finale top. However, since all the stock markets in the world are skipping in step, it could be brutal. Meanwhile, more evidence accumulates that silver and GOLD PRICES have indeed bottomed. Looking over your shoulder for one last possible plunge down, y'all might start pecking at buying some silver and gold.

I reckon FEAR, old rank, steaming FEAR, sent Salvador Dali and his irrationality packing. Looks like Bodacious Ben's peeping and muttering satisfied nobody, and what's worse, scared the market AND the horses.

Japanese Nikkei stock index dropped -- gag! -- 7.3% while we slept in Tennessee, and the Hong Kong Hang Seng index fell over 2%. The wave of selling washed clean around the globe: German DAX down 2.1%, French CAC down 2.07%, Euro Stoxx down 2.12%, London FTSE down 2.1%.

Let us always remember and never forget that yesterday the S&P500 and the Dow posted the first half of a Key Reversal (intraday rise to new high with lower close). So. . .what happened today?

Dow traded as low as 12,180 before it rallied back (Fine job, Nice Government Men! Float that ax head!) to close down only 12.67 (-.08%) at 15,294.50. S&P500 fell to 1,635.53 then recovered some to close down only 4.84 (0.29%) at 1,650.51.

Down? Did I say "down"? Yes. Well, how down?

Dow as in "broke the ascending trendline beneath." Down as in "scared the 20 day moving average" (now 15,085 and 1,630). Down, as in broke.

Y'all bear in mind that stocks compose a huge market, and usually don't turn very fast, crash only seldom, so this is liable to unfold slowly. Mmmm . . . come to think of it, if it DOESN'T unfold slowly that would be even worse news for stocks.

Y'all listen, now, and don't forget this no matter what market it is, stocks, gold, silver, bananas: stocks have gained over 15% this year. That ain't normal. When you see performance like that, run the other way, cause a break is coming.

Durn! I'm trying hard not to be mean and crow, but I'm just not succeeding. I'm trying to rein in my grin and keep reminding myself "One day up, next day down, guard your equanimity" but it's just not working. I've been spitting out black crow feathers for the better part of a month, and it feels right good to be on the right side today. I had to cough up all that before I look at the Dow/Gold and Dow/Silver charts or I'd never stop crowing.

Dow in gold fell 0.205 oz (G$4.24 gold dollars) to 10.987 oz (G$227.12). In itself this may not sound significant, but it gapped down thru the uptrend line. Broke clean through it.

Dow in silver scraped off 1.65 oz or 0.24% to end at 679.94 oz ($879.09 silver dollars). Let's take a look at that chart -- Well, what have we here but another broken trend line.

Crowing and cackling aside, these are the sort of breaks that ought to follow through lower, and, of course, they need that confirmation. Reason all this mattereth so largely is that the Dow/Gold and Dow/Silver are quite reliable indicators of the direction of metals against stocks. They are saying that metals are about to gain a lot of value against stocks.

US dollar index took a body blow today. Lost 58.4 basis points (3/4%) to 83.70 and has broken its sharp uptrend line, but that might mark nothing more than a routine correction.

Yen gapped up 1.16% to 98.13 cents/Y100. Stocks fall, yen riseth. (Y'all reckon the hot money has been borrowing yen on Abe's promise he would keep on cheapening them and buying stocks with the proceeds? If so, the hot money got hotter today.) Euro rose 0.6% to $1.2933, not terrible far from the 200 dma at $1.2986. Has the dollar turned down?

I looked at those gold and silver Comex warehouse inventory charts on Nick Laird's, and sure enough, gold inventories have dropped sharply (ca. -18%) this year, although silver has not.

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.