Thursday, February 26, 2015

The Gold Price Rose 0.72 Percent or $8.60 to $1,209.60, Throwing a Leg Over that $1,205 Resistance

26-Feb-15PriceChange% Change
Gold Price, $/oz1,209.608.600.72%
Silver Price, $/oz16.580.150.93%
Gold/Silver Ratio72.942-0.156-0.21%
Silver/Gold Ratio0.01370.00000.21%
Platinum Price1,174.704.800.41%
Palladium Price810.252.200.27%
S&P 5002,110.74-3.12-0.15%
Dow in GOLD $s311.28-2.40-0.77%
Dow in GOLD oz15.06-0.12-0.77%
Dow in SILVER oz1,098.38-10.85-0.98%
US Dollar Index95.351.121.19%

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 rose 0.72% or $8.60 to $1,209.60, throwing a leg over that $1,205 resistance. Silver lifted 0.93% or 15.3 cents to $16.583.

Gold Price
Okay, now, I am just reporting what the chart shows, not my bias (that comes later). After skidding to a halt at the post-November uptrend line, the GOLD PRICE gained yesterday then built on that gain today. A whisker, a mere whisker, stands between gold and that neckline, & not much more between it & the downtrend line from the January high -- tomorrow that's at $1,221. Should gold break through that fence, why, it'll run like a starved hog turned loose in a cornfield. (That's my bias.) Chart's on the right.

Silver Price
Why, the SILVER PRICE did the same, only better. Punched into its 20 & 50 DMAs, but strange to relate, closed about where it closed yesterday. Do I see fingerprints on that, Nice Government Men? Y'all know y'all are going to lose in the end, don't you? Silver's gonna run away from y'all & not only will you lose that battle, you'll have to take your pension in depreciating scabby US dollars. (That's bias, too.) Chart's on the left.

Silver rose intraday to hit its downtrend line from the January peak at 18.50. Barrier here is $16.70 - $16.80. If silver can close above $17.00 tomorrow, it will climb back above that neckline where it can run like a scalded dog.

To hold, any rally has to exceed the January highs to continue the rally begun from the November lows, but both silver & gold have a shot at it now.

Add St. Louis Fed Chief James Bullard to the list of Fed apparatchiki capable of goofy statements. He said the strong dollar was having only a marginal impact on US monetary policy & the economy. Ask other countries if they believe that, since they are depreciating their countries faster than a greased rat can run through a baseboard in a Currency War of competitive devaluations. This is a statement so goofy that you don't want to take either side. No country ever prospered by depreciating its currency, but when others depreciate their currencies it certainly will hurt US exports, or maybe Mr. Bullard doesn't know that US exporters have competitors in Europe and Japan?

What ticks me off most is that ALL central banks manipulate their exchange rates, and they manipulate them together. I wouldn't put it past the Fed to let the dollar rise on purpose, in coordination with the Japanese & Europeans, supposedly to warm up their leftover economies. Yes, it sounds nuts, but Our Rulers are nuts. They have been de-industrializing the US, for heaven's sake, by monetary policy since Bretton Woods!

Stocks trod water all day, trying to peek a nose above the unchanged level. Dow sank 10.15 (0.06%) to 18,214.42. S&P500 went underwater 3.12 (0.15%) to bob slightly underwater at 2,110.74. Today's charts look sick & weak, up and down, unable to rise through unchanged. Something's gone out of them.
Remember the picture from yesterday? I'm wondering whether new highs in stock indices world wide are genuine upside breakouts that will lead to bull market extensions, or merely fakeouts. Add to that the Dow in Gold & Dow in Silver which are approaching the top jaw of a Gator Jaws (broadening top). Tis the nature of broadening tops to wear you out with back & forth, but the Dow in Silver & Dow in gold have been reaching for the top jaws, which suggests they will reverse soon. If so, that would brand the stock breakouts fakeouts.

Another complication: today silver & gold prices both rose in the teeth of a strong dollar (up 1.2%!). Silver's up 2.4% & gold 1.06% in the last two days. Makes yesterday's musing about a gold & silver rally look a bit more sensible.

Dollar index soared a monstrous 1.2% today, 112 basis points, to 95.35. Catalytic news the media gave was that a "flurry of economic data" was released that sent the dollar up. I don't know Sic 'em from Come here about that, but technically the scrofulous, scabby, unbacked & wholly imaginary US dollar index broke out of a long even-sided triangle, above it's last two highs (95.23) so enough to qualify as an upside breakout.

Oh, and did the euro swoon, like Count Dracula contemplating a wooden stake or the German finance minister facing Yanis Varoufakis across the table! Euro today plunged 1.45% to $1.1199 on its long slide to its intrinsic value, zero. Yen lost 0.46% to 83.67, but remains in its tight range. Euro shot out of a triangle like puncturing an artery. Maybe the European Central Bank ought to hold a garage sale, pump up that euro.

Ten year treasury note yield rose 2.39% to close today at 2.016% (bonds fall when yields rise). Although that places the yield above the 20 & 50 DMAs, the rush out of bonds seems to have ended with a yield peak nearly two weeks ago. For the moment bond prices are not threatened, but worth watching because panic usually shows there first.

West Texas Intermediate Crude fell again today, 4.13% to $48.92/barrel. Looking like it will break down again. Fed-heads are talking about how much falling oil prices will help the economy, but I talked to a friend in an oil boom town where the population had risen from 100,000 to 140,000 in four years. In the last month they lost 17,000 jobs. How will that help the economy?

Note: There's a fairly large piece of land that's come up for sale right near us. People mention to me to keep an eye open for something, but I never know whether they are serious or not. Send me an email at franklin@the-moneychanger with the word "Tennessee" in the subject line & I'll send you details. It's 250 acres.

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.