Monday, June 17, 2013

Silver and Gold Price Lows Came Back in April

Gold Price Close Today : 1382.80
Change : -4.50 or -0.32%

Silver Price Close Today : 21.757
Change : -0.196 or -0.89%

Gold Silver Ratio Today : 63.557
Change : 0.362 or 0.57%

Silver Gold Ratio Today : 0.01573
Change : -0.000090 or -0.57%

Platinum Price Close Today : 1434.10
Change : -12.40 or -0.86%

Palladium Price Close Today : 716.30
Change : -13.50 or -1.85%

S&P 500 : 1,639.04
Change : 12.31 or 0.76%

Dow In GOLD$ : $226.93
Change : $ 2.37 or 1.06%

Dow in GOLD oz : 10.978
Change : 0.115 or 1.06%

Dow in SILVER oz : 697.70
Change : 11.22 or 1.64%

Dow Industrial : 15,179.85
Change : 109.67 or 0.73%

US Dollar Index : 80.617
Change : -0.166 or -0.21%

Before we talk about silver and GOLD PRICES, let's look at the GOLD/SILVER RATIO. You'll
see it has formed a rising wedge -- "bearish," because it usually breaks down. And a FALLING gold/silver ratio means RISING silver and gold prices. More, the ratio is working off an extremely overbought condition earlier this month.

That's just one witness that is making me very nervous about expecting lower silver and gold prices. Sentiment indicators and Commitments of traders are at historic lows, the levels from which rallies begin, not avalanches. That divergence might persist a while, but not forever, and not long.

Silver and GOLD PRICES are shuffling down the hall with the valium droop, meandering back and forth in the same small range. Gold gained $9.70 Friday, then lost $4.50 today to end at $1,382.80. SILVER PRICES added 37.1 cents on Friday, lost 19.6 today, and wound up at 2175.7c. Today silver had a 22.3 cent range. Yo! Somebody put a mirror under silver's nostrils to see if it fogs.

Wait a minute! What's that on the silver chart? I believe that is a "bullish" falling wedge. If 'tis, twould forespeak a silver rally.

Markets love to do the opposite of what everybody expects. With most of the known universe (and most of their relatives) negative now on silver and gold, at the season Nobody expects silver and gold to rally, what would catch more people by surprise than a rally? Whether that happens or not, I can't see silver or gold falling much further. In fact, until the price gainsays it, I will continue to assume that the price lows came back in April.

It's not precisely clear what stocks have in mind. Friday the Dow lost 105.90, today gained 109.67. Either they are burning up buying power on the way to lower prices, or they are turning up again.

Today the Dow rose 109.67 (0.73%) to 15,179.85. S&P 500 rose a little more, 0.76% (12.31) to 1,639.04. The S&P500 stands a bit above its downtrend line and today pierced but closed not above the 20 day moving average (1,640.74) [Someone asked me why I watch the 20 DMA. Because it's the first tripwire of a turn.] Industrials did the same. Remember both are bouncing off touching their 50 DMA, which might have completed their little correction.

Dow in Gold and Dow in Silver moved sideways in the same vexing range. Dow in Gold ended at 10.978 oz (G$226.93), up 1.06%. Dow in silver climbed 11.22 oz to 697.7 oz, up 1.64%. Just wait. It's like an anvil you throw up in the air. It rises and rises, then slows down, seems to hesitate, and drops right back on your face -- unless you're quick enough to jump out from under it.

The Federal Reserve Open Market Committee meets this week and makes an announcement on Wednesday. Now think -- does Bodacious Ben REALLY want to announce they are curtailing inflation and so hammer a giant wooden stake in the stock market's rising heart? Or would he rather mumble Greenspanese that will at least sound like he will print more money, while saving face lest he be accused of fomenting hyperinflation. Y'all tell me what he'll do. I'll tell y'all that speculators are buying Portuguese and Irish bonds, which are only a tad better than Paraguayan defense bonds, anticipating the Fed will announce more inflation, 'cause more dollar inflation will make even the euro and Portuguese and Irish bonds look good.

I must have been holding that US dollar index chart the wrong way. I held it upside down today and noticed an evident and lethal broadening top. Owch. Dollar index closed down ANOTHER 16.6 basis points (0.21%) today to 80.617, it's sixth lower closing in a row. Any close lower than 80.50 leaves the dollar index below the broadening top's bottom boundary and pointing to 79.5 very quickly.

On the other hand, momentum in the yen and euro seems to be slowing. Both have formed rising wedges in the last two weeks. "Rising wedge" is usually preceded by "bearish" because it regularly resolves by breaking out downward. Yen fell 0.54% to 105.84 cents/Y100 while the Euro rose 0.145 to $1.3365.

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.