Friday, July 25, 2014

We Will See a Short Spike Downward in Silver and Gold Prices

18-Jul-1425-Jul-14Change% Change
Gold Price, $/oz.1,309.201,303.30-5.90-0.5
Silver Price, $/oz.20.83820.588-0.25-1.2
Gold/silver Ratio62.82863.3040.4760.8
Silver/gold ratio0.01590.0158-0.0001-0.8
Dow in Gold Dollars (DIG$)270.01269.01-0.99-0.4
Dow in gold ounces13.0613.01-0.05-0.4
Dow in Silver ounces820.62823.813.180.4
Dow Industrials17,100.1816,960.57-139.61-0.8
US dollar index80.6180.610.000.0
Platinum Price1,489.201,477.60-11.60-0.8
Palladium Price880.50878.80-1.70-0.2

3 Day Gold Price Chart
30 Day Gold Price Chart
3 Day Silver Price Chart
30 Day Silver Price Chart
The GOLD PRICE fought back today with a $12.50 (1%) rise to 1,303.30 and silver rose 1% (21.2 cents), too, and closed Comex at 2058.8c. That brought the GOLD/SILVER RATIO down to 63.304 from yesterday's 63.339. Today's rise notwithstanding, no proof yet surfaces that the correction hath ended.

Sure, silver and GOLD PRICES touched their 200 day moving averages yesterday, which often limits a correction. Can't say that yet, and I still suspect we will see a short spike downward in both metals. Both weekly charts are trending down.

Overhead you will know this correction has ended when you see the SILVER PRICE close above 2120 cents and the gold price over $1,325.50. Down below, if the low hasn't yet been seen, gold could hit $1,265 - $1,280, silver 1980 - 2000c. Lower is conceivable, but not my expectation.

Better take your chances buying QUICK. These low prices won't last much longer.

Stocks behaved very strangely this week, and strangely is seldom good.

S&P500 hit a new high close yesterday, 1,987.98, but all that gain was stripped away today when the S&P500 lost 9.64 (0.48%) to 1,978.34. Here's where it gets weird: that's 0.12 points above last week's close, so by the tiniest margin the week cannot be classified as the first part of a key reversal (break into new high for the move with a lower close). Add to that the Dow's failure to make a new high, and that all other indices fell the day the S&P500 made that new high.

Today the Dow tumbled 123.23 (0.72%) to close at 16,960.57. The weekly Dow closed lower, too. Both weekly charts show bearish rising wedges, leaving me thinking it is only a matter of short time before both indices collapse into a correction of at least 10%, with the ultimate high later this year.

The Daily Dow fell down out of it's rising wedge with a no nonsense "I'm falling to the earth's core" dive Closed beneath it 20 DMA (17,004) and the MACD and RSI were already falling. Look for a touch of the 50 DMA at 16,847.

Right now the uptrend line from March 2009 about 16,700. 'Twould be serious bidnis indeed if the Dow fell thru that.

Dow in metals had a zig zagging week, sharply higher and sharply lower. Dow in silver bounced off its 50 dma (836.81 oz or S$1,081.94 silver dollars) and fell 2,51% today to close at 815.61 oz (S$1,054.53). The correction's A-B-C shape allows it to called "complete", but a close below the 200 DMA (802.95 oz or S$1,038.16) is needed to confirm that. Better still would be a close below the last low at S$1,018.63 (787.85 oz). Indicators are turning down.

Dow in Gold's shape might also mark completion. It leaves behind a double-toppy appearance, with tops at 13.184 (G$272.54) and 13.200 (G$273). Today it plunged 1.18% to a farewell at 12.96 oz (G$267.91. It did cut through the 50 DMA (13.02 oz or G$269.15) and standeth not far from its 20 dma (12.92 oz or G$267.08). DiG will confirm its correction has ended when it closes below the last low at 12.645 oz (G$261.39).

My, this IS interesting, stocks faltering against metals. My, my.

That there US Dollar index is just arunning like a house afire. Cleared the neckline of an upside down head and shoulders it has been forming since March. Grabbed a respectable 20 basis points today (0.25%) and closed at 81.14. To break out of its range and prove a rally it must still climb over 81.50. Dollar's got a full load on, moving so fast it's leaving scales and a sulfur trail wherever it goes.

Euro is signalling a very sizeable fall. It dropped 0.26% today, complete with a gap down, never a good sign. Ended at $1.3429.

Well, the yen did it today -- broke plumb through the bottom boundary of that long narrow triangle. Opened up down there, but managed to end the day smack on the line and smack on its 200 DMA (98.20), closing down 0.02% at 98.20. Sure acts as if it wants to nosedive.

Ten year treasury yield tried to break out of its short term (since early July) downtrend, broke through the line yesterday, but fell back today to land on 2.469%. Needs to close above 2.55% before Janet Yellum starts getting that "I ate too many of them green apples" look on her gracious physiognomy, bless her little heart.

On 25 July 1850 Gold was discovered in the Rogue River in Oregon.

Y'all enjoy your weekend!

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.