|Gold Price, $/oz.||1,265.80||1,233.60||-32.20||-2.5|
|Silver Price, $/oz.||19.082||18.556||0.526||-2.8|
|Dow in Gold $ (DIG$)||279.87||285.40||5.53||2.0|
|Dow in gold ounces||13.54||13.81||0.27||2.0|
|Dow in Silver ounces||898.09||917.82||19.73||2.2|
|US dollar index||83.79||84.37||0.58||0.7|
|3 Day Gold Price Chart|
|30 Day Gold Price Chart|
|5 Year Gold Price Chart|
|3 Day Silver Price Chart|
|30 Day Silver Price Chart|
|5 Year Silver Price Chart|
Today the SILVER PRICE gained one cent to $18.556 on Comex; gold gained $3.70 to $1,233.60. Today's $13 range in gold and 13 cent range in silver show how genuinely dead metals are. The flashing US dollar and the hope of higher interest rates has sucked away all interest.
Imagine you talked your wife into moving from south Georgia to Florida. Imagine you began with $200 and a shaky transmission. Imagine you reach the Mojave Desert and the transmission blows. That is not the time to turn to your wife and say, "Well, at least we've still go our health!"
That's what it feels like for me to say, "Well, at least silver and gold have held up well for all the support they've broken."
The GOLD PRICE has reached and breached the June low at $1,240.20, after falling through the since-July trading channel bottom, after falling through the uptrend line from the December lows. I'm sure enough glad we've still got our health.
Silver reached a low of $18.45, below the December, May, and June lows but above the June 2013 low at $18.17.
Here's what's sorry: the more times a market challenges support, the weaker that support becomes, and the more likely to give. On the other hand, silver is now more oversold than at any time since June 2013. Small signs of life appear in momentum indicators. But it's big brother gold we're looking at. It's oversold, too, but not as severely as in June 2013. Only one indicator, the Full stochastics, hint at an upturn, besides the RSI.
Waiting this way for silver and gold to turn around, I am given to meditate on my loyalties and beliefs. Somewhere down around my liver or spleen dwells an abiding and unconquerable mistrust of the yankee government and its central bank and fiat money. I look at them the same way a worm looks at a robin, worm that I am. I don't trust 'em, and I've watched them through the worst financial crisis in the past 80 years do exactly what I expected: print more money.
They have only two weapons against that deadly loss of confidence that is a financial panic: blarney and liquidity. Blarney is gussying up Janet Yellum or Ben Bernanke and Warren Buffett and Bernard Obama and putting them on the tube to whisper soothing words to the stampeding masses. Liquidity is printing money.
Right now, that BLARNEY is working better than even I, who have an opinion of the American Public's gullibility even lower than PT Barnum, am flabbergasted. It is truly amazing.
But I am patient as a rock, calm as a 200 year old oak. Facts eventually avenge themselves. The Gods of the Copybook Headings may take long to wreak their vengeance, as Kipling observed, but their vengeance is sure.
But I have strayed to chase rabbits. Point is that an awful lot of folks are long dollars and stocks might be disappointed this week when the FOMC makes its pronouncements. Any words the market interprets as working against raising interest rates soon might just rabbit chop the dollar in the back of the neck, and stocks along with the dollar.
This best of all possible worlds for financial confidence feeds the dollar and stocks but starves gold and silver. That's what you've seen in the last week. Let's look closer.
The past week stocks rolled over and eroded but crashed not. Dow today gained 43.63 (0.26%) while the S&P500 lost 1.41 (0.7%) to 1,984.13. Nasdaq, N-100, and Russell 2000 all fell as well. Dow and S&P500 have both fallen below their 20 day moving averages. Why do we watch the 20 day moving averages anyway? To alert us when a market's momentum has turned down, when it is trading below the average of the last 20 days. Lo, not far from here (16,913 and 1,973) stand the next tripwires, the 50 day moving averages. Add to that the straining behavior of the last month, eking out new highs by points. Next move here should be down, though few expect it.
O merciful heavens! My top target for the Dow in Silver for months has been 912 oz, and the high Friday was 912.33 (S$1,179.58 silver dollars). I won't chortle too loud, since it might rise another 10 oz to the upper trend line, but when you stare at a number that long it does leave a crease in your brain.
Meanwhile the Dow in Gold today touched the December high at 13.80 oz (G$285.27 gold dollars). When a market touches a previous high (or low), it is Fish Or Cut Bait time. Either it will accelerate through the high to establish a new uptrend, or fall back and reverse.
Both the Dow in Silver and Dow in Gold are way overbought. It could be a disappointment from the FOMC this week would knock the dollar and stocks down and perk up metals. However, a trend in force remains in force until it reverses. Haven't seen any reversal yet.
US dollar index gained 58 basis points (0.7%) last week, and today added another 13 basis points (0.15%) to end at 84.37. Shucks, I'm plumb out of similes and metaphors to describe how overbought it is. The dollar index is knocking at the downtrend line from the late-2005 high. This same line also forms the upper boundary of a triangle building since the 2008 low at 71.33. Ridiculous as it sounds, the rough target for a breakout from here would be over 102 for the dollar index.
Can that happen? We live in Never-Neverland where anything can happen. Do I expect that? No, it works too hard against too many other things Our Masters are trying to manage.
Yen and Euro are both excruciatingly oversold, but can't so much as raise a little finger. Yen rose 01.6% today to 93.31. Euro fell 0.21% to $1.2939. Sure look ripe for some kind of rally.
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.