Thursday, December 04, 2014

Silver and Gold Prices Have Formed Little Three Day Rising Flat Topped Triangles, Which Argue for an Upside Breakout

4-Dec-14PriceChange% Change
Gold Price, $/oz1,207.50-1.00-0.08%
Silver Price, $/oz16.520.160.98%
Gold/Silver Ratio73.093-0.780-1.06%
Silver/Gold Ratio0.01370.00011.07%
Platinum Price1,245.4018.401.50%
Palladium Price801.454.600.58%
S&P 5002,062.34-2.41-0.12%
Dow in GOLD $s306.440.040.01%
Dow in GOLD oz14.820.000.01%
Dow in SILVER oz1,083.54-11.43-1.04%
US Dollar Index88.64-0.37-0.42%

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
The GOLD PRICE lost a buck to close $1,207.50. Silver, on the other hand, caught the bid today and rose 16.1 cents to close at $16.52, ABOVE $16.50! Ranges for both were very tight and sleepy, $1,213.50 - $1,201.10 and $16.68 - $16.38.

Both silver and GOLD PRICES have formed little three day rising flat topped triangles, which argue for an upside breakout. All indicators whisper, "Higher prices in store!" So what's holding them up? That's what bothers me.

We are right back at the same daily stalemate but $10 higher in gold and 30 cents higher in silver. Great rallies are not made of such stuff.

Sometimes markets appear calm when in fact they only reflect a fragile balance where opposing forces are equal but a tiny change can send one side fleeing.

The gold and SILVER PRICE cannot stagnate. They must move forward or fall back.

Unless you want them to completely overrun you and make you miserable, one thing you learn about training children is "never threaten," because threatening wears out on children very fast. Did y'all ever watch a mama or daddy keep telling a child, "Now stop doing that or I'll have to punish you"? It becomes a refrain repeated endlessly because the child knows the parent is only bluffing. They lose all fear the parent will really act.

So Mario Draghi, head criminal at the European Central Bank, put the fear into the public a couple of years ago when he announced he would do "whatever was necessary" to save the euro and boost the Euro economy. Well, now about every time the ECB equivalent of the Fed's FOMC meets, Draghi comes out and threatens to unleash Quantitative Easing. Today he threatened again, but put it at "early next year. Then he said, "Early means early. It doesn't mean at the next meeting."

What's scary is, he might not be threatening. He might seriously promote QE/money printing for the euro. He really is that thick-headed, like the rest of the world's central bankers. Bad economics, Keynesian ideology, and high salaries for sinecures, it's a bad combination, like giving teenage boys cases of beer and car keys. Only difference is, the teenage boys will only hurt themselves. Central banking criminals will hurt us all, but not themselves.

First half key reversals appeared in number of markets today. Odd.

In stocks both the Dow and the S&P500 put in tiny key reversals, but there it is anyway: break into new high territory with a close below yesterday's. Another lower close tomorrow and Monday clinches it. No lower close, no reversal.

Dow closed at 17,900.10, lower by 12.52 (0.07%) and the S&P500 ran right alongside, down 2.41 (0.12%) to 2,062.34. When confidence collapses, it will collapse suddenly.

Dow in Silver and Dow in Gold were roughly flat today. Dow in silver dropped 0.94% to S$1,396.30 ($1,079.95), still beneath the 20 DMA. Dow in Gold rose 0.2% to G$306.77 gold dollars (14.84 oz).

My, O, My, the US dollar index didn't do what it was supposed to after yesterday's tee-tiny breakout from the range. Today it rose to a new high for the move, but closed lower for the day: first half of a key reversal. Having left behind 37 basis points (0.42%), the dollar index closed at 88.64. To confirm a breakdown needs to (1) close below the 20 DMA (88.04) AND (2) break below the range's bottom boundary, tomorrow about 87.45.

The euro rose today, perhaps on Draghi's threats, only slightly more substantial than moonbeams. Anyway, the euro rose 0.57% to $1.2378, cancelling the breakdown from its even-sided triangle and rising all the way up to the triangle's upper boundary and the 20 DMA (1.2452) but losing its nerve to close at $1.2378, barely above the triangle's bottom boundary. Strong as boiled cardboard.

Yen surprised everybody by rising a miniscule 0.3% today to 83.50.

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.