|Gold Price, $/oz||1221.20||2.60||0.21%|
|Silver Price, $/oz||17.379||-0.264||-1.50%|
|Dow in GOLD $s||286.85||-5.09||-1.75%|
|Dow in GOLD oz||13.876||-0.246||-1.75%|
|Dow in SILVER oz||975.07||-0.39||-0.04%|
|US Dollar Index||85.15||0.36||0.42%|
|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 SILVER PRICE is egregiously oversold; RSI stands at 14.95. Yet silver also stands just above its 13 year uptrend line, which ought to catch and hold it. Silver tentatively has made a double bottom around $17.30. Watch that number.
GOLD/SILVER RATIO today hit a new high at 70.269. This takes it back about to where the great drop began in 2010. This is either the very BEST place in the world to swap gold for silver, or the very worst. I am inclined strongly to think it is the best. What would make it the worst? For gold to stop and rally here while silver keeps on sinking. Highly unlikely. How might that occur? Another 2008 style financial panic.
Other metals are beaten down as well. Palladium broke below its 200 DMA today after seven months above it, yet its not nearly as oversold as silver. Now platinum, it's as oversold as silver, but hasn't broken to a new low for the correction, as silver has.
The GOLD PRICE has established a two-legged bottom Monday and Thursday, and it climbed back over $1,220 today -- on rising volume. RSI has climbed above 30 and out of overbought-land (now 32.67), MACD is straining to turn up, Rate of Change has turned up but remains negative.
Meanwhile the whole galaxy plus a couple of planets in other galaxies are negative on silver and gold prices. Frankly, that's the best thing that could happen, because it would mean we have run out of sellers.
Watch for a sharp upward reversal in silver. That will be your signal to buy.
Speaking of the stock market, it dove off a cliff today. Dow lost 264.26 (1.54%) and ended at 16,945.80. S&P500 lost 32.31 (1.62%) and closed at 1,965.99.
A few footnotes: Monday was the aftermath of the Alibaba IPO which became the world's largest -- sure sign of a top. The last four days have seen three digit moves in stocks, down, down, up, down. That extreme volatility characterizes topping markets. That turns the current trend unarguably down.
(First a note about the RSI. Relative Strength indicator measures speed and change of price, and oscillates between zero and 100. However, it's overbought when above 70 and oversold when below 30.)
Look inside. The Dow sliced through its 20 DMA (17,100.57) and fell nearly to its 50 DMA (16,936.47). RSI fell below 50 (momentum is downward). MACD turned down. Gravity is wholly engaged and operational.
Inside the S&P500 looks even worse. It opened at the 20 DMA and plummeted through the 50 DMA (1976) and just kept on sinking. RSI reads 41.26, MACD dropping. The S&P500 is approaching the uptrend line that has held it up since mid 2013, and today it fell through its last low.
Dow in gold zagged down again, losing 1.91% and closing at 13.87 oz (G$286.72 gold dollars). First tripwire confirming a downward reversal is the 20 DMA at 13.74 oz (G$284.03). RSI is plunging, down from 78.90 a few days ago to 57.08 today. MACD MA has turned down, and the rate of change has double peaked and turned down.
Dow in silver hooked down, but only 0.25% to 971.77 oz (S$1,256.43 silver dollars). Remains grossly oversold with the RSI at 78.77, but won't stay there long with stocks dropping like a piano out of a third story window.
The US dollar index is monstrously overbought (RSI at 77.25) but still rose 19 basis points (0.23%) to 85.35. Euro dropped to a new low for the move at $1.2746, down 0.26%. Yen is showing some sign of life, rose 0.29% to 91.98 today. MACD trying to turn up.
Ten year treasury yield fell today, probably cutting off that embryonic desire to rally. Scared money flooding out of stocks into treasuries would have driven their price up and the yield down. Looks set to drop further.
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.