Thursday, December 12, 2013

The Gold Price Closed Down $32.50 to $1,226

Gold Price Close Today : 1262.40
Change : -32.50 or -2.51%

Silver Price Close Today : 19.402
Change : -0.896 or -4.41%

Gold Silver Ratio Today : 65.065
Change : 1.271 or 1.99%

Silver Gold Ratio Today : 0.01537
Change : -0.000306 or -1.95%

Platinum Price Close Today : 1363.50
Change : -20.80 or -1.50%

Palladium Price Close Today : 719.80
Change : -18.30 or -2.48%

S&P 500 : 1,775.50
Change : -6.72 or -0.38%

Dow In GOLD$ : $257.73
Change : $ 4.81 or 1.90%

Dow in GOLD oz : 12.468
Change : 0.233 or 1.90%

Dow in SILVER oz : 811.23
Change : 30.68 or 3.93%

Dow Industrial : 15,739.43
Change : -104.10 or -0.66%

US Dollar Index : 80.196
Change : 0.314 or 0.39%

I told y'all I was still braced for bad action in silver and GOLD PRICES, and today it hit. Things were rocking along fine until about 4:30 a.m. EST, late night even in London, when "somebody" slammed gold at $1,254. Whatever they hit it with, it gapped down to $1,245, stayed around there until New York opened, then from 8:30 to 10 declined and about 11:1.m. gapped down again to $1,225.

The GOLD PRICE closed Comex down $32.50 (2.6%) at $1,226.00 while the SILVER PRICE ended down 89.6 cents (4.4%) at 1940.2c.

Whew. What can you say about that?

A lot. First, the silver price stopped about where it made its low on 9 December, one day after what appeared to be a bottom. Next, it remains in an uptrend. It's true. But the Rate of Change turned negative with today's fall.

The gold price was also driven to its 9 December low, but remains above the support line. I don't know any more than y'all do what they will do tomorrow. After today's drop, odds say they will drop further, but we'll wait and let the market tell us.

Be calm. A year from now y'all will look like investing geniuses after silver and gold prices have rallied.

A reader describing himself as a "natural born fool from RI" asked me what in the world the US dollar index is all about and what in the world it means and why should he care. Here's why:

The US Dollar Index is an weighted index of the dollar's value against currencies of its most significant trading partners.   The basket of currencies contains the Euro, Japanese yen, British Pound, Canadian Dollar, Swiss Franc, and Swedish Kronor (why that, I don't know).  Here are the weights:

Euro, 57.6%

Yen, 13.6%

Pound sterling, 11.9%

Canadian dollar, 9.1%

Swedish Krona, 4.2%

Swiss franc, 3.6%.

The US dollar index takes into account not only changes in the dollar's value against one currency, but several, and so ought to give a fuller picture of the dollar's value.  Comparing the US dollar to the Zimbabwean dollar would give one the idea the dollar was very healthy, but a chart of the US$ in euros would give quite another idea.

The US Dollar Index offers a composite view of the dollar's value against its major trading partners.  It has traded as high as $164.22 in February 1985 and as low as 70.70 on 16 March 2008.

The US Dollar index double peaked in 2000 and 2001 at 121, and has been in a bear market (declining) ever since. Range since 2003 -2013 has been 92 to 70.70.    Range late 2009 to now has been 72.70 to 88.70.  Range last two years has been 78 - 85.  A drop below the support line now at about 80 would send it falling much further.

Since most of y'all live and trade with dollars every day, its change in value is fraught with significant effect upon your life. Also, the main competitors with the US dollar are silver and gold. Distrust in the dollar sends money fleeing into silver and gold, generally but not every single day. Thus watching the US dollar index clues us about gold and silver's future.


Woe is everybody. Lots of money went to money heaven today.

Stocks, for example, lost big again. Dow dropped 104.10 (0.66%) to 15,739.43. S&P500 followed right along, losing 6.72 (0.38%) to 1,775.5. Lo, both draweth nigh their 50 DMAs (15,640 and (1,760) as the decline begun on November's last day continues. Dow has already fallen back within its old trading channel, and the S&P isn't far from it, about where its 50 DMA stands (1,760).

Sharp drops in silver and gold today sent the Dow in Gold and Dow in Silver back up above their 20 DMAs. This disturbeth not the larger downtrend. DiG gained 1.56% to end at 12.85 oz (G$265.63 gold dollars). DiS rose 3.5% to 808.81 oz. Be calm -- they've turned down and in markets, unlike gravity, nothing rises or falls in a straight line.

Well, the US Dollar Index managed to rise today, up 31.4 basis points (0.4%) to 80.196, drawing away from that dangerous 80 support lie. This still ain't stellar, with the dollar index below its 50 DMA (80.38) and 20 DMA (80.61). Very hard to parse where the dollar is headed, but it's not really flashing strength. Indecision, maybe, but not strength.

Euro lost 0.25% to $1.3752 on the US dollar's "strength." It had almost reached the $1.3800 line.

Yen fell again today, down 0.92% to 96.72 cents/Y100, and to a new low for the move. Rotten outlook if it can't turn around from here.

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.