|Gold Price, $/oz.||1,214.10||1,192.20||-21.90||-1.8|
|Silver Price, $/oz.||17.477||16.78||0.697||-4.0|
|Dow in Gold $ (DIG$)||291.38||294.93||3.56||1.2|
|Dow in gold ounces||14.10||14.27||0.17||1.2|
|Dow in Silver ounces||979.18||1,013.69||34.51||3.5|
|US dollar index||85.75||86.81||1.06||1.2|
|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|
Let's go for the big picture. Gold's weekly chart has oscillated over and under the downtrend line all year, and for the last three weeks has been under. Not enough steam yet to throw a leg over that line and leave it behind. On the gold price monthly chart it has closed right at the uptrend line from 2001. If it was ever fish or cut bait time, it's now.
Depending on how you draw the downtrend line, silver is over or under. I have drawn it to the first two tops from the March 2011 peak, and in the last year silver has been ABOVE that line. This week it merely traded down to it, but closed above.
The SILVER PRICE monthly log scale chart since 2001, it has traded all the way down to the uptrend line. Once again, folks, silver must fish or cut bait. Hard to overstate how important it is to hold this line.
The GOLD PRICE five day chart shows a collapse today beginning just before 10:00 a.m. Once it broke through $1,205, it had to fall until it found support at $1,190. I probably don't need to point out to y'all that this is ten bucks above the June 2013 and December 2013 lows.
Although silver has sunk through its lows made last year, the gold price has not. And it is not unusual for silver in a correction to show itself weaker than gold. Ordinary, in face. But also gold approaching the $1,180 support also carries the caution that the more times support is challenged, the more likely it is to give.
Silver fell off about the same time the gold price did, breaking $17.00 and plunging to a $16.64 low.
There's really not much else to say here. Either silver and gold prices hold here or drop much further. The world looks very odd this week, however, with both stocks and gold and silver and platinum and palladium sinking while the US dollar rises. I won't say it's as amazing as seeing an axe head float, but it's in the same county. I'm not at all joyful to see stocks cracking, because they will take the economy down with them. I wasn't kidding about Act II of the Great Recession opening. It did. This week.
Only market that didn't tank this week was the scrofulous, pestilential, world parasite US dollar.
Volatility (or Nice Government Men) cranked up to raise stocks on Friday to keep their true sickness hidden. Yen and Euro are boring holes in the bottom of the chart to crawl into. Gold and silver waterfalled this week, and platinum and palladium may get cheaper than dirt.
US dollar index gained a rare 107 basis points (1.25%) to close at 86.81 today, shooting up on that goofy jobs report I mentioned above. Highest level in 4 years. These markets have been so crazy I'm about forecast-shy, but looking at the dollar course May thru today, the second upmove (of three) could have been completed today. Even if the dollar turns around, it may be too late for the yen and euro. Remember that the dollar is those currencies' reciprocal: dollar rises, yen and euro fall. Same is true but not as mechanically for gold and silver. If the dollar has completed a rally for a while, then it's correction could last the rest of the year EVEN IF it intends to rise to 92.
Euro lost 1.22% to close $1.2515, a new low for the move. Since May the euro has lost 10.2%, and now stands at its lowest since September 2012. In the bigger picture it's easy to imagine that the dollar's rise was born in an agreement with the Europeans to let the euro fall and support their exports. That's the way Nice Government Men and Central Bank Felons think.
Yen had rallied two days running -- hard to use that word "rally" with the yen -- but collapsed today, not quite to a new low. Lost 1.24% to 91.10 cents/Y100.
I run out of hyperbole trying to describe how overbought the dollar is and how oversold the other two scrofulous fiat currencies are. Suffice it to say a dollar correction/euro and yen rally is coming soon.
Stocks showed that "volatility of the topping" today again. Dow rose 208.64 (1.24%, coincidentally just like the dollar) to 17,009.69 while the S&P500 leapt 21.73 (1.12%) to 1,967.90.
These are not good numbers, and October will likely yet treat stocks unkindly. On my weekly and my monthly charts the Dow has broken down from the uptrend in force since March 2009. Re-read that, it is accurate. Same holds true for the S&P500, but its monthly close today is plumb next to the line -- below, but right at.
Whether September 19 market the ultimate high in a 300 year cycle remains to be seen. The speed and extent of this fall will tell us whether it is a correction or the end of the stock bull market.
Dow in gold today made a new high for the move, 14.28 oz (G$295.19 gold dollars), which may (but does not yet certainly) blow my theory that stocks have turned over against gold.
Dow in silver made a new high for the move, too, at 1009.78 oz (S$1,305.57 silver dollars).
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.