Friday, February 14, 2014

The Gold Price Soared $18.60 to Close at $1,319.00

Gold Price Close Today : 1,319.00
Gold Price Close 7-Feb-14 : 1,263.30
Change : 55.70 or 4.4%

Silver Price Close Today : 21.411
Silver Price Close 7-Feb-14 : 19.92
Change : 1.491 or 7.5%

Gold Silver Ratio Today : 61.604
Gold Silver Ratio 7-Feb-14 : 63.419
Change : -1.815 or -2.9%

Silver Gold Ratio : 0.01623
Silver Gold Ratio 7-Feb-14 : 0.01577
Change : 0.00046 or 2.9%

Dow in Gold Dollars : $ 253.18
Dow in Gold Dollars 7-Feb-14 : $ 258.44
Change : -5.27 or -2.0%

Dow in Gold Ounces : 12.247
Dow in Gold Ounces 7-Feb-14 : 12.502
Change : -0.25 or -2.0%

Dow in Silver Ounces : 754.49
Dow in Silver Ounces 7-Feb-14 : 792.88
Change : -38.39 or -4.8%

Dow Industrial : 16,154.39
Dow Industrial 7-Feb-14 : 15,794.08
Change : 360.31 or 2.3%

S&P 500 : 1,838.63
S&P 500 7-Feb-14 : 1,797.02
Change : 41.61 or 2.3%

US Dollar Index : 80.180
US Dollar Index 7-Feb-14 : 80.740
Change : -0.56 or -0.7%

Platinum Price Close Today : 1,428.50
Platinum Price Close 7-Feb-14 : 1,377.60
Change : 50.90 or 3.7%

Palladium Price Close Today : 737.40
Palladium Price Close 7-Feb-14 : 708.60
Change : 28.80 or 4.1%

This week was the week and today was the day for silver and GOLD PRICES. Gold broke through $1,300 yesterday and the shorts went skittering today as gold soared $18.6 (1.43%) to close at $1,319.00. Silver shocked even me, vaulting 102.6 cents (5.03%, yes!) to close Comex at 2141.1c.

Where to start? First, parallel markets. Platinum and palladium have been trending up for nearly two weeks. Platinum closed on its 200 DMA today while palladium stands way above all moving averages, i.e., momentum is skyward. Gold/Bank Stock Index spread, which rises when faith in the financial system is falling and vice versa, is rising. XAU, GDX, and HUI precious metals mining stock indices have all broken out upward and crossed above their 200 DMAs this week.

The GOLD PRICE very nearly broke upward through its since-August-2013 downtrend line this week, the chart shows a double bottom, other indicators are floating upward, and it has broken through its 20 week moving average.

The daily chart is just too beautiful to miss. Look here,
Gold Price Daily Chart —
The gold price hath climbed straight up from an upside-down head and shoulders up through the neckline, broken through old resistance from $1,290 - $1,300, and today closed above its 200 DMA for the first time since February a year ago.

Only problem with this picture is that it can leave us so giddy that we overlook that stochastic indicator that is flashing a warning. I don't think this rally has ended, but around $1,350 - $1,360 it will likely begin losing altitude. This rally has run since 31 December 2013.

Silver Price Daily Chart —
If gold sent the gold shorts skittering, the SILVER PRICE drove all the silver-shorts clean back into the woodwork and down in the basement.

Yesterday I said I'd be surprised if silver didn't close above 2050c today, but I was not prepared for today's explosion. Silver was pressed and packed against that April downtrend line and the tope of the range at 2050c, and when it burst through it couldn't stop until it punched clean through its 200 DMA and almost 2150c. That implies that before this rally ends silver will reach 2300c, maybe higher. Silver's weekly close today took it above the since-April 2011 downtrend line on the weekly chart.

Once more, be wary! Next week or two will likely be VERY heady in silver, but markets move up in waves, back and forth, pendulum-like.

And once more, the possibility exists but daily grows dimmer, that silver and gold might yet make one leg down to lower lows. I don't believe that will happen, but the possibility remains.

Meanwhile, I am buying.

Since anything I say about my competition is bound to sound invidious, I seldom say anything. However, I warn y'all that not everybody can be trusted. Many, many times in my almost 34 years in this business I have seen the big "players" and "cheap sellers" evaporate overnight.

The gold and silver industry works on very, very small margins, 3.5% to 1% commission, so there's a problem with "cheap prices": very little room to discount. Years ago Krugerrand Corporation in Florida (that location and California are a potential tip-off) figured out they could sell Krugerrands at a very cheap price if it didn't bother with actually buying them when it sold them to customers. Same business model as Bernie Madoff and Carlo Ponzi.

Just today a customer called and told us about a friend who had sent a large sum to a "cheap-selling" California dealer but now cannot get delivery. Before you do business with ANY gold or silver dealer, take a few moments to check them out with the unbiased Better Business Bureau.

Frankly, I have no ambitions to rank as "Cheapest Seller in the US" or "The WalMart of Silver and Gold." I know what it costs us to stay in business, and I know what sort of tailored, profitable, and professional guidance we give every customer, large and small. I figure "the workman is worthy of his hire," but if you don't, then go to the cheapest seller on the Internet and enter your order without ever talking to a human or getting any professional advice. And I hope you get delivery.

Before I forget it, let me remind y'all that if you ever expect to swap gold for silver at spot ratios above 60:1, you had better do it quickly. I recommend swapping gold for silver now, targeting a swap back at 31:1 or better.

WOW. What a week, and much of it happened today in metals! Stocks recovered this week, running toward their soon and ultimate top. US dollar index wilted. White metals also zoomed up.

US Dollar Index melted, falling through the uptrend line that had caught it since last November. Since mid-September it has range-traded from 81.60 to 79.75, and now is drawing close to that lower boundary. It also is nearing the downtrend line from September, same line it broke through upward as December closed. A fall through that line, which stands about at the bottom of the trading range, about 80, would foretell much pain. Today the dollar index lost 18 more basis points (0.22%) to end at 80.18.

Big gainer from the Dollar index's fall was the euro, which rose 0.15% to $1.3698, beating its head on the old uptrend line it fell through in January. I have it on my list to buy euros right after I have all my teeth pulled by an orangutan wielding wire pliers. I like to pile one killer pain atop another.

Yen hardly budged today, up 0.385 to 98.22 cents/Y100. Momentum is up, NGM's determination is down -- which do y'all think will win?

I note in passing that the 10 year US treasury note yield rose 0.37% today to 2.746%. It's skating above its 20 DMA, above its 200 dma, trading sideways. Better watch it. The Federal Reserve's house of cards begins trembling when it breaks above 3.1%.

STOCKS spent the last week recovering from their gigantic January fall. Dow gained 126.8 (0.79%) to 16,154.39, S&P500 clumb 8.8 (0.48%) to 1,838.63.

Mercy, y'all, this is a doomed effort. It can end sooner, or it can end later, but end it will by end-May. Oh, the weeping, wailing, and gnashing of profits! Please, protect yourselves.

Whooo! That Dow in Silver put some HEAVY sinkers on its line today and sank, sank, sank. Ended down 4.04% (31.72 oz) at 754.14 oz, breathing hard down the neck of the 200 DMA at 738.95 oz. Crossing below that will turn momentum unarguably down.

Dow in gold lost 0.62% to close at 12.25 oz (G$253.23 gold dollars). All indicators speak with one witness: DOWN.

Y'all enjoy your weekend!

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

© 2014, 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.