Friday, June 07, 2013

Silver and Gold Prices Remain in Bull Market and the Only Beneficiaries of Inflation

Gold Price Close Today : 1,383.00
Gold Price Close 24-May-13 : 1,392.60
Change : -9.60 or 0.69%

Silver Price Close Today : 21.74
Silver Price Close 24-May-13 : 22.23
Change : -0.49 or -2.2%

Gold Silver Ratio Today : 63.61
Gold Silver Ratio 24-May-13 : 62.65
Change : 0.96 or 1.53%

Hard week for silver and GOLD PRICES (losing 2.2% and 0.7% respectively) and the US dollar index (lost nearly 2%). Oddly, in the teeth of all the pressure on silver & gold, platinum & palladium advanced. Stocks rose nearly 1%, after a bad break last week.

I reckon gold didn't eat its Wheaties today, falling out of bed GOLD PRICES plunged $32.70 (2.3%) to $1,383 and silver crumbled 96.4 cents (4.2%) to 2173.7.

Strange thing is that both stayed above & outside the downtrend line from the April highs. That seems to make little sense because today's break calls for another leg down. Only closes above $1,425 & 2350c would gainsay a further drop coming.

Gold was rocking along about $1,410 today until 10:30, which was I suspect when the unemployment numbers were announced. Dropped in a single swoop to $1,385, then edged off a little more to a $1,378 low & flat lined.

The SILVER PRICE played out the same way, but differs from gold. While gold at $1,383 is a long ways above its April $1,320 low, silver broke its recent 2200c support, and closed down there. This resembles swimming with an anvil.

Well, it's June, the month when silver generally makes a low, often its low for the year. This should come next week. I don't expect to see prices lower than 1950c and $1,320.

Disappointing? Yes, but 'tain't like Bernanke has repealed the Law of Gravity. Y'all can keep slugging this inflation-whiskey all you want, but the hangover will be mighty rough. Silver & gold prices remain in a bull market, and will end up as the ONLY beneficiaries of that inflation. Wait and see. Truth is the daughter of time. Eyes on the horizon.

It's the age of hot money whipsaw, wheeling into and out of markets on the turn of a news report, however trivial. Don't think in terms of "investments" any more -- think in terms of "fifty bucks on No. 10 black." You'll get closer to the reality.

Yesterday I expected the Dow & S&P500 to rally back to their downtrend lines at 15,200 & 1,640, I just didn't expect them to do that in a single day. Markets are drunk on Ben Bernanke's daisy -- yes, he will inflate more, no, he won't. Every dribble of news is interpreted in that light, & today's jobs report -- more jobs but unemployment rate up -- was interpreted as meaning Bernanke must keep inflating, which, according to the loony logic regnant, means that stocks will rise. Monday bad news will probably dribble out that will drive both indices down the same amount, who knows?

We do know that stocks are presently correcting a long up move, & will most likely move further down before resuming their rally. The top that will follow toward the end of the year or early next year will mark the top of a 300-year wave (yep, that's back to the beginning of the 18th century) that has carried stocks up. What do y'all reckon the decline following will look like?

After closing below their 20 day moving averages yesterday, the Dow & Silver & Dow in Gold both turned around & closed above. Dow in Gold rose 3.8% to 11.025 (G$227.92 gold dollars). Dow in silver rose 5.9% to 701.48, a marginal new high. Last high was 699.48 oz. Clearly more work to be done here.

US Dollar Index did no more than bounce like a dead cat, up 9.1 basis points to 81.676. Hopes of an uptrend are hopelessly demolished. Unless something big comes to rescue the dollar, it's searching for some number below 81, maybe as low at 79.

Yen gave back 0.47% today after yesterday's mighty lunge through its 50 DMA. Closed at 102.51 cents/Y100. Maybe Bernanke and the rest of his global criminal syndicate of central bankers have drunk their fill of the Japanese depreciating the yen.

Euro backed off 0.2% after yesterday's large gain, but still looks stet to reach for $1.3500.

US$1=Y97.55=E0.7565=0.046 005 oz Ag=0.000 723 oz. Au.

Y'all enjoy your weekend!

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.