|Gold Price, $/oz.||1,215.30||1,214.10||-1.20||-0.1|
|Silver Price, $/oz.||17.781||17.477||0.304||-1.7|
|Dow in Gold $ (DIG$)||293.92||291.38||-2.55||-0.9|
|Dow in gold ounces||14.22||14.10||-0.12||-0.9|
|Dow in Silver ounces||971.81||979.18||7.37||0.8|
|US dollar index||84.86||85.75||0.89||1.0|
|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|
Thursday's 24 hour trading in silver saw three bottoms about $17.40, off of which silver rallied today to $17.73 about 3:30 a.m. eastern time. But the downwave from that high seems to have dropped in three legs, which, if accurate, suggests it was correcting the upmove. In other words, the direction of trend is up.
That close at $17.477 cents was classic tape painting, since I hardly saw the SILVER PRICE trading under $17.62 all day. End of the day found silver at $17.68.
On a five day chart the GOLD PRICE made a low this week around $1,206, climbed sharply off that Thursday bottom only to be smacked down again today, but down to a higher low ($1,212.80).
Gold closed today, as it did yesterday, ABOVE its downtrend line from 1 September. Yes, that does mean something. Add to that the MACD turning up, and the RSI moving up out of oversold-land, and there are the ingredients for an upturn. However, no one has yet lit the eye under the pan.
Next week and October promise an abundance of pain for stock investors. But until that US dollar Index takes a breather, silver and gold will keep struggling. Look for them to stage a sudden, sharp rally within the next two weeks. Gold may keep chiseling lower in the meantime. A break below $1,205 sends gold lower, above $1,237 sends it higher. Silver needs to clear $18.00 to begin to turn up, and $18.50 to convince a crowd.
About the time my treacherous brain thinks it's time to throw in the towel on gravity and monetary reality and call Mother Janet Yellum a winner, common sense slaps my jaws and brings me back. I interviewed the great Harry Browne in 1993 when I was researching for Silver Bonanza, and he said one thing I've never forgotten: the size of the rally depends on the preceding government price suppression. So, the longer the government suppressed silver and gold, all the way through the 1960s and 1970s, the stronger the eventual rally and blow up.
In the past 5 years the Fed has increased is balance sheet by about 4 times, a number for which history offers no comparison. The Fed has also suppressed interest rates to zero percent, and, I doubt not, the prices of silver and gold. At the same time, its money printing has driven the stock market farther into the stratosphere.
What happens when the suppression can no longer be continued, and it all blows up?
This is all confusion until you look at the chart and realize that, for all the big moves up and down, stocks have steadily worked lower with lower lows and lower highs, in other words, a downtrend. Yesterday the S&P500 closed lower than its last low (19 September), which proclaims gravity wreaking its vengeance. Today's rally changed nothing. However, it does seem a bit suspicious, even to such an unsuspicious mind as mine, that stocks could find no traction until 2:00, when "some" Big Buyer entered the market. I won't say "Nice Government Men" of the Plunge Protection Team, but y'all know that's who I mean.
Dow in gold rose 1.19% (thanks to gold's fall) to end at 14.03 oz (G$290.03 gold dollars). Still needs to close under the 20 DMA (13.78 oz, G$284.86) to begin to confirm a reversal. However, the MACD had turned down already, as has the RSI.
Dow in Silver ended at 969.58 oz (S$1,253.60 silver dollars), up 0.7%, after making a new high on Wednesday at 974.25oz (S$1,259.64). Still wildly overbought.
On 26 September 1900 the US Mint ceased minting $1 and $3 gold coins and the three cent piece. Why, y'all ask, were they minting $3 gold coins and 3 cent coins? Because they bought a sheet of postage stamps, why else?
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.