Friday, August 15, 2014

The Gold Price Lost $4.40 this Week Closing at $1,304.50

8-Aug-1415-Aug-14Change% Change
Gold Price, $/oz.1,308.901,304.50-4.40-0.3
Silver Price, $/oz.19.90219.49-0.412-2.1
Gold/silver Ratio65.76766.9321.1651.8
Silver/gold ratio0.01520.0149-0.0003-1.7
Dow in Gold Dollars (DIG$)261.44264.052.611.0
Dow in gold ounces12.6512.770.131.0
Dow in Silver ounces831.77854.9523.172.8
Dow Industrials16,553.9316,662.91108.980.7
US dollar index81.4681.460.000.0
Platinum Price1,481.301,458.20-23.10-1.6
Palladium Price861.00895.0034.003.9

3 Day Gold Price Chart
3 Day Silver Price Chart
Scoreboard above makes it appear a sorry week for silver & GOLD PRICES, but closer examination will reveal something quite different. Likewise, stocks seemed gainers this week, but probably reached the limit of an upward correction today. Dollar index flatlined.

Silver & GOLD PRICES behaved just about perfectly today. "WHAT! Moneychanger, have you lost your mind. They both dropped today! You've lost what precious little mind you ever had."

Nope. Y'all think about it. Gold was driven down -- by a wave of selling, which wavers will remained unnamed -- down to $1,293. That started about 8:00 in New York (where they take no prisoners but many wallets), but look a-here: it traded sideways there about an hour, then shot straight up to close down only $9.40 at $1,304.50.

"Goofy," y'all will no doubt rejoin, "gold closed down on the day." That's not the point. Rather, gold was driven down through two support levels and bounced right back, leaving behind a big V on the chart, a spike low AND it closed above its 20 & 50 DMAs. Wait, wait, I'm overlooking something, It also closed back above that downtrend line from October 2012. Friends, this action is strong as a garlic milkshake.

Durn, I keep on forgetting stuff. On its drop today the gold price approached the unbroken uptrend line from the June low -- approached, then bounced off.

A spike low like that is just what the doctor ordered to scare off those inclined to scorn and short gold. It's a show that confirms gold's tenacious strength here.

Now to the "just about perfect" part: silver. The SILVER PRICE lost 38.1 cents to close Comex at 1949c. That close is a gnat's eyebrow above the downtrend line from the August 2013 downtrend line. This is either the very best place in the world to buy silver, or a bad one. Good, because this will be the low if silver catches here. Bad because if silver catcheth not there, it will drop down to 1860c.

Because of gold's performance today, and because the gold price has lately been leading the metals, I'm guessing silver will turn up from here. I guessing that downtrend line from August 2013 will hold.

So I may be crazy as a betsy bug, but I ain't moving a peg off that opinion -- until the market hits me over the head.

Put everything I say about stocks against the backdrop of the Dow's weekly chart. That weekly chart shows that the week of 28 July the Dow broke down through an uptrend line stretching back to March 2009. It closed below the 20 week moving average, rallied a little last week and this, but couldn't quite close above the 20 DMA this week (now 16,670).

The daily chart shows the Dow topped 17 July, then fell off steeply on 30 & 31 July, breaking through the Uptrend from March 2009. On 7 August it punched into the 200 DMA with a low at 16,333.70. The Dow then entered a rally correcting part of that fall, and today reached the 50% mark at 16,743, ran past it to 16,775, then collapsed to close down 50.67 (-0.3%) at 16,662.91. That may mark the correction's upward limit, preparing the way for another leg down next week. Note the word "may" carefully.

In similar fashion the S&P500 was pushing toward its 61.8% correction level at 1,958, which it hit -- and promptly fainted. It did close above its 20 DMA (1,951.67) but ended the day 0.12 (0.01%) lower at 1,955.06.

Currencies ended the week about where they were last week, only more so. US dollar index lost 18 basis points today, but that doesn't take it below the tight range it has been trading in. Euro closed $1.3397, up 0.22% and the yen up 0.13% at 97.73.

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.