Tuesday, June 11, 2013

The Gold Price Closed Down $9.20 at $1,377

Gold Price Close Today : 1377.00
Change : -9.20 or -0.66%

Silver Price Close Today : 21.645
Change : -0.276 or -1.26%

Gold Silver Ratio Today : 63.617
Change : 0.381 or 0.60%

Silver Gold Ratio Today : 0.01572
Change : -0.000095 or -0.60%

Platinum Price Close Today : 1479.00
Change : -26.70 or -1.77%

Palladium Price Close Today : 750.75
Change : -16.90 or -2.20%

S&P 500 : 1,626.13
Change : -16.68 or -1.02%

Dow In GOLD$ : $227.02
Change : $ (0.23) or -0.10%

Dow in GOLD oz : 10.982
Change : -0.011 or -0.10%

Dow in SILVER oz : 698.64
Change : 3.48 or 0.50%

Dow Industrial : 15,122.02
Change : -116.57 or -0.76%

US Dollar Index : 81.092
Change : -0.597 or -0.73%

Silver and GOLD PRICES remain locked in a short term downtrend. The SILVER PRICE lost 27.6 cents (1.26%) today to close at 2164.5c. Gold price lost $9.20 (0.66%) to $1,377.

Silver and gold are following the same pattern with this little short breakout above the downtrend (from April) line that they followed on a larger scale with the 2012 breakout above the major downtrend line. They broke out, then instead of following higher through slid down the downtrend line.

I am mildly curious because they didn't both fall immediately further after Friday's drop. That suggests a small number of sellers. I want to say, "Expect lower prices," but then I look at the Bollinger Bands and see both metals at the bottom of the range. That comes with no guarantee they won't fall further, of course, but does say that they're oversold for the range they've been trading in lately.

Y'all be patient, be patient. Silver and gold prices remain in a bull market (primary uptrend) and should put in their last low for this move in June. Don't let the central banks sucker you about their intentions: they WILL inflate, and they will inflate MORE.

From time to time people ask me what is the prospect of deflation rather than inflation. Usually they are prompted by one of Harry Dent's email offers for his newsletter. Now I am only a natural born fool from Tennessee and no economist, and Harry Dent has probably forgotten more than I will ever know, but on this point, I respectfully believe he errs.

What has been the Fed's response to financial crisis so far, and that of every other central bank? Print more money.

Bernanke fears deflation more than Harry Dent does. Read his November 2002 speech. All central banks fear deflation, like Superman fears Kryptonite and roaches fear Raid. That's why they turn on the inflation floodgates.

"Inflation" is NOT rising prices, but an increase in the money supply that usually causes prices to rise. "Deflation" is not falling prices, but a reduction in the money supply which usually causes prices to fall. Inflation and deflation are a CAUSE, rising or falling prices the EFFECT.

America must have the highest "goofs per capita" rating of any nation outside Antarctica. Americans seem actually to believe that all this spying on Americans is new. Where have they been? More than 20 years ago a policeman friend in a major city police force was telling me about surveillance devices they were getting from the yankee government that could listen to your conversation through an apartment wall 200 yards away. It would take me the better part of an hour to list all the other surveillance tricks they use that I know about, and I'm ignorant as a toad (but have fewer warts). Did anybody really believe that if government were given such such power they wouldn't use it -- on us?

Those who live by inflation will die by inflation. Stocks have been roaring and soaring on quantitative easing, a.k.a., printing money, from central banks around the globe, but yesterday the Japanese equivalent of the Fed's Open Market Committee met and didn't do anything, specifically, nothing about the rising interest rate on Japanese government bonds. Whoo! Investors thought, No more inflation, no more rising stock market -- I'd better sell my stocks. Japanese Nikkei stock index went poured over the edge, falling 1.45%. That set off a cascading waterfall of stocks that followed the rising sun around the earth-ball. Hong Kong fell 1.2%, European markets fell 0.9 to 1.4%, and investors everywhere reached for their wastebaskets for a nice, comforting puke.

In the US, the Dow Jones Industrial Average splashed down the rocks 116.57 (0.76%) to 15,122.02. S&P500 poured out 16.68 (1.02%) to end at 1,626.13. Today brings both indices back near or slap on their bottom trading channel line of support, and near their 50 day moving averages. S&P500 might fall to 1,540, Dow to 14,500. Let me make clear that I don't believe we have yet seen the ultimate peak for stocks. That should come later this year. Most important for y'all to remember is that stocks remain in a primary downtrend (bear market) and this is a bear market rally only. Worse yet, it's the peak of a 300 year cycle. Think John Law, Mississippi Bubble, and 1720.

Dow in gold slid today to touch its 20 DMA and lost 0.1% to 10.982 oz (G$227.02 gold dollars). Dow in Silver rose 0.5% (3.48 oz) to 698.64 oz. Gravity continues to make its influence felt.

Y'all have got to admit this "they-will-inflate/they-won't- inflate" daisy the central bankers have the public pulling is pretty clever. They are pushing markets around without any work at all. Fact is, they have climbed on an inflation tiger, and now they can't climb off without taking a mauling, chewing, and clawing.

US dollar index fell 0.77% or 59.7 basis points to cling by its fingernails to a ledge just above 81.00, namely, 81.092. Dollar index has now reached the point of no return. Either it must hold at 81.00 and turn up, or it will sink much, much further. This 81.07 level is also the 200 DMA, and this makes the third time the dollar index has tapped on it. Odds are right strong the dollar will fall through.

Yen was the chief beneficiary of the Bank of Japan's inaction. It rose 2.9% to 104.15 cents/Y100. It reversed a previous key reversal, a very rare event and more proof that nobody should every trade currencies because there's just no telling what governments or central banks might do.

The euro picked 0.42% out of the dollar's pocket and closed at $1.3313. 'Pears set to strike $1.3500.

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.