Tuesday, November 25, 2014

The Gold Price Rose $4.00 Closing at $1,197.10

25-Nov-14PriceChange% Change
Gold Price, $/oz1,197.101.400.12%
Silver Price, $/oz16.550.181.08%
Gold/Silver Ratio72.319-0.696-0.95%
Silver/Gold Ratio0.01380.00010.96%
Platinum Price1,223.6015.601.29%
Palladium Price795.605.500.70%
S&P 5002,067.03-2.38-0.12%
Dow in GOLD $s307.63-0.41-0.13%
Dow in GOLD oz14.88-0.02-0.13%
Dow in SILVER oz1,076.24-11.81-1.09%
US Dollar Index87.96-0.21-0.24%

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
Thanksgiving week or no, silver and GOLD PRICES are squandering momentum. The gold price rose $1.40 (nothing percent) to $1,197.10. Silver rose 17.7 cents (0.1%) to $16.553, its highest close since it began rising on 6 November.

The GOLD PRICE must throw a leg over resistance at $1,205 and its 50 DMA at $1,206.04. Every day it stalls here it gets weaker and weaker. The SILVER PRICE is no better -- it's taken all this time merely to float above $16.50, not even as high as where it broke down ($17.00). Okay, I'll give you this is a slow week, but if they hold up tomorrow (US commodity market is closed Friday), they're going to have to put the pedal to the metal next week, right in the aftermath of that Swiss referendum on Sunday.

Here's one last hopeful item. The GOLD/SILVER RATIO dropped below an channel boundary today and touched its 50 DMA. That ratio needs to drop to confirm a gold/silver turnaround.

On November 30 the Swiss vote on a referendum that would force the Swiss National Bank (their central bank) to halt all Swiss gold sales, repatriate all Swiss gold held in foreign vaults, and again back the Swiss Franc with 20% gold (from 7.7% today). Until 2000 Swiss law required a 40% gold backing for the franc. If the referendum passes, the SNB would have to buy about 300 tonnes (9.7 million oz.) a year for five years (as I remember).

Of course the SNB and the politicians have shifted their propaganda campaign against the referendum into high gear, but who knows how the Swiss might vote. The media will turn a no vote into a "no confidence" vote in gold, and that could slap gold around. A surprise Yes vote would help the gold price briefly, but in the long term even an increase of 300 tonnes against world gold production of 2,700 would amount to only 11%, and the Swiss wouldn't go out and buy it all at once. More than the increased gold demand, the change in public opinion expressed by a Yes vote would be a longer term boost for gold. That gives you an idea how frantic the central bankers are to see the gold referendum defeated. Maybe the fiercely independent Swiss will do us all a favor and kick the central bankers in the teeth.

Nobody wants markets to go loony during a Thanksgiving holiday week, so they probably won't.

Stocks backed off slightly today. Dow lost 2.96 (0.2% to end at 17,814.94, still at nosebleed altitude. S&P500 lost 2.38 or 0.12% to 2,067.03. Folks, this simply ain't normal, inching to new highs day after day. And "not normal" means that every day it continues, it becomes less and less normal and less likely to continue.

But what do I know? I wear overhauls and a straw hat and go barefoot so I can run from ridge to ridge easier. Can't hold ne'er a candle to them New York and Washington smarties.

Dow in Gold
The Dow in gold is offering some balm to my ragged patience. It dropped a small 0.25% to G$305.77 gold dollars (14.84 troy ounces). This was enough to dip its head beneath the 20 DMA (now G$308.22 or 14.91 oz). Chart on the right.

Dow in Silver
Dow in Silver keeps falling, down another 1.25% today to S$1,383.40 silver dollars (1,069.97 oz). Good move, but only a start, chart on left.

Silver and gold prices will keep on being tortured until these two indicators prove a downturn. By "prove a downturn" I mean below G$271.83 (13.15 oz) for the DIG and below S$1,133.50 (876.69 oz), the 200 day moving averages.

US dollar index is bouncing back and forth in what might be a continuation formation, and has not yet broken its 20 DMA (87.58). Lost 21 basis points today (0.23%) to end at 87.96. More dollar strength (a breakout from this level) would hit silver and gold like a second-story dropped anvil hits a duck on the sidewalk below.

The timid euro has reached up to touch its 20 DMA today, but couldn't work up nerve to cross it. Rose 0.28% to $1.2475. Resistance at $1.2600 needs to be taken out to give the euro credibility. Yen rose 0.3% but from a level so low it doesn't make a bit of difference. Ended at 84.78.

I have to take a trip with two of my sons tomorrow to look at a South Poll. That breed is heat tolerant, gentle, fattens on grass and not grain. Anyhow, I'll be thinking about a different kind of stock tomorrow so won't be here to send y'all a commentary.

May God bless you Thanksgiving and always always with a thankful heart for all his tender mercies!

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.