Monday, May 05, 2014

The Gold Price Confirmed it's Reversal, Cutting Through it's Resistance Closing at $1,309

5-May-14PriceChange% Change
Gold Price, $/oz1,309.006.400.49%
Silver Price, $/oz19.580.030.14%
Gold/Silver Ratio66.8540.2320.35%
Silver/Gold Ratio0.0150-0.0001-0.35%
Platinum Price1,447.40-0.40-0.03%
Palladium Price816.651.650.20%
S&P 5001,884.663.520.19%
Dow in GOLD $s261.05-1.00-0.38%
Dow in GOLD oz12.63-0.05-0.38%
Dow in SILVER oz844.26-0.31-0.04%
US Dollar Index79.55-0.01-0.01%

The GOLD PRICE added $6.40 (0.5%) to close at $1,309. Silver gained a meager 2.8 cents (0.14%) to close at 1952c.

Looking inside, gold behaved very well today. First, it cut through first resistance at $1,305. Next, it fended off an attempt to drive it below $1,300, where also now coincide its 200 day moving average (1,300.89) and 20 DMA ($1,300.84).

All this makes Friday's strength, which mirrored sudden reversing strength on 24 April, confirm a reversal. Gold's MACD and RSI have turned up, and the rate of change has turned positive.

How can we know the GOLD PRICE means it? A close tomorrow over the 50 DMA at 1,317.61 will help, but a close above $1,331 would help more. Any progress toward that number is positive. That gold closed higher today than its last high ($1,306.60) also adds weight to the case for a higher gold price.

Like Gold, the SILVER PRICE dramatic reversal Friday confirms the reversal on 24 April. Closing above 1950c helps, but silver really needs a close above 1990c. 20 DMA stands at 1963, 50 at 2028c, 200 at 2085c.

Bottom line? Silver and gold have doubled bottoms on a strong key reversal. That argues for higher prices. Y'all are sitting in the eye of a storm, surrounded by sunny complacency. Just wait till those hundred mile an hour winds whip through markets again. If the US dollar will oblige us by falling off its cliff, that would be a sufficient catalyst.

At one point early in the day the Dow had fallen 136 points. It hit its 20 DMA (16,395) then turned and rose, ending the day up 17.66 (0.11%). S&P500 played the same game, but ended the day up 3.52 (0.19%) at 1884.66. "Juberous," as my grandmother would say, disapprovingly. However, both remain at or slightly above their downtrend lines. I am still expecting higher prices in May, but stocks are rolling over. Lo, count the days, for they are numbered. Mene, men, tekel upharsin.

Dow in Silver fell 0.35% today, closing at 842.75 oz ($$1,089.62 silver dollars). It draweth speedily to a final peak.

Dow in Gold is behaving a bit oddly. It fell today 0.57% to 12.62 oz (G$260.88 gold dollars). By the way, to give you an idea where you are in the world, in 1929 the Dow topped about $370 gold dollars, so in gold terms the Dow is lower today than its 1929 high. Anyhow, the DiG is moving sideways, unable so far to breach 12.92 oz (G$267.08). Could have topped, might make one more push up.

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.