|Gold Price, $/oz||1,205.30||-6.40||-0.53%|
|Silver Price, $/oz||17.02||-0.18||-1.02%|
|Dow in GOLD $s||291.46||6.23||2.18%|
|Dow in GOLD oz||14.10||0.30||2.18%|
|Dow in SILVER oz||998.78||26.21||2.70%|
|US Dollar Index||85.33||-0.43||-0.50%|
|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|
Here's what's odd. Comex closes at 1:30, but all the damage the FOMC minutes might have down had already been done. Then a little after 3:30. long after the news had broken, gold gapped up $6 and launched heavenward. In the aftermarket it's trading at $1,223.60, $18.30 (1.5%) higher! Silver is selling for $17.45, 43.5 cents higher than the close -- 2.6% higher!
But look here. The GOLD PRICE had crucial support at $1,206, and despite the Nice Government Men's best efforts -- whoops, I didn't mean to write that. The reader will please ignore that remark. Anyway, gold HELD that critical support, then sprang higher.
We work with a convention of market "closes" that hardly applies in these days of 24-hour markets. How important is the Comex closing when you can still trade later all around the world? Today makes that plain. Gold's $1,205.30 close looks weak, but in fact it ran up to $1,223.60, the next resistance area, nearly $20 higher, AND above the $1,218.70 20 DMA. At $17.45, the SILVER PRICE stands only ten cents from punching through the downtrend line, and only 30 cents from its 20 DMA. Indicators have all turned up, pointing to higher prices.
Now 'tis the time to swap gold for silver, and capture this high premium.
My nightmare is that silver and gold prices would stage a big rally here, but then fail to get through $1,350 on the rally, then fall back for one last swoon. Problem is, I can't read the future. Despite the dollar's fall now, it appears to be headed much higher. That contrary wind doesn't exactly fill gold's sails. However, if the stock market has topped, the gold price will begin to shine much brighter. And metals have been correcting for three years, surely long enough.
In this every-changing sublunary world, the only constant is change. Overnight whole civilizations can collapse. I was reminded today that the Stock Market peaked on 9 October 2007 at 14,164.53 and a year later in September and October was ravaged by the Panic of 2008. On 9 October 2008 the Dow closed at 8,579.19, 39.4% off it 2007 peak. And similar carnage was wreaked on silver and gold prices.
In this sea of change, how do we find any lasting value? I might take that off into a philosophical or theological direction, but I will forebear and restrict myself to the secular world. When the guarantors of value and guardians of the law depreciate and undermine every value, what do you do? Till memory runneth not to the contrary, men have valued silver and gold. I won't say they have intrinsic value, only that men have always valued them. Also, today silver and gold are the only values that keep value OUTSIDE THE SYSTEM. Since the hilariously mis-named Bank Secrecy Act of 1970 the US government has been constructing a world-wide police state. They can cut off all your electronic credits at the flip of an electron, but that silver and gold are OUTSIDE their system. If they can't find it, they can't steal it.
But what do I know, a nat'ral born durned fool from Tennessee?
Very strange action in today's markets. FOMC minutes of last month's meeting were published today and roiled markets. Stocks ended up, dollar ended down, and metals sprang high after stooping low.
The FOMC published minutes of its last meeting today and they implied (this is like reading sheep guts to tell the future), at least in the eyes of people buying stuff today, that (1) the FOMC are in no hurry to raise rates, and (2) they weren't too keen on a strong dollar, either.
About the time that news broke the US dollar index fell off a cliff. It lost 43 basis points (0.51%) to end at 85.33. This is good news for gold, but it played out oddly as I'll explain below.
The euro woke up enough to rise 0.6% to $1.2740, still below its 20 DMA ($1.2774). However, it has floated up out of the oversold zone and its MACD has turned up, so you can expect higher prices. Despite the Bank of Japan's announcing on 7 October that it would significantly increase its monetary base, from $550 billion to $655 billion or 17.27%, the yen rose 0.4% to 92.50 cents per 100 yen. Yen has now climbed over its 20 DMA and appears set to rally. We'll see how efficiently the BoJ can poison that rally.
Bond prices rose in spite of dollar woes. Yield on the 10 year treasury fell 0.85% to 2.330%. Looks like that interest rate increase all those wise speculators and hedge fund managers were betting on isn't coming true after all. Shucks. Reading sheep guts to tell the future beats parsing the Fed's intention any day.
Stock charts look like somebody had a little advance notice how those Fed minutes might read, as stocks climbed just above unchanged and hovered, but rose as 2:00 p.m. drew closer. At the announcement stocks shot up. Dow rose 274.83 (1.64%) to 16,994.22. S&P500 gained 33.79 (1.75%).
Now I ask you, just because I like to pose as sane every now and then: Did the US economy really become 1.64% more valuable today because the Fed might suppress interest rates a little longer? To ask the question is to spotlight the mindless gullibility ruling markets, the economy, and the Fed.
Looking closer, all today's huge rise accomplished was to boost the Dow above its 50 DMA, but not the S&P500. In both cases buying trampolined off the last low. This volatility reflects bears and bulls wrestling and struggling for the prize.
The Dow is below and outside its uptrend line from March 2009. The S&P500's analogous line not stands at 1,904. Broken uptrend lines are almost as easy to repair as eggshells.
Of course the Dow in Metals rose today. Dow in silver rose to S$1,286.59 silver dollars (995.91 oz), but this sawing back and forth looks like a top running shy of momentum. All indicators still point to the earth's core.
Dow in gold rose back above its 20 DMA (G$288.99 gold dollars or 13.98 oz) to end at G$291.27 (14.09 oz). All indicators point steadily, stubbornly down.
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.