Monday, June 02, 2014

The Gold Price Closed Down $1.90 at $1,243.70

2-Jun-14PriceChange% Change
Gold Price, $/oz1,243.70-1.90-0.15%
Silver Price, $/oz18.710.060.30%
Gold/Silver Ratio66.476-0.301-0.45%
Silver/Gold Ratio0.01500.00010.45%
Platinum Price1,438.70-16.00-1.10%
Palladium Price832.05-3.60-0.43%
S&P 5001,924.001.400.07%
Dow in GOLD $s278.300.860.31%
Dow in GOLD oz13.460.040.31%
Dow in SILVER oz894.95-1.27-0.14%
US Dollar Index0.240.25-2500.00%
Silver and GOLD PRICES spake today with fork├ęd tongues. Silver rose 5.6 cents to 1870.9 but the gold price scraped off $1.90 to $1,243.70.

Far's the SILVER PRICE is concerned, it has fallen to long time support around 1865 - 1890 cents. Volume has dropped as this decline has proceeded (think of volume as the gas gauge on a move - more it drops, less fuel the move has left.) Indicators look rotten, but they always do at bottoms. Still, no concrete sign of a tergiversation yet.

The GOLD PRICE might stop here or at last-low-support about $1,237.50, maybe a buck or two lower. Or it might re-visit $1,180. Either way, it won't be long.

Behold, let us ponder the GOLD/SILVER RATIO. Go throw an eyeball on the chart.

Right strange, ain't it? It's a long rising wedge that is cycling very regularly at 14 - 21 days, sort of laddering up the bearish wedge. This suggests a dead market that is just plumb wore out. Next move'll be a big-un. Because the top of that wedge, now about 68.5, is so high, odds favor a fall out of that wedge.

Speaking of volume, it has clean dried up on the gold price. Wonder they even keep the market open, no more trading than it's doing. I read somewhere credible that the drop on Options Expiration Day was precipitated by huge sales. I have no trouble believing that, since a gold plunge guaranteed big savings for those who had sold gold call options.

Y'all just be patient, and look to buy either on a turnaround (Close above $1,280 or 1950c) or a sudden plunge. I'd buy that plunge, because I think if we see one, silver and gold prices will reverse immediately.

Y'all ever see somebody drop a 50 lb. watermelon off the roof of a three story house? From the time that thing is launched into the air it's as stable as can be, just looking at the watermelon. If you ignore the approaching terra firma, that watermelon looks just fine, but when it hits the ground -- oh, my! Watermelon everywhere!

So it is with today's markets. They appear quite stable, but this is not the real world. The watermelon has been thrown off the roof -- we're just waiting for it to hit the ground.

Stocks looked bright, cheery, and healthy as a three day dead mackerel today. Dow jumped up 26.46 (0.16%) to a new high at 16,743.63 but the S&P500 hopped only 1.4 (0.07%) to a new high at 1924.67. Other indices were all down. Reminds me of watching a family all arguing with each other, yelling and gesticulating and shaking their fists. They ain't going nowhere together.

Dow In Gold and Dow in Silver both rose today, the Dow in Silver to a new high for the move (I'm getting right tired of writing that). Dow in Silver rose 5.25 to (0.59%) to 893.52 oz (S$1,155.26 silver dollars) and is bumping hard on the overhead boundary of the rising wedge pattern. (Reminder: rising wedges point up on the chart but usually resolve DOWN on the breakout.) Still looking for a top no higher than 912 oz ($S1,179.15).

Dow in gold edged up 0.77% to 13.47 oz (G$278.45 gold dollars), about where it was when the Great Depression started. Not as sure about a target on this one but looks like its aiming for a double top with the 13.80 oz ((G$285.27) December 2013 top.

That sorry, scabby US dollar index pulled itself together sufficiently today to rise 24 basis points (0.3%) to 80.68. That pulls away from the 200 day moving average (80.47) and gives the US dollar index the embryo of a shot for 81.50. Clearly, though, the currency worm hath turned and it's the dollar's turn to gain for a while against the other two scrofulous, scabby central bank fiat currencies, the yen and euro.

Speaking of the Franken-currency, it sank today upon growing speculation that at its policy meeting this week the European Central Bank criminals will engage in some kind of easing (money printing) or lower the already microscopic 0.25% interbank lending rate even further. Bugs Bunny could do a better job managing a currency.

The euro lost 0.28% to close at $1.3598 today, back beneath the 200 DMA and eyes firmly fixed on the abyss. Japanese yen gapped down below its 20 and 50 DMAs today, and closed below the uptrend line a-slanting up since early April. Looks as chipper as cholera. Dropped 0.6% to 97.68 cents/Y100.

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.