Thursday, February 05, 2015

The Gold Price Lost $1.80 Today Closing at $1,262.00

30-Jan-155-Feb-15Change% Change
Gold Price, $/oz.1,278.501,262.00-16.50-1.3
Silver Price, $/oz.17.19217.180.012-0.1
Gold/Silver Ratio74.36673.458-0.908-1.2
Silver/gold ratio0.01340.01360.00021.2
Dow in Gold $ (DIG$)277.54292.9615.425.6
Dow in gold ounces13.4314.170.755.6
Dow in Silver ounces998.431,041.0342.604.3
Dow Industrials17,164.9517,884.88719.934.2
US dollar index94.9693.68-1.28-1.3
Platinum Price1,239.201,251.7012.501.0
Palladium Price772.70794.1021.402.8

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'm one day shy of a week, but I'll be out of the office tomorrow so I am sending this today.

Odd scoreboard: silver 1.2 cents lower, the GOLD PRICE $16.50 lower, Dow 720 higher, but the US dollar index 1.3% lower. Are stocks striking out on their own trail now and leaving the dollar behind? Are gold and the dollar holding hands? Don't bet on it for long, not till the lion lies down with the lamb.

The GOLD PRICE backpedalled $1.80 (0.14%) to close Comex at $1,262. Silver stumbled 19.9 cents (1.15%) to $17.18.

Gold's weekly chart shows it has boroken its downtrend from the October 2012 high and closed above its 20 week movingg average ($1,218) but not quite above its 50week, now at $1,266.35. Still, it has begun a rally from a falling wedge and broken that downtrend. The gold price has barely broken out to the upside on a monthly chart.

The SILVER PRICE weekly isn't quite so good. It, too, is hovering between its 20 and 50 week moving averages, but has not yet punched through that downtrend line. On a monthly chart silver got near its 200 week MA ($13.74) at the 1 December low of $14.15, but has move away from that toward that tough resistance at $18.60.

On five day charts silver and gold prices still appear to be correcting in a rally, nothing more.. Silver today closed on the neckline from the upside-down head and shoulders formed November through December. Today's low was higher than 29 January's. Long as silver holds this line, it has no problem.

In all this correcting since the 22 January high at $1,307.80, gold has never closed below its 200 day moving average, now $1,254. It could trade as low as $1,225, and remain above its neckline and 50 DMA. That I am not waiting for, but I would welcome it to clear out these doldrums and the short chance to buy metals cheaper.

Stocks may spend half a year rolling over and down, but this won't be their year. This year silver and gold return to their uptrends. Don't know that they'll gain hugely the year end, but they'll be higher, and they have begun the next and greatest rise.

Both the Dow and the S&P500 had been working to penetrate that overhead resistance posed by the downtrend line from the December high -- unsuccessfully. Today they did, but whether that will lead to much more than another exercise in volatility futility remains to be seen.

Dow added 211.86 (1.2%) and ended at 17,844.88 (just for reference, the December high close was 18,053). S&P500 jumped 21.01 to 2,062.52 (December high 2,093.55). Possible is a test of that is a test of that last high, much less likely it will be exceeded.

Dow in gold rose 1.55% to end the day at G$292.30 gold dollars (14.14 troy ounces). That leaves it above the 20 dma (G$286.92 or 13.88 oz) and barely back withi the Gator Jaws it fell out of in mid January. May rally all the way to the 50 dma G$298.29 (14.43 oz), but that will require much higher stocks or lower gold.

Dow in silver ascended 1.87% for a day-ending S$1,340.51 silver dollars (1,036.80 oz). In about the same case as the Dow in Gold, maybe aiming for the 50 DMA at $1,369.78 (1,059.36 oz).

I remind y'all that a Gator Jaws pattern, though near universally fatal, can frustrate the sanctity right out of you. You think they've broken down for good, then they trade all the way back up to the top jaw. I don't expect that this move, because it would require either a huge upmove in stocks or huge fall in gold and silver. I repeat: The roll-over downwards in the Dow in Gold and Dow in Silver both switness that stocks' trned against gold and silver has turned down. That implies that stock price highs ande sivle rand gold price lows lie behind us, and that metals will gain very strongly against stocks in coming years. Last time that happened stocks lost over 85% against metals.

US Dollar Index showed today it ain't feeling chipper. Fell all day and closed near the low, losing 58 basis points (0.62%) along the way to roost at 93.68. Dollar index is still an iffy deal here. Id like to see it bust clean through that 20 DMA (93.71) to confirm a correction. I reckon that's coming, I just want to see it. I trust my friends, but I still count my change.

I had the Euro's price wrong yesterday. It cllosed $1.1339, not $1,1534. Forgive me

Today the euro flew like, flew like, well, flew like a turkey up 1.23% to $1.1478. Still wasn't stong enough to breach its 20 DMA at 115.06, but it does have a cute leetle uptrend going. Angle of ascent ain't nothing to brag about, but it is positive.

For 5 days the yen has been squnched and flat. Hardly moving, although last three days it has spent outside the downtrend line. Just walked through, then sat down. Lost 0.26% to 85.07 today.

Catches my eye that the US 10 year treasury not yield has been rising for three days. Apparently complacency has returned and investors want something other than safe haven US dollar bonds. (When a yield riseth, the bond price falleth.) Speaking of yields and interest rates, yen and euro government bonds are offering NEGATIVE interest rates. You give the German government $100 to hold for a year, and get back $98. Person would only pay a govenrment to hold his money if (1) he was stone-post dumb or (2) he felt it safer there than in a bank. Dollar bonds don't pay much more. That takes the sting out of the reproof often thrown in gold's face that it "pays no interest." Now 'tis a different question. Do you want to guaranteed lose a little money in "safe" bonds, or own gold that might rise?

I read an interesting article a few days ago that presented me with an idea that was new. Interest rates have been dropig for about 30 eyars. For the last almost 7 years they've been near zero. Doesn't that imply that capital has been consumed as what would otherwise have been interest collectors have been forced to live off their capital? Just low rates over a long period might be enough to shrink their capital.

Makes my head hurt like somebody hit it with an ax, just to ponder how much damage governments and central banks do to us.

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.