|Gold Price, $/oz.||1,291.70||1,245.60||-46.10||-3.6|
|Silver Price, $/oz.||19.388||18.653||-0.735||-3.8|
|Dow in Gold Dollars (DIG$)||265.76||277.44||11.68||4.4|
|Dow in gold ounces||12.86||13.42||0.56||4.4|
|Dow in Silver ounces||856.52||896.22||39.70||4.6|
|US dollar index||80.43||80.43||0.00||0.0|
The GOLD PRICE mislaid another $10.70 (0.85%) today and closed Comex at $1,245.60. Silver slumped 33 cents (1.74%) to 1,865.30.
Are the silver and gold prices destined to hit last June's lows ($1,180 and 1817c) again? Durned if I know, but if they don't stop here soon, they must suffer further humiliation.
The SILVER PRICE low today at 1864c matched the 1 May intraday low at 1868.5c. This is it, the bottom of the support range. Excuses don't count here, you either hold or die.
The GOLD PRICE low today at $1,241.80 lies not far from where a rough target measurement from the preceding triangle's height ought to take it (about $1,216). Besides that is the January low at $1,237.50.
Meanwhile, volume in silver is drying up, and in gold has fallen so low you wonder why any traders bother going to work any more. Normally declining volume signals that the trend is running out of steam.
There 'tis. I'm just like a fool at a tennis match who's following the instructions of that fellow who told him to watch the ball. I'm watching amazed as values move further and further from agreement with price, but this is the best thing that could happen to gold and silver investors, better than free donuts for life. Y'all ought to hanging over this market like hungry buzzards, jumping on every fresh decline.
I reckon I'm going to have to work on my metaphors and similes. Sometimes they're a little less than tasty. Bottom line is that markets are not rational, and when the more outrageously irrational they become, the greater our opportunity to take advantage and profit. Remember my Tennessee proverb: Sooner or later, reality revenges itself.
'Twas an up-week for stocks but pitiless for metals -- owch. US dollar index spun wheels and went nowhere, didn't even throw up much mud. White metals moved sideways, while central banks around the globe continued to suck the blood out of their victim populations.
When markets DON'T react to news as they logically ought, something's up. Yesterday despite economist's rosy forecasts, first Quarter GDP came out contracting at a 1% annual rate. Mmmmm. Two quarters contracting running makes it a recession, yet the S&P500 rose to a new all time high despite this news. Complacency and optimism have reached narcotic levels.
Now y'all think: if GDP is contracting, economic activity is contracting, and that can't be good for stocks. Yet they rose anyway. Metastatic optimism.
And the economists forecasting, almost as accurate as Nordic rune-casters, found all sorts of excuses why GDP ought to have been down, mostly centering on bad weather. There are excuses, bad excuses, and plumb sorry excuses, and that one is plumb sorry and has more holes than a sweater at a moth farm.
But what do I know? I'm only a suspicious durned fool from Tennessee who only knows a little Latin: Timeo economistes et dona ferentes.
Dow confirmed the Dow transports' new high as well as the S&P500's new highs, while the SP500 clocked another new high today. By golly, we've got a proverbial Mexican cat ranch by the tail here, a perpetual money-making scheme. (Y'all know about the Mexican cat ranch? You raise rats to feed the cats and skin the cats, sell the hides, and feed the carcasses back to the rats. It's a never ending money-making mo-sheen.")
Get serious, Moneychanger.
Okay, Dow added 18.43 (0.11%) to climb to 16,717.17, although it remained underwater the whole day until the last 15 minutes. That's as convenient as finding a $100 bill -- in somebody else's pocket. Never mind, it got onto the scoreboard. In America, that's all that counts. Previous high was 13 May 2014 at 16,715.44. S&P inched up 3.54 (0.18%) to end at 1,923.57, against yesterday's new high at 1,920.53.
That bumps the Dow smack up against the top boundary of the megaphone of death that has been forming since 1998. S&P500 already crossed above ("overthrew") its analogous upper boundary earlier this year. Time to fish or cut bait. Either stocks will make a lasting top here and crumple for years to come, taking the economy with them, or there is a Santa Claus, who, with the Easter Bunny and the Money Fairy, works for the Federal Reserve.
Throwovers and tops feed on themselves, and are unpredictable. This can last several more weeks, but the end is sure.
Dow in silver gained 1.23% to close 888.27 oz (S$1,148.47 silver dollars). This approaches my target of 912 oz (S$1,179.15). In the last twelvemonth the Dow in silver has formed a rising wedge, which can be expected to break out to the downside. Chart is at http://scharts.co/1wC0dtz Interesting -- even with a Dow at 17,000, 912 oz works out to silver at 1864 cents. By the way, that 888.27 oz is a new high for the move.
Dow in Gold only inched up 0.44% to 13.37 oz (G$276.38 gold dollars. You can view a chart at http://scharts.co/1hH52br Dow in gold is trading in a channel about 2.8 oz wide. By mid-June the top boundary will be around 15.1 oz. No sign of turning down yet, although the RSI and Full Stochastics are reaching overbought levels (silver, too.)
Currencies are spending days in a coma, only to wake up and sprint a mile. US dollar fell below its 200 DMA (80.46) to 80.43, down ten basis points or 0.12%. Daily chart shows no direction but erosion lower, but if the US dollar index can struggle above that 200 DMA it should rise to 81.50. Every time I think the dollar is about to rise, it slumps.
The euro rose 0.23% to $1.3634, smack on its 200 DMA, but other than a little oversold reaction rally, there's no hope in this chart. If the European Central Bank criminals announce new easing measures next week, it should accelerate its plunge.
Yen is barely moving. Lost 0.3% to close today at 98.27. Technically in an uptrend, but trapped beneath its 200 DMA. Congestion will break soon, probably upward.
Ten year US treasury not yield rose 0.41% to 2.457%. This brings it back to the upper channel line it overthrew a year ago. Must turn here or drop much further. Chart is at http://scharts.co/1wC6UM8
Y'all enjoy your weekend!
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.