Monday, August 25, 2014

The Gold Price Sits on the Buying Opportunity of 2014

25-Aug-14PriceChange% Change
Gold Price, $/oz1,277.30-1.30-0.10%
Silver Price, $/oz19.36-0.03-0.14%
Gold/Silver Ratio65.9830.0280.04%
Silver/Gold Ratio0.0152-0.0000-0.04%
Platinum Price1,420.40-0.10-0.01%
Palladium Price889.752.150.24%
S&P 5001,997.929.520.48%
Dow in GOLD $s276.371.500.55%
Dow in GOLD oz13.370.070.55%
Dow in SILVER oz882.165.180.59%
US Dollar Index82.580.190.23%

3 Day Gold Price Chart
30 Day Gold Price Chart
3 Day Silver Price Chart
30 Day Silver Price Chart
The GOLD PRICE sits just barely above the uptrend line from the December 2013 bottom, and the long term uptrend line on the monthly chart. I'm betting gold will hold here. If so, this will prove the buying opportunity of 2014.

The SILVER PRICE continues to slide down that downtrend line from the 2013 high.

For both silver and GOLD PRICES, I have to ask, Why haven't they broken down? Short answer is that buyers are waiting for these low prices. Another part of the answer is lack of interest. Silver's range today was 1930c to 1947c, gold's $1,281.6 to $1,276.10.

Only thing that could cancel a rosy outlook for silver and gold prices is a sudden drop through these levels.
Some things are so bodaciously stupid that you hardly know where to begin unraveling them, because the stupid sticks out all over. Today there's reports the European Criminal Bank -- whoops, Central bank -- will engage in new stimulus measures, read: inflate more. In a statement that for utterly pure stupidity could hardly be beaten, ABC News reported that "Draghi warned that low inflation -- a sign of economic weakness -- could be getting worse."

But inflation doesn't result from any act by the economy weak or strong, it can only be done by a central bank, because it is creating new money. But the point of this moronism is the lame idea that somehow new inflationary money can stimulate the economy. In fact, it can only cripple the economy, because it makes money artificially cheap which fools entrepreneurs into investing in unprofitable ventures -- in short, wasting capital. So the result of inflation is not only picking the pockets of all savers, but also misdirecting capital so that a temporary economic crisis can become chronic.

Here's proof: the US Federal Reserve has been stimulating the US economy since 2008, and the "economic recovery" remains one with the Yeti and Bigfoot. Never mind, they keep on doing it anyway, because if they ever stop printing money, their whole system will collapse.

Stocks today continued rising higher into irrationality. S&P500 hit 2000 but closed below at 1,997.92, up 9.52 or 0.48%. That was a new high for the S&P500, but not the Dow. It rose 75.65 (0.44%) to 17,076.87. Last high was 17,138.20 on 16 July.

It has become pointless to drag out measures of overvaluation for you. In the end reality will take its vengeance.

Dow in silver rose 0.66% to 882.16 oz (S$1,140.57 silver dollars), still heading for a double top with June's high at 892.99 oz (S$1,154.57).

Dow in gold rose 0.67% to 13.35 oz (G$275.97 gold dollars). Same show playing here, toward the June high at 13.53 oz (G$279.69).

US Dollar Index rose 19 basis points to 82.58, pushing close to my top target at 82.75. This might mark a top that would last a while, which would help gold. Yen today at 96.14 (down 0.1%) has reached the bottom of a 15 month trading range. Must turn up here or dive. Euro lost 0.38% to $1.3194. Euro is greatly oversold, so may show a corrective reversal soon.

In the teeth of news about as bad as it could get, a surging dollar, and a break of $1,280 support last week, gold held its ground. Oh, it lost a meager $1.30 (0.1%) to close Comex at 1,277.30. Spot silver also held firm, losing 2.8 cents (0.14%) to 1935.8c.

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.