Wednesday, April 30, 2014

The Gold Price Must Climb Over $1,305 to Confirm Last Week's Lows

30-Apr-14PriceChange% Change
Gold Price, $/oz1,295.60-0.40-0.03%
Silver Price, $/oz19.12-0.37-1.89%
Gold/Silver Ratio67.7651.2631.90%
Silver/Gold Ratio0.0148-0.0003-1.86%
Platinum Price1,426.60-3.50-0.24%
Palladium Price812.654.600.57%
S&P 5001,883.955.620.30%
Dow in GOLD $s264.550.810.31%
Dow in GOLD oz12.800.040.31%
Dow in SILVER oz867.2418.752.21%
US Dollar Index79.56-0.33-0.41%

The GOLD PRICE fell to $1,284.90, but recovered to end the day only 40 cents lower at $1,295.60. Silver traded as low as 1908 cents and ended down 36.9 cents at 1911.9c.

Sorry I missed sending y'all a commentary on Monday and Tuesday, but I was finishing up my monthly Moneychanger newsletter for paid subscribers, then yesterday evening had to drive up to Cookeville to pick up some hardy kiwi plants.

On a three day chart the GOLD PRICE today made a double bottom with yesterday's $1,386.10 low and recovered nearly to yesterday's close. This ain't great, but it's not Waterloo, either. Large bets had been placed on what the Fed would say today, by which I mean large shorts. They drove the gold price down, but couldn't keep it down. That recovery is positive, but not closing above yesterday is not. We'll just have to see how it shakes out tomorrow. Notice also that the last two days' lows were higher than last week's lows. The gold price, however, has balked at $1,305 and must climb over that to confirm last week's lows.

The SILVER PRICE, ahh, the silver price. Low today was higher than last week's, but chart looks crummy. Off last week's dramatic bounce silver hit the downtrend line and 20 day moving average, but couldn't hold on above either one. Now silver must cross 2000c to regain credibility. Ratio rose today to 67.765:1, more proof of silver's relative weakness. All of that, of course, may be construed as an argument to buy silver rather than gold right now.

By the way, silver did make a double bottom today, at 11:30 and 3:30 p.m. Not much, but . . .

Folks, consider this. Things are far too calm, far too quiet, which means complacency reigns universally. And complacency cometh before a crisis. I can't help it, I'm suspicious, because I just don't believe things are that good, certainly not good enough to warrant complacency.

But then, I'm only a nacheral born durned fool from Tennessee.

All kind of news broke while I was away. I heard on National Proletarian Radio that President Obama is levying sanctions on Los Angeles to keep Donald Sterling out of the Ukraine and Russians out of the NBA.

And I had disremembered the FOMC meeting announcement today, so as I was travelling I checked the gold and silver prices I was dismayed to see them lower. When I found out about the FOMC announcement I was relieved, because the up and down was merely more of the same moronism that inevitably results from central banking and government economic meddling. Thus, it is to be ignored as feckless fiddling with things at the margin.

Truth is, if the FOMC blarney cannon shot doesn't have any more affect than today's, they need bigger shells or grapeshot. Our Masters at the Fed were very careful not to say much except that they would taper another $10 billion a month. Before the FOMC pontificated, first quarter economic statistics had already appeared in surprising (to the experts) weakness. That had taken the dollar down, and supports the conclusion that the Fed must suppress interest rates longer. Bingo, down came the 10 year Treasury note yield, which brought down the interest rate differential between the buck and the other two disgusting scrofulous fiat currencies and in turn sent the euro and yen up. Not even stocks were much moved by the FOMC's decree, rising about 0.3%. Here's more detail.

Stock indices rose across the board, but not much. Dow climbed 45.47 (0.3%) to 16,580.84 while the S&P500 scaled 5.62 (0.3%). That was enough to close both slightly above their reigning downtrend lines, but whether that's meaningful or not we'll see tomorrow. May's the time I expect the last peak in stocks.

Dow in metals aren't saying much. Dow in Silver has formed a bearish rising wedge, but is still moving up. Rose 1% today to 849.27 oz (S$1,098.05 silver dollars). Dow in gold remains in a downtrend, but is blowing hot and cold out of both sides of its mouth.

US dollar index fell 0.42% or 33 basis points to 79.56. It has nearly reached again the April low at 79.385. Falling through that would be cosmic bad taste, and take the dollar much lower. Euro and the yen just rose the same amount the dollar fell. Yen ended at 97.92, up 0.49% and the euro at $1.3870, up 0.43%.

Aurum et argentum 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.