Monday, September 29, 2014

The Gold Price Remains Oversold Adding $3.40 Closing Today at $1,217.50

29-Sep-14PriceChange% Change
Gold Price, $/oz1,217.503.400.28%
Silver Price, $/oz17.52-0.04-0.21%
Gold/Silver Ratio69.5080.3360.49%
Silver/Gold Ratio0.0144-0.0001-0.48%
Platinum Price1,307.805.800.45%
Palladium Price789.305.700.73%
S&P 5001,977.8016.860.86%
Dow in GOLD $s289.852.040.71%
Dow in GOLD oz14.020.100.71%
Dow in SILVER oz974.6111.531.20%
US Dollar Index85.74-0.01-0.01%

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
The GOLD PRICE added $3.40 today to close Comex, where the black shirts on the floor take no prisoners, at $1,217.50. Silver backed off 3.6 cents to $17.516. Both silver and GOLD PRICES left behind sideways trails today.

Well, why don't they break down worse? Silver broke that triple bottom line around $18.60, waterfalled, but now has stopped. The gold price broke its uptrend line from the December 2013 bottom, but has only eased down through September a maximum of $65 at its lowest so far. End of the world seems a long time coming.

Gold flirteth still with oversold. Volume is drying up. MACD has turned positive. What if the dollar takes a dip and all those hedge funds who have shorted gold and silver to buy dollars suddenly find themselves losers? They'll back out of those trades faster'n a tom cat out of the Westminster Kennel Club show.

The SILVER PRICE remains massively oversold. From today's close it needs to rise $0.50 to break $18.00 and the downtrend line.

Get this clear in your mind: neither silver nor the gold price have turned up yet, in spite of all these signs. But when you see the leaves falling off the trees, you don't look for spring. Besides, a thought keeps popping up in my mind. I know of no other asset that can carry and maintain value outside the financial system. Gold and silver don't depend on any corporation to pay a dividend, government to give give a stamp of approval, or anything else. People value them because they are gold and silver, and outside that whole fiat money-central banking system. They've been money for over 6,000 years of human history. I reckon they'll make it a few more years.

Well, that cinches it! The CNN Money headline today was, "The US dollar is on top of the world." Anytime a headline like that appears in a general circulation publication, it usually signals the end of a trend, or at least the start of a correction.

US dollar today lost nothing, one big basis point, to 85.74, so it is holding on, but at an overbought level that hard to swallow (RSI at 79.73), and it has been overbought for a month and a half. Way overdue for a correction (as I've been saying for days on end.)

The yen and the euro are wondering when the Dollar is going to fall, too. Euro today made another new low close for the move, down 0.06% to $1.2685. Yen also made another new low close for the move, 91.34 c/Y100, down 0.22%. Both remain as oversold as the dollar is overbought.

Ten year treasury note yield nearly touched its 50 DMA today. If we have been watching no more than a correction and it still intends to rise, this would be the right place to reverse gears.

Stocks got roughed up today. Dow opened down 175, losing most everything it had gained on Friday, but worked its way back up to close down only 41.93 (0.25%) at 17,071.22. S&P 500 lost 5.05 (also 0.25%) to 1,977.80.

Wonder what will happen with the Dow breaks 17,000 this time? I bet that thought leaves the Nice Government Men sweating scorpions.

Now my mind turneth to the Dow measured in metals. The late unpleasantness in stocks has been mirrored by topping/churning in the Dow in Silver and Dow in Gold. Dow in gold looks like a spread turkey wing, all jagged feathers showing, up and down with the wild stock market volatility and relative flatness in gold. It closed today at 14.01 oz (G$289.61 gold dollars), down 0.15%. DiG has fallen and is falling out of its overbought state. MACD has turned down, as have Rate of Change and full stochastics. Next confirmation comes with a close below the 20 day moving average, now at 13.82 oz (G$285.68). 'Nother one of those 200 point down days in stocks will pop that out.

Poor, dear silver, the Rodney Dangerfield of precious metals! Dow in silver rose 0.84% to 977.73 oz. (S$1,264 silver dollars). Here, too, a closely jagged graph mirrors the struggle of a market turning over. We've seen the blow-off and are now witnessing the hovering before the plunge.

About this date in 1916 John D. Rockefeller became the world's first billionaire. In 1914 Rockefeller hired the founder of public relations, Ivy Lee (born in Cedartown, Georgia) to advise him because he had a public image a little worse than Attilla the Hun but a little better than Beelzebub. Ivy Lee advised him to carry lots of dimes in his pockets and hand 'em out to kids when he went out in public. It worked -- with the kids, at least. Probably didn't fool anybody else. The Muckraker Upton Sinclair nicknamed him "Poison Ivy" after Lee tried to send bulletins saying that coal miners shot in the Ludlow Massacre were "victims of an over- turned stove."

On 29 September 2008 as Lehman Brothers and Washington Mutual went bankrupt, the Dow Jones industrial Average fell 777.68 points, largest single day loss in its history.

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.