Thursday, June 05, 2014

Silver and Gold Prices Higher, Gold Price Climbed $9 to Close at $1,253

5-Jun-14PriceChange% Change
Gold Price, $/oz1,
Silver Price, $/oz19.060.291.54%
Gold/Silver Ratio65.757-0.533-0.80%
Silver/Gold Ratio0.01520.00010.81%
Platinum Price1,447.1011.900.83%
Palladium Price838.852.200.26%
S&P 5001,940.4212.540.65%
Dow in GOLD $s277.76-0.38-0.13%
Dow in GOLD oz13.44-0.02-0.13%
Dow in SILVER oz883.54-8.37-0.94%
US Dollar Index80.60-0.08-0.10%

The GOLD PRICE climbed $9.00 (0.72%) today to $1,253.00. Silver rose also, 28.9 cents (1.54%) to 1905.5c, over 1900c for the first time in five days.

Silver's volume rose strongly, but the SILVER PRICE has passed no milestones. 20 DMA stands above at 1922c. Indicators are moving toward the upside, but no proof yet.

The GOLD PRICE RSI is coming up from a very overbought reading. Full stochastics are scraping bottom, ready to rise. MACD might be ready to rise.

So we have silver and gold prices higher today, but without any solid confirmation that they have indeed reversed. I've been suckered so many times that I want some proof.

But do watch out. Silver can move with blinding speed when it turns. By fall silver and gold prices at these levels will seem absurd.

Today the European Criminal Bank announced it was trimming its main lending rate from 0.25% to 01.5%. It also instituted a CHARGE (but called a "negative deposit rate") on bank reserves parked at the central bank, lowering that rate from zero to -.1%. On its marginal lending facility the ECB cut the rate from 0.75% to 0.40%. Charging banks for parking reserves with the ECB is supposed to flush them out of the bushes and make them lend. We'll see, as no other central bank has tried this trick. Other technical measures will also add to euro inflation.

On a huge trading range (1.2%, from $1.3503 to $1.3670) the euro shot up 0.46% to $1.3663. That close took it above its 200 day moving average and left it not far below its 20 Dma (1.3676). The shorts got caught short.

This action shows how loony, how goofy, these central bank denominated markets have become. Now think: interest rates chiefly determine currency exchange rates, along with inflation expectations: higher the rates, more desirable the currency; lower the inflation, more desirable the currency. The ECB just CUT its interest rate to inflate the currency more, and the euro rose. Give the euro a week or two, then gravity will reassert itself.

The European criminals are taking the same path Bernanke and the US criminals have taken, guaranteeing perpetually rising stock markets by keeping the new money flowing. This will end in tears, wailing, and gnashing of teeth. But who knows? I'm only a nacheral born fool from Tennessee. Maybe in Europe pigs do have wings and anvils can fly.

Some 56% or so of the US Dollar Index is made up of the euro, so big gains in the euro translate to big losses in the US dollar index. Dollar hit a high of 81.07 before turning and sinking to close at 80.39, down 33 basis points (0.42%). From 8:00 Eastern Time until the ECB announcement about 8:30 the dollar was climbing, then commenced dropping and kept on dropping all day. Yen rose 0.32% to 97.66, which didn't paint much of a splash on the chart. On the other hand, today could end the dollar's promise of a rally.

Yield on the US 10 year treasury note fell 0.84% to close at 2.584%. That means that both bonds AND stocks rose today, a right rare occurrence.

Stocks went hog wild at the prospect of money printing spreading around the globe. Dow made a new all time high, up 98.35 (0.6%) to 16,835.88. S&P500 made its seventh new high in eight days, rising 12.54 (0.65%) to 1,940.42.

Folks, when the thought that crosses your mind is "It don't get no better than this," it probably won't.

Now here's an odd and intriguing observation. While the Dow and S&P500 have been making new highs, the Dow in Gold and Dow in Silver have turned down. Oh, nothing dispositively certainyet, but still down.

Dow in silver hit its overhead resistance line at 892.99 oz (S$1,154.57 silver dollars) on 1 June and bounced down. Today it dropped 0.98% to 882.26 oz (S$1,140.70). Chart is right here, RSI, MACD, Rate of Change, and full stochastic are all rolling over. But I'd like to see confirmation with a close below the 20 DMA at 864.84 oz (S$1,118.18). My maximum upside target has been and remains 912 oz (S$1,179.15).

Dow in gold chart can be seen here, Since June 1 it has stalled, but only sideways. Today dropped 0.18% to 13,43 oz (G$277.62 gold dollars). Indicators are trying to roll over but no strong confirmation yet.

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.