Monday, December 02, 2013

The Gold Price Dove $28.30 or 2.3% Closing at $1,222.30

Gold Price Close Today : 1222.30
Change : -28.30 or -2.26%

Silver Price Close Today : 19.233
Change : -0.748 or -3.74%

Gold Silver Ratio Today : 63.552
Change : 0.963 or 1.54%

Silver Gold Ratio Today : 0.01574
Change : -0.000242 or -1.51%

Platinum Price Close Today : 1345.90
Change : -22.00 or -1.61%

Palladium Price Close Today : 712.40
Change : -5.60 or -0.78%

S&P 500 : 1,800.90
Change : -4.91 or -0.27%

Dow In GOLD$ : $270.74
Change : $ 4.84 or 1.82%

Dow in GOLD oz : 13.097
Change : 0.234 or 1.82%

Dow in SILVER oz : 832.36
Change : 27.27 or 3.39%

Dow Industrial : 16,008.77
Change : -77.64 or -0.48%

US Dollar Index : 80.889
Change : 0.336 or 0.42%

Silver and GOLD PRICES storm-tossed and tumbled today. The Gold price dove $28.30 (2.3%) and landed with a thud at $1,222.30. In the aftermarket it traded as low as $1,218.60, but since has climbed to $1,221. Silver slid 74.8 cents (3.7%) to close Comex at 1923.3 cents, but in the aftermarket kept sliding to 1907.5. Edged back up to 1915c.

Both silver and GOLD PRICES keep bouncing along the bottom of their Bollinger bands. Those show the upper and lower limits of "normal" price movements, based on the standard deviation of prices over the last 20 days. Idea is that about 95% of the expected readings will fall within that band, so when they fall outside that band, an extreme has been reached and suggests a reversal. For instance, last June gold and silver punched through their lower BB on the very day of the low. Both silver and gold are oversold, but "oversold" can persist quite some time.

Sometime soon here the gold and SILVER PRICE ought to bottom. Today might mark the first day of a waterfall lasting several days, or it cold turn around immediately, if only for a short bounce. Trying to call a low in a selling mania is like trying to call a top in a buying mania. Neither occupation promises a secure future. But sellers keep hitting silver and gold with less and less effect. Those holders who could be shaken out have mostly been shaken out. At some point any market runs out of sellers.

That point is fast approaching.

Remember, you have Important People on gold and silver's side: the Federal Reserve and all the rest of the world's central banks. Just wait for reality to catch up with their printing presses.

I read something today that freezes my blood, in Fred Hickey's Hi Tech letter. "The Fed has now accumulated $2.2 trillion of treasury securities and more than $1.4 trillion of mortgage backed securities, and its balance sheet is nearly $3.9 trillion, FIVE times the level in late 2008, when it began QE1. . . . The Fed now owns nearly half of all treasuries maturing between ten and fifteen years."

So the Fed has engineered a bubble in US treasuries, lowering interest rates nearly to zero so it made no sense for investors to buy anything but "risk-free" treasuries, except it turns out the Fed owns a vast amount of those treasuries. When interest rates rise, their value declines.

But that's peanuts and peanut shells, not the big issue. Bernanke has backed the Fed into a very narrow corner. They can't sell without precipitating a colossal deflation. But even if they could sell, who would buy all those treasuries, especially in a falling market?

The answer comes back: "Nobody." The bond bubble will deflate very quickly -- think "Pin-prick." And once those interest rates start rising, banks will begin pulling those reserves out of the Federal Reserves' hands, where they have been sequestered and "sterilized," say, Oh, roughly $2.5 trillion. And that $2.5 trillion, when the banks loan it into the money supply, will increase, Oh, say, ten-fold.

Blood in the streets inflation does not begin to describe the catastrophe Bernanke has made possible. Better pray it doesn't come.

Okay, I just report this stuff. Friday the Dow made a new intraday high for the move (16,174.51) yet closed the day lower. Today it dropped again and closed lower again. That describes a completed key reversal. The S&P500 completed the selfsame pattern. That foretells lower prices, immediately.

All stock indices closed lower today. Dow dropped 77.64 (-0.48%) at 16,008.77. S&P stumbled 4.91 (-0.27%) at 1,800.90. Breaking those round numbers 16,000 and 1,800 tomorrow will panic the lemmings.

But what do I know? I'm just a natural born fool from Tennessee, and I climb trees in my bare feet to get a better grip on the trunk.

Dow in Gold kept on rising today since gold fell more than stocks. Ended the day at 13.10 oz, up 1.92% (G$270.80). Between the June peak at 12.514 (G$258.67) and 15.722 oz (G$325) lies a swamp of resistance. Stocks will have to begin falling faster than gold to turn the DiG around.

Dow in Silver hit 82994 oz, up 3.19%. Both the DiS and DiG are severely overbought. Next big move is will be gravity-directed.

Bad economic stats in Europe today sent the euro down, which, being translated, means "sent the dollar up." Dollar might also have benefitted from stocks' trouble. Anyway, the dollar gained 27 basis points (0.34%) to 80.93. This brought the dollar back from the brink of the well, and it closed over its 20 DMA (80.88), but barely. Nearly reached the upper boundary trading channel boundary. It must break through that merely to have the chance to rally, and could just as easily break down. Tomorrow may tell.

Yen extended its Niagara begun in November. Lost another 0.5% today to 97.15 cents/Y100. Becoming right oversold, but how can you reliably apply charts to currencies, which are routinely manipulated by central banks? Only as a general guideline, and watching to see if the central banks are losing control.

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.