|Gold Price, $/oz||1,181.70||-13.60||-1.14%|
|Silver Price, $/oz||15.74||-0.37||-2.28%|
|Dow in GOLD $s||315.55||3.32||1.06%|
|Dow in GOLD oz||15.26||0.16||1.06%|
|Dow in SILVER oz||1,145.72||25.21||2.25%|
|US Dollar Index||90.53||0.21||0.23%|
|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 took no safe heaven at all, but the yield on US government treasuries sank, indicating bond prices were rising because somebody is buying them. Merciful heaven! What kind of world do we live in where the scrofulous US dollar looks like a safe haven?
Silver and gold trading over Christmas week made no sense at all. Down $16.20 on the 22nd, down $1.80 on the 23rd, Down $4.40 on the 24th, up $21.80 on the 26th. That looks like floor traders pushing a thin market around. And today the gold price lost $13.60 (1.1%) to end at the equivocal $1,181.70, a price that blows hot and cold out of both sides of its mouth. The SILVER PRICE lost 36.8 cents or 2.3% to $15.744. These are about the prices posted on 19 December.
But looking at the chart, they may make some sense. Gold might -- might -- be forming an upside-down head and shoulders with a right shoulder bottom at $1,183, and a left shoulder bottom about 1170, and the bottom of the head at that $1,130.40 intraday low on 1 December. Neckline runs from $1,255 through the last peak at $1,239 and today stands about $1,230. If that is what gold is up to, it should take another two to three weeks to round out the shoulder and reach the neckline. A close below $1,170.70 invalidates this pattern. Here's a picture of that:
Meanwhile the gold price stands below its 20 ($1,200.31) and 50 ($1,196.54) day moving averages, and the path of least resistance is down. Thus if it holds on here and keeps rising, my upside down HandS makes more sense.
Silver, too, remains below its 20 and 50 day moving averages ($16.28 and $16.34). No sign it intends to go anywhere. Yes, you have two lows separated by a spike low, but no successful upward force yet.
In other words, both silver and gold prices look just as sorry as they looked this time last year, right before they went on an upward tear that lasted till March.
Stocks have been eking out new highs day by day, without much meaning. Today the Dow lost 15.48 (0.90%) to 18,038.23 while the S&P500 made a new high at 2,090.57, up 1.8 (0.09%). This hovering to new highs only shows that the sellers are all on vacation. Now it might be that after the adults come back after New year stocks might make significant new highs, although they look so tired and are carrying so many inward signs of exhaustion that doesn't seem likely to me. Or, it might just be that all the pure fiction of a "recovering economy" might begin to evaporate, like the mental hoarfrost it is, in the harsh sunlight of economic reality. I have in mind, of course, the hash the Fed has made of the US economy by keeping alive the vampire businesses that ought to have had wooden stakes put thru their hearts two or three panics ago. When the Fed tries to "normalize" interest rates, skeletons are liable to come tumbling out of closets.
Dow in gold hit overhead resistance near the old low, bounced down, then up. Ended today at G$315.24 (15.25 troy ounces), up 1.03%. Chart on the right:
Dow in silver is tracking along with gold, sawing back and forth. Both remain in a Gator Jaws pattern, which eventually will snap shut and send them both plunging. Dow in silver chart is on the left:
Greece is falling apart again, but in this Best of All Possible Worlds nobody seems to notice. Greek Prime Minister called elections for next month, but it looks like the socialists will win, who threaten to back out of austerity measures and probably default on some of the debt. Strategic question is, will they withdraw from the euro, or will the Germans keep on passing them dough to keep them in the euro and to keep European banks solvent?
Speaking whereof, the US dollar index today traded up 21 basis points (0.23%) to 90.53. All these little daily gains have pushed the US dollar index back up into the rising wedge it once tried to fall out of. Chart on the right:
Wow, what wondrous markets. Breakouts that start but never finish, collapses that mysteriously reverse, markets that just never can seem to advance. What? What do you mean, Nice Government Men's fingerprints?
Euro sank to a new low, $1.2152, down 0.41% but no evidence of a panic out of euros. Probably too late to panic anyway. Yen closed down 0.32% at 90.53 cents/y100. Probably getting ready for the next plunge. Abenomics, which is the same old Keynesian folly, ain't working for the economy but it is gutting the yen jes' fine.
I'll never forget a remark the late Harry Browne made to me in 1993 when I was interviewing him for Silver Bonanza. We were talking about the gold and silver runs in the 1970s, and he made this point: "It's the preceding government price suppression that really drove those markets, years and years of suppression. The price snaps back all at once." Corollary is, that the longer gold and silver are suppressed, the greater the eventual snapback.
Eventually the snapback will come. Be patient.
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.