Thursday, July 24, 2014

The Gold Price Broke it's Support and Avalanched 1.07 Percent to Close Comex at $1,290.60

24-Jul-14PriceChange% Change
Gold Price, $/oz1,290.60-13.90-1.07%
Silver Price, $/oz20.38-0.58-2.75%
Gold/Silver Ratio63.3391.0781.73%
Silver/Gold Ratio0.0158-0.0003-1.70%
Platinum Price1,472.70-12.30-0.83%
Palladium Price869.96-3.35-0.38%
S&P 5001,987.980.970.05%
Dow in GOLD $s273.632.871.06%
Dow in GOLD oz13.240.141.06%
Dow in SILVER oz838.4322.912.81%
US Dollar Index80.940.060.07%

3 Day Gold Price Chart
30 Day Gold Price Chart
3 Day Silver Price Chart
30 Day Silver Price Chart
Oh, owch! Welcome back, volatility! The GOLD PRICE broke that $1,305 support hard and avalanched $13.90 (1.07%) to close Comex at $1,290.60. Silver sledded 2.75% or 57.6 cents to 2037.6, right on the 200 DMA.

I note between gritted teeth that both the silver and GOLD PRICE punched through their 300 day moving averages today, as well as the uptrend lines which had been supporting them.

The SILVER PRICE landed on its 200 DMA (2035c) as did gold ($1,287) in this twin fall, but gold rose up off its 200. Gold has some internal lateral support that runs back to 2013 right at $1,387, too.

Last gold price breakout occurred around $1,280, so everybody expects this correction will fall that far and stop, which means it probably won't. Another target is a roughly 75% correction of the preceding rise from $1,240.20 to $1,346.80, or about $1,265. Of course, it could stop at that $1,280, IF it breaks the 200 DMA ($1,287). Does this sound as if I am vacillating? Ought to, because I am.

Silver enjoys strong support at 2000c and at 1975c. 50 DMA also stands ready to catch it at 2015c. I'll buy a little tomorrow one way or the other, just so I don't miss out.

GOLD/SILVER RATIO rose 1.7% to 63.339 from yesterday's 62.258. That catches my eye because it matches the high a couple of weeks ago. Ratio looks overstretched to the upside, which hints that the silver and gold's fall will be short-lived.

In this Best of All Possible Worlds, the sick Portuguese Espirito Santo Financial Group that owns 20% of sick Banco Espirito Santo is trying to dodge behind the bankruptcy curtain in Luxemburg. That's the third company in a week linked to the Espirito Santo family.

But in this Best of All Possible World's bankruptcy is no stigma, makes no one nervous, and roils no stock indices. I reckon they all look at it as the Best of All Possible Bankruptcies.

In the US all indices but the S&P500 wavered slightly, but a bit nervously. S&P500 added 0.97 (0.05%) to rise to a new high above yesterday's at 1,987.98. No, that was not an epochal accomplishment, and only nudges the S&P500 up a little closer to its upper trading channel line. It is rising on rising volume. In this Best of All Possible Worlds, everything is possible.

The Dow dropped for the second day running, down 2.83 (0.02%) to 17,083.80. Trading out into the nose cone of a bearish rising wedge, it can rise higher, even to 17,300, maybe even overthrow the upper boundary of that wedge. Yet a certain doominess hovers over all, for an end to this looms ahead shortly.

But in this Best of All Possible Worlds, anything is possible.

Steady-ish stocks and falling metals pushed the Dow in gold and Dow in silver higher today. Dow in silver jumped to its 50 DMA (837.31 oz or S$1,082.58) and closed 2.63% higher at 836.83 oz (S$1,081.96). Dow in gold burst through its downtrend line and rose 1.06% to 13.24 oz (G$273.69 gold dollars). Y'all don't act like I didn't tell y'all this was coming. And it has further to rise still.

The Best of All Possible Scrofulous Fiat Currencies, the US Dollar, managed by the Best of All Possible Central Banks, rose six basis points (0.07%) today to end at 80.94. It appears to be rallying, and threatens a roughly two hundred basis point rally, i.e., to 82.75.

In this BOAPW even the euro rose today, up 0.03% to $1.3464, but still sick as a poisoned dog. Lower prices seem inevitable, but remember that all scrofulous, rotten fiat currencies are manipulated, subject to the secret cosmic motions and goofy policies that take hold of central bankers' minds.

The Yen has fallen all the way to the bottom side of its narrow triangle below its 20 DMA (98.46) and on top of its 50 DMA (98.23). If it makes one baby step lower, it falls out of the triangle for a long tumble.

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.