Tuesday, December 09, 2014

Silver and Gold Prices Exploded Today: Gold Shot Up $36.80 or 3 Percent

9-Dec-14PriceChange% Change
Gold Price, $/oz1,281.5036.802.96%
Silver Price, $/oz17.080.875.33%
Gold/Silver Ratio75.025-1.733-2.26%
Silver/Gold Ratio0.01330.00032.31%
Platinum Price1,246.309.900.80%
Palladium Price812.10-4.90-0.60%
S&P 5002,059.82-0.49-0.02%
Dow in GOLD $s287.15-9.34-3.15%
Dow in GOLD oz13.89-0.45-3.15%
Dow in SILVER oz1,042.16-58.75-5.34%
US Dollar Index88.72-0.00-0.01%

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
Silver and GOLD PRICES exploded today Gold shot up $36.80 (3%) to $1,231.50 while silver rose an open-mouthed 86.5 cents, 5-1/3%!

News reports claimed that the GOLD PRICE was jumping because declines in stock market were sending investors into gold as a safe haven. Mmmm. Why didn't that happen in October, then?

No, there's something weightier here, a change in sentiment, waning confidence in financial assets and markets. If that's what we're seeing, my, gold and silver will jump sure enough.

The gold price smashed through all the resistance from $1,200 to $1,205, then crashed through $1,218-$1,225, and never stopped until it hit $1,239. This slammed gold's nose plumb up against its upper channel boundary, so it might back off tomorrow, unless stocks dive again. The real test coming up is a that last high, $1,255.60.

Rule is that you buy the breakouts -- at least, the convincing ones, and this one convinces me. If the gold price breaks above $1,255.60, then it will be time to buy more. Up above at $1,350 is the Fish or Cut Bait Line.

To early to say with certainty that we have seen the lows, but as a working theory, that'll do.

The SILVER PRICE just SMASHED the chart. Cut through the overhead downtrend line like it wasn't even there and jumped to a $17.23 high. Silver backed off a little, and closed at 1708.1, but that's WAAAY above resistance and the 50 DMA. Chart on the right:

Buy the breakouts. Yes, there's a chance this will play out, but for right now I have to say, buy the breakouts.

I make it a point not to trot out Conspiracy to explain every change in markets, not only because I don't believe the Money Interest (as the 19th century used to call them) controls everything like God, nor do I believe they manipulate any more than they need to for their goals, nor do I believe they can drive markets opposite their primary trend for long.

BUT SOMETIMES the Invisible Hand (and that ain't Adam Smith's) is so heavy and obvious that I have to say something. Today was one of those days in the stock market. It hadn't been open more than two or three nanoseconds when it sank 222.91 points or 1.25%. Then -- mirabile dictu! Deus ex machina! NGM! -- it started rising and closed the day down only 51.28 (0.29%). Ask me if I believe in the Easter Bunny. Sure, sure, he was laying eggs all over this one. After an early low at 2,034.17, the S&P500 closed down only 0.49 (0.02%) at 2,059.82.

Nevertheless, both indices cut deeply through their 20 DMAs, although they closed above them. 'Twon't do no good: market is broken. Momentum is dirtward, and momentum will win. Internally stocks have been deteriorating for some time, now it's showing. Rest of this year will be bloody.

Merciful heavens! Look at the Dow in Silver and Dow in Gold!

Here's the Dow in Gold chart on right, Today it broke down out of the broadening top formation and sank toward its 50 DMA (G$296.43 or 14.34 oz). DiG broke G$300 today and lost 2.58% (whoa!) to G$298.71 (14.45 oz).

Dow in Silver chart on the left, Like the DiG, Dow in silver broke the bottom boundary of its megaphone pattern, and even punched through its 50 dma (S$1,343.42 or 1,039.05 oz), plunging 4.7% to S$1,343.28 (1,038.94 oz).

Till y'all are sick of hearing it I'll keep telling you, this is the most important indicator I watch, because it reveals the primary trend of stocks against silver and gold. We will get final confirmation of a turn when both indicators fall through their 200 DMAs at G$274.31 (13.27 oz) and S$1,153.24 (891.96 oz).

Meanwhile the mighty US dollar index, tick on national prosperity, fat leech of economic swamps, tumbled 0.48% or 43 basis points to 88.72. Here's a link to that rising wedge (green lines) I've been talking about, chart on right. In today's trading the dollar punched through the bottom boundary of that rising wedge in a kind of preliminary breakdown. It hit the 20 DMA (88.21) and bounced up, closing barely within the wedge. Dollars tomorrow will be cheaper than dollars today.

The euro gapped up and hit its 20 DMA above and the top boundary of the falling wedge pattern, but then sank back to $1.2373, a gain of 0.45%. When the dollar breaks down, it will break upward.

Yen showed unexpected signs of life, gapping up and touching the 20 DMA ended up 0.88% to 83.61 cents/Y100.

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.