Wednesday, August 06, 2014

The Gold Price Sprang $22.70 Clearing Two Resistance Levels to Close at $1,306.70

6-Aug-14PriceChange% Change
Gold Price, $/oz1,306.7022.701.77%
Silver Price, $/oz19.990.190.96%
Gold/Silver Ratio65.3840.5160.80%
Silver/Gold Ratio0.0153-0.0001-0.79%
Platinum Price1,466.709.300.64%
Palladium Price849.400.150.02%
S&P 5001,920.240.030.00%
Dow in GOLD $s260.13-4.38-1.65%
Dow in GOLD oz12.58-0.21-1.65%
Dow in SILVER oz822.78-7.24-0.87%
US Dollar Index81.50-0.10-0.12%

3 Day Gold Price Chart
30 Day Gold Price Chart
3 Day Silver Price Chart
30 Day Silver Price Chart
The GOLD PRICE sprang $22.70 (1.8%) to clear resistance at $1,295 and $1,300 and closed at $1,306.70. Silver jumped 0.95% (19.1 cents) to close Comex at 1998.5. That close is like a bug in your orange juice: it looks great, but you're afraid to drink it. Should have closed over 2000c, but maybe I'm just a picky smellfungus.

That jump carried the GOLD PRICE through its 20 DMA ($1,304.94) almost to the downtrend line from October 2012, which has been the stout barrier to gold's rise in the last 2 months. Tomorrow that line stands at $1,313.75, so any STRONG close above that would constitute a breakout. On the other hand, I am haunted by remembering that these crisis-inspired runs usually fade and hand back all the gains.

The SILVER PRICE yesterday came right to the downtrend line from the August 2013 high, skidded to a stop, and reversed higher today.

GOLD/SILVER RATIO has worked strongly higher in the last three days, from 63.90 to 64.868 yesterday to 65.38 today. Very much overbought, and ought to fall back soon.

The gold price, up about $20, doped up on increasing tensions over Ukraine. Putin put his own sanctions on the EU and other countries, showing two can play the sanction game. One wonders if the noobs in the US regime really are stupid enough to throw the whole world into war. They certainly want one, as their propaganda machine has shifted into high gear, and never mind waiting for facts, lies will work even better.

My suspicious nature says the Nice Government Men went into high gear today, too, to make sure markets didn't run away on the bad noises out of Ukraine. Stock indices rose toward noon, then eroded the rest of the day, but closed "up". Dow gained an minute 13.87 (0.08%) to close at 16,443.34. S&P500 rose an infinitesimal 0.03 (0.00%) to 1,920.24.

With a 16,369.55 low yesterday, the Dow scared its 200 DMA (16,338.50) to death. Surely a bull market nearing its 200 DMA ought to attract buyers aplenty, but today's Dow gain doesn't look too stout. RSI has fallen to areas where it ought to rebound, but MACD gives no token of turning up.

The S&P500's 200 DMA lies far below at 1,861, but the 100 DMA is at 1,913, a line the S&P500 punched at its 1,911.45 low today. Logically stocks ought to stage some sort of little rally from here, but the plunge has not yet ended.

Whoa! Dow in gold sliced clean through its 200 DMA (12.71 oz or G$262.74 gold dollars), falling 1.24% to 12.58 oz (G$260.05). Y'all recall that the DiG topped on 9 June and fell hard until mid-July, when it began a countertrend rally. It has now (1) crossed below the 200 DMA AND (2) closed below the last low (12.645 oz or G$261.39) oz). Mark: the uptrend line from the August 2011 will stand tomorrow at 12.40 oz (G$256.33). Crossing that line will give the next confirmation that the long trend of stocks rising against gold, which began with the gold top in August 2011, had ENDED.

Silver acted a little lethargic today,. Dow in silver dropped only 1.24% to 820.32 oz (S$1,060.62 silver dollars). This remains equivocal, with the 20 DMA below at 815.24 oz (S$1,054.05) and the 200 DMA at 807.51 oz (S$1,044.05). Conceivably the DiS could knife through those tomorrow, but it hasn't done so yet.

I don't know a durned thing, but had I been the Nice Government Men today I'd a-been selling that dollar hard, to keep it from running away upside during a crisis. But maybe it was nacheral forces drove the dollar index down ten basis points to 81.50. And it is more overbought than Liberace albums at an old ladies' convention.

Euro wriggled and showed slight signs of life, rising 0.04% to $1.3380. Yen rose a sizeable 0.52% to 97.99. That sliced into (but closed not above) all its clustered 200, 50, and 20 DMAs, and closed the gaps left behind by the fall. That likely invalidates the sell signal the yen gave when it fell out of that long narrow triangle.

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.