Friday, August 22, 2014

Gold Price has Traded Out into the Nose of an Even Sided Triangle Since July

15-Aug-1422-Aug-14Change% Change
Gold Price, $/oz.1,304.501,278.60-25.90-2.0
Silver Price, $/oz.19.49019.361-0.129-0.7
Gold/Silver Ratio66.93266.040-0.892-1.3
Silver/gold ratio0.01490.01510.00021.4
Dow in Gold Dollars (DIG$)264.05274.8710.824.1
Dow in gold ounces12.7713.300.524.1
Dow in Silver ounces854.95878.1223.172.7
Dow Industrials16,662.9117,001.22338.312.0
US dollar index81.4682.390.931.1
Platinum Price1,458.201,420.50-37.70-2.6
Palladium Price895.00888.00-7.00-0.8

Sorry week for silver and GOLD PRICES, strong week for stocks and the US dollar. White metals suffered this week, too.

The GOLD PRICE found buyers and rose $4.90 (0.38%) to $1,278.60. The SILVER PRICE went sideways, losing 2.9 cents (0.15% to 1936.10, a low perch it has become accustomed to this week.

I can say little from Gold's performance today. Yes, it rose, but so what? Yesterday it fell $19.70 and traders who were profitably short would have closed out trades today, putting a little buying pressure on the market. Ended beneath the 200 DMA.

More important is that gold turned around at the uptrend from the December low. That offers a little comfort. The gold price has traded out into the nose of an even sided triangle since July. The height of the triangle promises a $90 move, but doesn't hint which way it will break.

Only reason to expect higher silver and gold prices next week -- lo, our eyes are sore with watching! -- is that cyclical lows were due today. Next week, however, options expire on Tuesday and that is often the opportunity for the black shirts on the trading floor to run prices down for the day to make sure the call options they've written expire worthless.

Mother Yellum at Jackson Hole practiced talking evenly out of both sides of her mouth, but most are convinced the Fed is firmly on a track to raise interest rates by mid-2015, so are climbing on the train before it leaves the station. On the Atlantic's other shore, Ridiculous Chief Criminal of the European Central Bank Mario Draghi hinted more broadly that the bank might do something like Quantitative Easing, and he whine3d that euro governments need to engage in more deficit spending. For this he gets paid the big bucks.

I was looking today at pictures of Yellum and Draghi, and something struck me. Have y'all ever noticed that when the media shows pictures of people they like, they never show them digging in their noses for a big booger or dozing off at the banquet table? Rather, they always publish pictures that make them look sober and reflective and intelligent and self-assured.

By the rumor, sell the news. Stocks which had been breathlessly anticipating the Epic Prononciamento from the Great Bankeress simply exhaled and sagged. Dow lost 38.27 (0.22%) to 17,001.22, hanging on above the morale-busting 17,000 level. S&P500 dipped 3.97 (0.2%) to 1,988.40.

A trend in force remains in force until proven otherwise. That says expect stocks to rise more. To avoid that Double Top Aura, however, stocks must build on these advances next week. Otherwise the entire rise begins to look like no more than a garlic-strong corrective B-wave in an A-B-C correction.

Let me de-jargon that for y'all. when upward trending markets correct downwards, they follow a threefold pattern, A-down, B-up, C-down. The B-wave is a trickster that can appear so strong it fools everyone into believing the correction has ended, just in time to reverse and entrap them all for the C-down leg.

Dow in Gold and Dow in Silver hooked down today, but nothing you could notice without a microscope. Dow in Silver ended down 0.08% (2/3 of an ounce) at 876.98 oz. (S$1,133.87 silver dollars). Uptrend in force makes me expect at least a double top with 1 June at 892.99 oz (S$1,154.57). Dow in Gold inched down 0.45% to 13.28 oz (G$274.52 gold dollars). Double top for Dow in Gold comes at 13.53 oz (G$279.69).

Euro took a 0.28% dive after the chief central banking criminals had their say today. Ended at $1.3245, on its way to $1.3100 or maybe $1.2750. Yen dropped a tiny 0.5% but touched at its 95.98 low below the last low at 96.05 (April). If the yen doesn't turn up soon, it jumps over a cliff with no ledge to land on higher than 94.83.

US dollar index's heart was warmed by Mother Yellum so it jumped up 18 basis points (0.23%) to 82.39. Still on track to the targeted 82.75. This sings no love song to gold, but does console us with the thought that it should shortly hit that target and then decline for a while.

Interest rates (looking at the 10 year note yield) look as if they want to move higher, but have not yet the strength for it.

Y'all go home and hug your spouse and relax. Next week is a new week.

On 22 August 1851 gold fields were discovered in Australia.

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.