| 30-Oct-14 | Price | Change | % Change |
| Gold Price, $/oz | 1,198.10 | -26.20 | -2.14% |
| Silver Price, $/oz | 16.39 | -0.83 | -4.84% |
| Gold/Silver Ratio | 73.095 | 2.014 | 2.83% |
| Silver/Gold Ratio | 0.0137 | -0.0004 | -2.76% |
| Platinum Price | 1,246.90 | -23.10 | -1.82% |
| Palladium Price | 780.35 | -20.00 | -2.50% |
| S&P 500 | 1,982.30 | -2.75 | -0.14% |
| Dow | 17,195.42 | 221.11 | 1.30% |
| Dow in GOLD $s | 296.69 | 10.08 | 3.52% |
| Dow in GOLD oz | 14.35 | 0.49 | 3.52% |
| Dow in SILVER oz | 1,049.08 | 63.57 | 6.45% |
| US Dollar Index | 86.26 | 0.18 | 0.21% |
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| 3 Day Gold Price Chart |
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| 30 Day Gold Price Chart |
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| 5 Year Gold Price Chart |
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| 3 Day Silver Price Chart |
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| 30 Day Silver Price Chart |
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| 5 Year Silver Price Chart |
Face it: either silver and gold prices are making double bottoms, or they will fall a lot further.
The last lows came on 3 October at $16.78 and $1,192.20. This carries all the more meaning since these were the lowest closes in the 3+ year correction. Intraday low came for the GOLD PRICE at $1,183.30 on 6 October (the following Monday; today's low hit $1,195.50. The SILVER PRICE intraday low on 6 October was $16.60 against $16.33 today.
In itself silver's weaker performance says nothing. More volatile than gold, it always falls further on the downside.
Charts don't look quite the same, either. Gold's low today was higher than the early October low, silver's was not. Today's silver close was also lower.
Technically the picture is grim. Silver and gold prices rallied off those early October lows, but without conquering many technical targets. Now they've fallen off, and it would take a lunatic like me to say, this is one of those places that you puke in your wastebasket and buy. Why? Either this is the touchback low that proves the early October bottom, or it is the breakdown that will trim another $100 off of gold and $2.00 off silver.
Oh, I won't pull the deus ex machina of Nice Government Men out of the box and blame it on them, but I do muse in the back of my mind. How would I react if stocks were tanking and an FOMC announcement didn't quite bail 'em out? If I wanted stocks to keep floating, would I want silver or gold levitating? Or would I hit weaker silver as hard as I could and sell a batch of gold, too?
Y'all are gonna think I've gone crazy as a Betsy-bug, but wait till I explain.
First, the FOMC meeting yesterday confused the stock market but enthused the US dollar index. For the life of me I can't gulp down the titles "dovish" and "hawkish" when it comes to the Fed cause th'only word that pops to my mind is "swinish" Still I struggle through to try to understand what all these clowns mean. I think by "dovish" they mean that the central bank criminals favor more inflation, by "hawkish" less.
Rather than trying to figure out the mental transmission by which Fed watchers and markets draw their conclusions, I would rather point out their actions, for buried within those actions are their conclusions.
Stocks sold off. Dollar rose. Whatever the FOMC statement (using that word to describe a Fed utterance is an insult to the English language) said, stock investors took it to mean their gravy train had derailed, and dollar investors thought it meant the dollar would become worth more. The Dow fell 0.18% (31.44 points), the S&P500 slid 0.14%. US dollar index added 83 basis points, a huge 0.74%.
Today, however, stock buyers re-thought (or Nice Government Men re-bought) and the Dow jumped 221.11 (1.3%) to 17,195.42. S&P500 added 12.35 (0.62%, not quite as much enthusiasm there) to close 1,994.65. US dollar Index rose 0.18 to 86.26. Yesterday gold and silver held on, today they took their big hit.
Think about the whole mess around the dollar. The Fed has been pouring into the financial system as much as $85 billion a month, now suddenly all that's vamoosed. But that extra money was sloshing around the system to finance the $50 billion of new yankee government debt every month, as well as push up stocks. Now that the slosh is squeezed down to a drip, whoops, now that the trough is dry, what happens? The yankee government is GONNA get that deficit financed, and that will be sucking slosh away from stocks. Not a pretty picture, Miss Janet.
Technically the dollar index might look strong, especially with a two day breakout above the downtrend line, but step back from that chart. Chart on the right: Look at that rise from 1 July, practically straight up, then a peak in October and decline. Standard correction behavior is an A-Wave down, a B-wave up, then a C-Wave down. Often the B-wave can be stronger than a garlic milkshake, only to fool you and drop dead in a C-wave. The long preceding hyperbolic rise argues the dollar must correct for quite some time -- that is always the outcome of such spectacular rises. So perhaps the dollar is merely putting in a double top.What makes all this so irksome is that the Nice Government Men manipulate currencies more than any other market, so technical conclusions might be precisely correct, only to be defeated by the NGM's manipulations. Hence I always tremble to say anything about currencies, not being privy to whatever secret deals they have made at the BIS over rubber chicken in their monthly meetings.
But for a moment, till disproved by a higher high in the dollar index, I am willing to work on this theory, that the US dollar index is making a double top that may even reach a leetle higher than the previous 86.87 top.
Today the US dollar index added 18 basis points (0.21%) to 86.26.
Stocks may be on their way to a double top which may include a higher high, or simply correcting on adrenalin. Either way, it mattereth not. Their next big move is rugward, for a long time.
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| Dow in Gold |
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| Dow in Silver |
I spoke about the US dollar index above, but didn't mention the other scrofulous parasitic blood-sucking fiat currencies, the yen and euro. Euro today broke down from an even-sided triangle, so it should drop more. The answer to the US dollar riddle I laid out above will control here. Euro lost 0.15% to close $1.2611. Yen broke its uptrend yesterday, punching through its uptrend line and plummeting hard. Ended down today 0.30% at 91.55.
Aurum et argentum comparenda sunt -- -- Gold and silver must be bought.
- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
© 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.
