Thursday, November 06, 2014

Silver and Gold Prices are Severely Oversold

6-Nov-14PriceChange% Change
Gold Price, $/oz1,142.30-3.10-0.27%
Silver Price, $/oz15.39-0.03-0.17%
Gold/Silver Ratio74.214-0.076-0.10%
Silver/Gold Ratio0.01350.00000.10%
Platinum Price1,198.00-13.50-1.11%
Palladium Price752.25-5.25-0.69%
S&P 5002,023.5711.470.57%
Dow in GOLD $s317.662.110.67%
Dow in GOLD oz15.370.100.67%
Dow in SILVER oz1,140.456.410.57%
US Dollar Index88.210.670.77%

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
On Comex the GOLD PRICE lost another $3.10 to close at $1,142.30. The SILVER PRICE flatlined, down 2.6 cents to 1539.2c.

Relative Strength Index for silver and GOLD PRICES has returned to severely oversold level. Versus "oversold" at 30, silver's RSI stands at 19.88, gold's at 21.38. Full stochastics are at lows and are trying to turn up. No sign of a reversal yet, although the speed of the fall has slowed.

I read an article last night by Paul Craig Roberts and Dave Kranzler at entitled "American Financial Markets Have No Relationship To Reality." They point out that recent falls in gold and silver have been accelerated by massive paper gold sales on the futures market, 47 tonnes' worth within a few minutes, or sales of 25 tonnes on the Comex Globex system at 3:00 a.m. Eastern time, about as thin a market as a manipulator might wish. Another 38 tonnes were sold the same day shortly before Comex opened. Remember these are tonnes of paper gold. Naked shorts.

While I will admit that profit-maximizing sellers don't do such things, practically it doesn't matter whether this is a government/central bank conspiracy or simply trading sharks attracted by blood in the water. The outcome is the same. And ultimately, since all the manipulation in the world couldn't keep silver and gold from rising 2001 - 2011, the present weakness lies with silver and gold. By that I mean that confidence in scabrous fiat currencies and criminal central banks is so high that nobody's interested in gold. After all, isn't quantitative easing working? Ain't stocks rising?

Well, when it stops working, and it will, abruptly, things will turn.

Something near every day a reader writes to inform me how markets are rigged and it's pointless to attempt technical analysis because the gummint and Fed control everything. If that were true, only thing we could do is give up hope and take a job working for the gummint, because it would be god. If I don't accomplish a blessed thing except to remind y'all every day that, in spite of what folks around you may believe, gummint and central banks are not god, do not have godlike powers, and for the most part couldn't pour pea soup out of a boot with instructions written on the heel, well, durn, I'd be as contented as a skinny flea on a fat cat.

Don't y'all understand that they WANT you to believe the myth of their invincibility? The entire monetary and financial system is a CONFIDENCE GAME, and it blows apart into instantaneous smithereens if confidence ever wanes. They're not invincible, they're hyenas and vultures. They do a great job on something weak and for the moment powerless. Against the strong and living they're not so successful, or so brave.

Do central banks and government try to manipulate gold and silver? I don't doubt they do, but manipulations only work for a while, and when markets are weak. Against the rising tide of a primary trend, eventually they fail. This time, too.

I think the power of Mario Draghi's tongue is fading. He said about the same thing that's been working for him so long -- "We're gonna do something" -- but it just didn't have much bang today. By the way, y'all look at a picture of him and tell me if somebody hasn't twisted his whole face to the right? Or maybe he caught it in a door? Anyway, he threatened to stimulate if folks and the economy don't straighten up.
Draghi's threat and better than expected US jobless claims are the nearest causes for stocks rising today. Hush! Never mind that the jobless claims will be revised in the opposite direction in a week. They won't publish that.

So stocks rose, the Dow up 69.2 (0.4%) to a new high close at 17,553.73. S&P500 also hit a new all time high at 2,029.73, up 6.16 (0.3%). Dow closed plumb up on that overhead megaphone pattern boundary I mentioned yesterday, and the S&P500 just a mouse-ear below it. I am just watching the magic of fiat money at work, with my mouth open like a fool at a tennis match.

US dollar index passed that 3%-above-breakout test today by closing at 88.21, up 67 basis points or 0.77%). Indicators are overbought and toppy, but that topping process can last a while longer.

Euro finally broke today, down 0.88% to $1.2375, signaling much lower prices to come. No curb before it hits $1.2042, the 2012 low. And the yen crumbled 0.42% to 86.85 cents/Y100. Yen has passed its 2008 low and hasn't been this low since 2007. No safety net before 80.55 cents/Y100, the 2007 low.

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.