Wednesday, January 08, 2014

Silver and Gold Prices Find Themselves Fighting Over Familiar Ground — Gold Must Hold Above $1,220

Gold Price Close Today : 1225.30
Change : -4.10 or -0.33%

Silver Price Close Today : 19.518
Change : -0.247 or -1.25%

Gold Silver Ratio Today : 62.778
Change : 0.577 or 0.93%

Silver Gold Ratio Today : 0.01593
Change : -0.000148 or -0.92%

Platinum Price Close Today : 1412.20
Change : -0.50 or -0.04%

Palladium Price Close Today : 737.40
Change : -3.40 or -0.46%

S&P 500 : 1,837.49
Change : -0.39 or -0.02%

Dow In GOLD$ : $277.74
Change : $ -0.22 or -0.08%

Dow in GOLD oz : 13.436
Change : -0.011 or -0.08%

Dow in SILVER oz : 843.46
Change : 7.09 or 0.85%

Dow Industrial : 16,462.74
Change : -68.20 or -0.41%

US Dollar Index : 81.180
Change : 0.170 or 0.21%

Silver and GOLD PRICES find themselves fighting over familiar ground. The gold price dropped $4.10 (0.3%) to $1,225.30 while silver lost 24.7 cents (0.13%) to 1951.8c.

Today changes nothing and adds no new insight. The gold price remains above its 20 DMA and in the uptrend begun on 31 December. Gold has drawn a falling bullish wedge and broke out of that, and the breakout remains above the wedge's upper boundary line. Touched off it today.

The SILVER PRICE shows a similar wedge, and a like performance. Not counting the 1872c thin market low on 31 December, silver is in an uptrend with a lower boundary rising through its December lows. However, it teeters on the edge. Really can't close below 1940c and gold must hold on above $1,220.

It's all one big wheezy deal, and how it turns out is anybody's guess. Balance of proof they have bottomed remains on shoulders of silver and gold, and can only be borne by rising to higher prices.

It's amazing how much power printing money out of thin air gives you. For a while, you can even suspend the law of cause and effect.

Extent of that power was seen today when the mighty stock market wilted at the hint in the Federal Open Market Committee's notes of its last meeting that it might, someday, somehow "taper." This taper handle turns out to be the best tool for manipulating public opinion since terrorism was invented.

Clearly, by its money printing the Fed has placed a floor under stock prices. Everybody knows it, that's why they wilt at the magic word "taper." 'Twill be hard to resist the pull of this magic.

Excepting the Nasdaq twins, stock indices fell across the board. Dow lurched down 68.2 (0.41%) to 16,462.74 while the S&P500 stumbled 0.39 (0.2%) to 1,837.49.

Just the chart, ma'am, and a syllogism. Definition: a downtrend is a series of lower lows and lower highs. Since 31 December 2013 Dow and S&P500 have posted lower lows and lower highs. Ergo, the Dow and S&P500 are in a downtrend, transitory and migratory as it may be. Whether this downtrend will be of the evanescent or long-lasting variety time has not yet revealed to us.

But stock's slide was not enough to lower the Dow in Gold and Dow in Silver, since metals dropped more than stocks. DiG ended at 13.44 oz, up a wee 0.07%. DiS jumped 1.25% to 843.81 oz.

US dollar index pulled away from its congestion today, rising 17 basis points (0,21%) to 81.18. 'Tis now reaching for the 200 DMA at 81.65. Crossing that will add gas to its tank.

Euro broke clean through the lower boundary of its rising bearish wedge and lost 0.30% to $1.3578. Needs one more lower close to cement the breakdown. Next support does not appear until $1.3295. Ow.

Yen changed its mind again today and fell back 0.24% to 95.38 cents/Y100. Japanese Nice Government Men don't want it to climb above that 20 DMA.

Ten year US Treasury Note yield ticked up today, 1.91% to 2.993%. Probably on "taper" news. Momentum remains upward, although at a glacial pace.

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.