|Gold Price, $/oz.||1,195.30||1,186.00||-9.30||-0.8|
|Silver Price, $/oz.||16.112||15.734||-0.378||-2.3|
|Dow in Gold $ (DIG$)||312.23||310.83||-1.40||-0.4|
|Dow in gold ounces||15.10||15.04||-0.07||-0.4|
|Dow in Silver ounces||1,120.51||1,133.40||12.89||1.2|
|US dollar index||90.32||91.43||1.11||1.2|
|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|
I continue to watch a potential upside-down head and shoulders pattern in the gold price. You can see that chart here:
Ooooo . . . Looks like the trouble in Greece is beginning to bite. US dollar index (a trade-weighted average hit its highest level since December 2005 while the Euro reached a low not seen in the depths of the 2011 Crisis, indeed, not since June 2010. More: US stock indices all dropped today, save the Dow. Silver and gold remain listless and range-bound and have lost ground in the last week.
The problem with rising wedges on a chart is that every book proclaims "they usually resolve downward." In my experience, however, rising wedges in bull markets sometimes -- often -- break out to the upside, and throw sand in your face to boot. Today the US dollar index broke out above that rising wedge and added 81 basis points (0.9%) to 91.43. Nor did the side of the upside-down head and shoulders the dollar formed from January through August 2014 point to a rise higher than 84.35. Clearly, something we are not seeing is driving the dollar index higher. I say that because US exporters cannot view with glee the dollar rising out of sight, pricing their products out of the market against their European and Japanese competitors.
One driver may be fear, now crystallizing around a renewed debt crisis in Greece. Will the Greeks default, or worse (for the Eurocrats), withdraw from the euro currency system? Or how about a war in eastern Europe with Russia over Ukraine? How about fear of stock markets around the world? I mention that because the yield on the US 10 year treasury note today dropped 2.17%. When bond yields drop, bond prices rise, so somebody was buying US bonds today. They'd have to be buying them for a safe haven, because they don't carry enough interest to make a cat sneeze, thanks to the Fed's Zero Interest Rate Policy.
Finally, last time the US dollar was anything like this high was during and after the 2008 financial panic. None of this leaves me feeling warm and cozy. And with the whole world universally bullish on the US dollar, it would be the perfect time for it to turn down. Monthly chart is hitting the 200 month average from below.
Euro hit a low of $1.1996 today and closed down 0.8% at $1.2002, lowest since June 2010. It won't stop tumbling and now the Jawbone of the Draghi has been overused so much the market isn't paying attention to him, smile he never so toothily. Japanese yen dropped 2/3 of 1% to 83 cents/Y100.
Stocks opened the day succumbing to gravity and never recovered. Dow managed to add 9.92 (0.06%) right before it closed at 17,832.99. All other indices fell, including the S&P500 that dropped 0.07 (0.03%) to 2,058.20.
Dow in metals remains in a Gator Jaws topping pattern. Dow in gold lost 0.5% today to G$309.87 gold dollars (14.99 troy ounces). Needs to confirm its earthward intention by closing below the 20 DMA (G$306.15 or 14.81 oz). After dropping 1.12% Dow in Silver closed at S$1,460.57 silver dollars or 1,129.74 troy ounces. Momentum is downward, but needs to cross that 20 DMA (S$1,418.29 or 1,096.96) and 50 DMA (S$1,401.22 or 1,083.76 troy ounces). Indicators for both point to lower prices.
I was reading across the internet today and I saw that most folks who were predicting were looking for higher stock prices in 2015. May or may not have influenced their opinion that all of 'em either wrote for stock sites or sold stocks. That near universal opinion is what's necessary for a reversal, but ain't much good for timing, cause it can persist quite some time.
Y'all enjoy your weekend!
Aurum et argentum comparenda sunt -- -- Gold and silver must be bought.
- Franklin Sanders, The Moneychanger
© 2015, 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.