|Gold Price, $/oz||1,294.60||0.80||0.06%|
|Silver Price, $/oz||19.37||0.0045||0.02%|
|Dow in GOLD $s||261.48||-2.36||-0.89%|
|Dow in GOLD oz||12.65||-0.11||-0.89%|
|Dow in SILVER oz||845.47||-7.30||-0.86%|
|US Dollar Index||80.07||-0.04||-0.05%|
Friends, this don't happen in nature. The GOLD PRICE last three daily moves have been -20 cents, plus 40 cents, and plus 80 cents. This is not a market but a mausoleum. Gained 80 cents today for a Comex close at $1,294.50. The SILVER PRICE rose -- ready for this? -- 4.5 cents to 1936.7c.
I'm haunted by what the BoE's Bean said. I remember only too well August through November 2008. It was horrifying. The paper and physical prices of silver and GOLD PRICES completely disjointed. Physical silver cost 40% or more above the paper quote, and you couldn't get it except with a six to eight week delay. US 90% silver coins rose to a 50% premium Physical gold didn't acquire that large a premium, but was still 5 - 8% higher than paper gold. And delays? You were lucky to find a wholesaler who would sell it to you even with an 8 week delay.
Markets don't ever play dead long. Silver and gold prices are both in technical uptrends (higher highs, lower lows), but I could make an argument either way from this flatness: either it means silver and gold will drop off, or shoot up. On the weakness side, both the silver and gold price are below their 20 DMA's ($1,295 and 1945c). Gold has built that long narrow even-sided triangle, and that suggests a snake coiling for a long move, you just don't know which way he will strike.
You're right, I am coming down squarely on both sides of the fence. I am not ambiguous about this, though: breakout will come soon, up or down.
Odd, portentous event today. Retiring Bank of England Deputy Governor said that the present low volatility in financial markets is "eerily reminiscent" of the run-up to the 2008 financial crisis. Now I wonder why he did that? Was this just a Greenspan maneuver, dusting his skirts clean before he leaves and the world blows apart? Or is it a well-meant warning?
Volatility returned to US Stocks today. Dow sank 137.55 (0.83%) to 16,374.31, while the S&P500 also gurgled lower 12.25 (0.65%) to 1,872.83.
Ooooh. That takes the Dow below its 50 DMA (16,403) where cheerleaders were hoping the Dow would stage a rally. Let's see, below 50 DMA and 20 DMA and 200 DMA rests below at 15,891. S&P 500 did not punch through its 50 DMA (1,868) tut touched it and closed not much higher. Russell 2000 and Nasdaq Composite offer no comfort at all. Russell 2000 is below its 50, 20, AND 200 DMA, and about to break down out of a plain topping formation. Nasdaq Comp has nearly completed a head and shoulders top, and is also below its 50 and 20 DMA. Nasdaq 100 alone remains above its 50 and 20 DMA, but it's finishing the right shoulder of a HandS top, too.
It begins to look more and more like 13 May marked the top in stocks.
Dow in Silver and Dow in Gold agree with that conclusion. Dow in Gold today broke clean out of its rising flat topped triangle. Ended down 0.96% (without gold moving!) at 12.65 oz (G$261.50 gold dollars). It's already below its 20 DMA, and the 50 lurks nearby at 12.55 oz (G$259.43).
I don't think it can be denied any longer that the Dow in Silver has turned down, too. It has walked through two uptrend lines, and today closed again below its 20 DMA (849.60 or S$1,098.47). On flat silver it lost 1.11% today to 844.04 oz (S$1,091.28 silver dollars). Should move much lower.
I'd be bald as a Boston billiard ball if I were the Nice Government Man tasked with managing the US dollar -- but then again, I reckon they're doing just what they mean to do. Catatonic, it rose 3 basis points to 80.10. Euro fell 0.7% to $1.3701, Yen rose 0.16% to 98.91. None of them have a lick of gumption. Dollar roared off a bottom two weeks ago, hit 80.40, and forgot what it was doing. Euro has broken down into a fall that may last six or nine months. Yen has broken out upside like a chick hatching, one chip at a time, no follow through. Gigantic moves, followed by catatonia.
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.