Thursday, August 21, 2014

The Gold Price Dropped $19.70 to $1,273.70 Good Day for Buyers

21-Aug-14PriceChange% Change
Gold Price, $/oz1,273.70-19.70-1.52%
Silver Price, $/oz19.39-0.08-0.42%
Gold/Silver Ratio65.688-0.735-1.11%
Silver/Gold Ratio0.01520.00021.12%
Platinum Price1,419.30-8.40-0.59%
Palladium Price880.4011.451.32%
S&P 5001,992.375.860.29%
Dow in GOLD $s276.555.181.91%
Dow in GOLD oz13.380.251.91%
Dow in SILVER oz878.786.800.78%
US Dollar Index82.21-0.08-0.10%

Bad day for the gold, good day for gold buyers. The GOLD PRICE dropped $19.70 (1.55%) to $1,273.70 while silver dropped only 8.2 cents (0.242%) to 1939c.

Where does that put gold? It fell through its 200 day moving average, but as I have been mooting some time, it fell nearly to the uptrend line from the December low, which today is near $1,270. Today's low hit $1,273.40. If the GOLD PRICE doesn't catch around here, or tomorrow above $1,270, we're dealing with another thing. Also, a cyclical low is due between the 21st or 22nd. Tomorrow will tell us.

Y'all notice how the SILVER PRICE drops here much more reluctantly than gold? That's because down around that 1930 area (low today came at 1928c) buyers are waiting. There is lateral support there (call it 1925c), but silver also managed to close just above that downtrend line from August 2013.

Either silver and gold prices turn around at/near these prices, or they'll take another big drop. Watch closely tomorrow. A jump up would be very positive, a lackluster performance negative.

Today the S&P500 closed at a new all time high, up 5.86 (0.29%) to 1,992.37. Dow did not make a new high but closed above 17,000, higher by 60.36 (0.36%) at 17,039.49.

Depending on how long the mania continues, S&P500 could easily reach 2000, even tomorrow.

Why am I always so negative on stocks? Because I have seen these tops before, and when they happen you can't find a radioactive bear with a Geiger counter, because everybody but everybody is bullish. But think about it: when everybody is bullish, everybody has bought, and one bright day you run out of buyers. This is playing out much like the July - August 2011 gold top. People say they can set a target, but I don't have much faith in that. Dow could reach -- not now, but later this year -- over 18,000. I just watch for the signal that it's turned.

In the past few days both the Dow in Gold and Dow in silver have fundamentally changed their chart's appearances. Can't call it a correction any longer because it looks like another advance. Most likely target would be the June tops, which would paint double tops on the chart. those June tops are at 892.99 oz (S$1,154.57 silver dollars) and 13.53 oz (G$279.69 gold dollars). Today the Dow in Gold finished up 1.7% at 13.36 oz (G$276.18) and the Dow in silver closed at 872.96 oz (S$1,128.68).

US dollar index backed off 8 basis points (-0.13%) to 82.21 today. Caution is that the dollar index made a new high for the move but closed lower than yesterday, and that's the first half of a key reversal. Euro clawed back 0.17% to $1.3282, still rotting and brown around the edges. Lower euro a-coming. Yen lost another 0,1% to 96.30. Sick, sick.

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.