Wednesday, November 20, 2013

The Gold Price Dropped Below the October $1,251 Low

Gold Price Close Today : 1257.90
Change : -15.50 or -1.22%

Silver Price Close Today : 20.050
Change : -0.276 or -1.36%

Gold Silver Ratio Today : 62.738
Change : 0.089 or 0.14%

Silver Gold Ratio Today : 0.01594
Change : -0.000023 or -0.14%

Platinum Price Close Today : 1397.80
Change : -20.30 or -1.43%

Palladium Price Close Today : 713.65
Change : -7.95 or -1.10%

S&P 500 : 1,781.37
Change : -6.50 or -0.36%

Dow In GOLD$ : $261.31
Change : $ 2.11 or 0.81%

Dow in GOLD oz : 12.641
Change : 0.102 or 0.81%

Dow in SILVER oz : 793.06
Change : 7.51 or 0.96%

Dow Industrial : 15,900.82
Change : -66.21 or -0.41%

US Dollar Index : 81.065
Change : 0.528 or 0.66%

The GOLD PRICE broke today before the FOMC minutes were published. At Comex close it had been stripped of $15.50 (1.2%) to end at $1,257.90. However, in the aftermarket it dove another $17.5 (at one point it was $1,240.20), a maximum intraday loss of 2.5%

The SILVER PRICE was down 27.6 cents or 1.35% to 2005c at Comex close, then lost another 18 cents in the aftermarket. As I write Gold is back up to $1,244.80 and silver to 1992c.

Looking over the shoulder of other investors' shoulders is a lot like cheating on a test in high school. Before you do it, you'd better make sure the fellow you're cheating from knows more than you do. With that warning, however, I watch some of my customers who seem usually to make exceptionally good decisions. Several showed up buying today and one remarked casually, "Gold and silver look cheap to me." I wouldn't use that for a rope to swing over hell on, but it's worth noticing.

Specifically the GOLD PRICE dropped below the October $1,251 low on an intraday basis, not to mention ending the day down there. Now there's a line of support that runs from that low today through the October low back to the August low all the way to the April low. So there's some support there, But gold would have to hang on here, not fall any lower, and begin climbing within a couple of days to validate that. that.

Silver broke a similar support line today, which technically points silver toward the last low at 1910 or even the June low at 1817c.

This may sound crazy here, but silver does lie within that November window where lows occur. Hardest part of parsing markets is keeping yourself from being seduced by other people's opinion. Right now, the world seems universally bearish on silver and gold. Whenever opinion is that unanimous, our fingers ought to start itching, searching for a place to pull that reversal trigger. Besides, seasonally December is usually an up month.

Today the Fed released the October FOMC minutes which said they MIGHT reduce the $85 billion monthly bond purchases "in coming months." That propped up the dollar while it knocked stocks, gold, and silver in the head.

Apparently the public really believe that Fed QE really is good for the stock market long term, at least they are spooked by any hint of tapering. Today the Dow lost 66.21 (0.41%) to 15,900.82 while the S&P500 slipped 6.5 or 0.36% to 1,781.37.

While divers pundits ascribed this stumble to the FOMC minutes/taper threat, I remind y'all this started not today but three days ago when the Dow made its new all-time high but the other indices fell. The cause and the apparent cause are not always identical. This sets stocks up for a longer correction. Expect lower prices for the next couple of weeks, BICBW.

The stock plunge didn't help the Dow in Silver or the Dow in Gold, since both metals plunged further themselves. Dow in gold closed up 0.08% at 12.645 oz., above its June high at 12.514 for the second day. Dow in silver added 0.96% to close 793.06 oz, still below the June 816.77 high. Long as those are rising it will be tough for silver and gold to turn around. However, both indicators are severely overbought, DiS worse than DiG.

That bull flag in the US dollar chart I mentioned yesterday snapped into action today. On the taper rumor the dollar index leapt 52.8 basis points or 0.68% to 81.065. That carries the dollar above crucial 81 resistance and to the downtrend line from the September highs. Once it crosses that line, as probably will tomorrow, it will race for 82.50 - 83.

Euro fell out of that rising wedge with a boom. Tumbled 0.75% to $1.3435, below the 20, 50, and 62 day moving averages. Down, down points the chart.

Yen rose 0.2% today to 100.04, but that only brought it to the downtrend line that has ruled since mid- October. If the yen intends ever to rise, it gives no hint, not even in its body language.

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.