Wednesday, June 18, 2014

All Silver and Gold Price Indicators are Positive, Both Metals Look Ready to Sprint

18-Jun-14PriceChange% Change
Gold Price, $/oz1,272.400.700.06%
Silver Price, $/oz19.770.050.23%
Gold/Silver Ratio64.370-0.115-0.18%
Silver/Gold Ratio0.01550.00000.18%
Platinum Price1,452.807.700.53%
Palladium Price823.656.200.76%
S&P 5001,956.9814.990.77%
Dow in GOLD $s274.671.440.53%
Dow in GOLD oz13.290.070.53%
Dow in SILVER oz855.302.980.35%
US Dollar Index80.53-0.18-0.22%

3 Day Gold Price Chart
30 Day Gold Price Chart
3 Day Silver Price Chart
30 Day Silver Price Chart
I'm ashamed to report what the GOLD PRICE did today, up 70 cents to $1,272.40 with a skinny 10 dollar range. Silver added 4.6 cents to end on Comex at 1976.7c.

What's interesting is that despite a dull day, here at the end both metals are tugging at their leashes. The GOLD PRICE stands at $1,275.90. The SILVER PRICE was 1984 cents when I plugged in my prices, but it's risen to 1993c now.

Just looking at those charts, I'd be more comfortable buying on a pullback tomorrow, but if silver pushes through 2000c and gold through $1,285, there won't be any pullback.

Both silver and gold prices have me chompin' at the bit. Indicators are all positive, and both look ready to sprint.

The Federal Reserve's Federal Open Market Committee met again and announced another $10 billion monthly taper & mumbled about interest rates but placed the time at some far distant future not specified or even hinted at. Same old song and dance.

A friend sent me a Bloomberg article you'll find at "Bonds' Liquidity Threat is Revealed in Derivatives Explosion." Stripping out the technical stuff, bond markets are becoming illiquid making it very difficult for traders to sell in case of a crisis, so traders are turning more to trading derivatives. It sounds as if central bank bond buying and interest rate suppression is painting the banks into the corner as their policies disrupt the markets they rely on to manipulate interest rates and money.

Let me see if I can squeeze out a tear here. hmmmm. Nope. Dry's a bone.

US dollar index waxed volatile under pressure of the FOMC statement. Didn't know whether to go up or down, but settled on dropping 18 basis points (0.23%) to 80.53. It managed a high at 80.97, challenging that 81 resistance, then wilted like an orchid in the Mojave Desert, & even closed below its 20 DMA (80.54). It has been trading above its 200 day moving average, but that's nearby at 80.42. 'Twill tumble if it steps over that line.

Euro was encouraged by the Dollar's woes and rose 0.33% to $1.3548. Almost reached its $1.3602 two hundred day moving average. Must prove a rally by rising again tomorrow. Yen rose 0.26% also to 98.13, but remains below the downtrend line from its May high, and locked in the same old range.

Just ponder for a moment. Suppose you had a friend in the Fed who 24 hours before, or even 2 hours before, the FOMC announcement could whisper to you what the FOMC would announce. Do you think you could make any money trading stocks?

Fed's announcement that it would continue wrecking the US economy by suppressing interest rates sparked jubilation on Wall Street, where it seems nobody thinks much farther out than 20 minutes. Dow rose 98.13 (0.58%) to 16,906.62. S&P500 jumped 14.99 (0.77%) to a new all-time high close at 1956.98. Dow's close was not near a new high, but Nasdaq Composite is, and Nasdaq 100 already has made new highs. Russell 2000 isn't close, but the Wilshire 5000 made a new high. That looks a little like the cats & dogs flying toward the end of a move (lower grade stocks tend to outperform toward the end of a rally).

Now it gets interesting. Today the Dow in Gold rose while the Dow in silver kept on falling, even through its 50 day moving average (853.75 oz or S$1,103.84 silver dollars). Dow in gold didn't rise much, 0.12%, and ended at 13.23 oz (G$273.49 gold dollars), barely below its 20 DMA. Dow in silver fell 0.15% to 849.79 oz (S$1,098.72). This catches my eye because, as y'all will remember, I have not been expecting the Dow in Silver to exceed 912 oz (S$1,179.15) at this top. The high at 892.99 oz (S$1,154.57) June 1 might have been THE top, and today's fall below the 50 DMA certainly supports that conclusion.

Remember, when these two indicators top, it won't matter two hoots & a holler what stocks are doing, because even if they are rising silver & gold prices will be rising faster.

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.