Gold Price Close Today : 1349.00
Change : 3.80 or 0.28%
Silver Price Close Today : 22.946
Change : 0.490 or 2.18%
Gold Silver Ratio Today : 58.790
Change : -1.114 or -1.86%
Silver Gold Ratio Today : 0.01701
Change : 0.000316 or 1.89%
Platinum Price Close Today : 1477.40
Change : 18.00 or 1.23%
Palladium Price Close Today : 748.95
Change : 2.45 or 0.33%
S&P 500 : 1,763.31
Change : -8.64 or -0.49%
Dow In GOLD$ : $239.34
Change : $ -1.62 or -0.67%
Dow in GOLD oz : 11.578
Change : -0.078 or -0.67%
Dow in SILVER oz : 680.67
Change : -17.60 or -2.52%
Dow Industrial : 15,618.76
Change : -61.59 or -0.39%
US Dollar Index : 79.767
Change : 0.159 or 0.20%
Silver and GOLD PRICES rose sharply, anticipating the FOMC's decision to continue gutting the US dollar. This was rational, and accorded with cause-and-effect. Silver closed up 49 cents to 2294.6 while gold rose $3.80 to $1,349. Gold actually hit $1,357, but then as soon as the FOMC announced, it fell to $1,343 ish and silver to 2268c. This was irrational.
No doubt 0.8 nanoseconds after the Fed's announcement SOMEbody sold 2,500 futures contracts in silver and gold. No need even to look.
But forget all that -- the fall may even have been natural. Much more important is the new low close for the move by the GOLD/SILVER RATIO at 58.790.
Behold! The GOLD PRICE remains above its $1,341.74 50 DMA and silver above its 2251c DMA. Lo! The MACD for both points up. Rate of Change for both is up and trending up.
The gold price keeps grinding stubbornly toward that $1,400 neckline and the SILVER PRICE toward 2500c.
Yet people are afraid to buy. I reckon they want to wait for confirmation at $1,400 ($50 higher) or $1,550 ($200 higher). Me, I'm already biting at them.
Travelling on 9 October, the day it was announced, I missed commenting on Janet Yellen's nomination to be Head Criminal at the Federal Reserve. My first, well- reasoned response was, "Oh, ****!" But then, it comes as no surprise after Bernanke's unprecedented money creation spree that O'Bama would appoint the most rabid inflationist around to serve as Co-ordinator of National and International Looting and Lying.
What doth this mean for us peasants? That the best friend gold and silver have is about to become Fed Head. Why best friend? Because only one thing drives a silver and gold bull market: Monetary Demand. And Monetary Demand is driven by central bank money printing, and the Printer in Chief is about to take charge.
Speaking of the Federal Reserve, the midgets of the FOMC met today and took their shaky hands off the controls. "We ain't doing a THING!" they said, wary lest the shatter fragile markets. "We're just a-gonna keep on creating $85 billion a month."
As expected, the news announcement hit stocks upside the head and made 'em stumble. Gold rose going into the FOMC, but then fell off after the announcement. That, of course, makes no more sense than buying a tuxedo for a hog, but let's ignore rational fastidiousness and look closer.
Now I don't know a blasted thing, being just a barefoot natural born fool from Tennessee (and I tell y'all truly I have an attorney from Alabama who walked around in the courtroom in his stocking feet), but if I owned stocks I'd be puking in my wastebasket or sell it all. First, there's that peaking margin debt, highest since 2007. Next are all those rising wedges on every index chart. Third, following the example of the S&P500, the Nasdaq Comp, Nasdaq 100, Russell 200, and Wilshire 5000 have all "thrown over" their upper trendline, and today backed off sharply.
At the very least, this leg has ended and stocks are in for a correction. Most indices posted first half of a Key Reversal today with a break into new high territory and a lower close. Another lower close tomorrow pounds nails into the coffin.
Dow dropped 61.59 (0.39%) to 15,618.76 while the S&P500 lost 8.64 (0.49%) to 1,763.31. Both Dow in Gold and Dow in Silver dropped below their 20 day moving averages.
Meanwhile, violating once again all reason and the law of cause and effect, the US dollar rose on the FOMC's news that it intends to keep on depreciating the dollar for the foreseeable future. Gained 15.9 basis points to end at 79.767, up 0.2%. Gapped up on the news, by the way. Both the competitors, Yen and Euro, fell. Yen ended at 101.47 cents (-0.38%) while the euro lost only 0.06% to $1.3738.
Looking at a longer term chart, if the Dollar breaks 79.00, nothing stands ready to catch it before 73. But it appears to have made a little V-bottom with a low at 79.06, and has risen up to the trend line it last broke. That makes it "fish or cut bait" time for the dollar: it needs to rise through that line. More, it needs to prove it can get through 81 to offer any ground to believe it is not about to plunge.
On 30 October 1890 the US congress passed the Sherman Silver Purchase act. Since the Crime of 1873 when silver had been surreptitiously demonetized, worsening the post-war deflation, farmers and miners had been agitating for unlimited coinage of silver. This act, however, didn't grant that. It increased how much silver the government purchased, and that did that with Treasury Coin notes redeemable in either silver or gold. People cashed the notes for gold, threatening the government's gold reserve, so in 1893 the act was repealed. That's why it's fairly easy to find the Morgan silver dollars with dates from 1878 to 1892, but the 1893s are nearly impossible to find.
Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.
- Franklin Sanders, The Moneychanger
© 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 or 18 ounces of silver. or 18 ounces of silver. US $ and 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.