|Gold Price, $/oz||1,155.20||-2.50||-0.22%|
|Silver Price, $/oz||15.44||-0.03||-0.21%|
|Dow in GOLD $s||321.70||4.57||1.44%|
|Dow in GOLD oz||15.56||0.22||1.44%|
|Dow in SILVER oz||1,164.66||16.46||1.43%|
|US Dollar Index||97.00||0.83||0.86%|
|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|
At the same time today -- about 4 a.m. Eastern -- silver and GOLD PRICES tanked and the US dollar index soared. The heavy lifting was all done by the time Comex opened, but the price of gold dipped around 11:00 to its low around $1,149.80. Must have been buyers hiding behind $1,150, because it rose from there to $1,158 and flatline the rest of the day. The silver price ranged from $15.27 to $15.90.
I can't help it, I see what I see and it looks good. Silver has left a V-bottom behind that promises at least some rally, maybe to the 200 DMA above at $16.50. Whether that will hold or it will do something more creditable than that, who knows. The gold price just trod water in the selfsame range it's held the last five days. No message there except "beneath $1,150 lurk buyers."
Commitments of traders reports have become much more bullish for both silver and gold. That leads me to suspect that after today's Greek news shake-out silver and gold prices may still rise this week. Big customers we haven't heard from since the early days of the bull market are calling again and placing serious orders. Does that mean anything?
I've been thinking. One reason for the big drops in platinum and especially palladium must be some big seller. Russia produces 75-80% of the world's palladium and 25% of the platinum, and is suffering under Western sanctions. If the Russians are selling palladium to raise money, that might account for that drop.
The futures market proverb says, "Sooner or later everything comes back to physicals." I reckon in the naïve day when that proverb began before manifold manipulations and cash settlement that was true. Still is true,really, for in the end the pricing of everything should refer back to the physical supply.
That's what's getting my attention with physical gold and silver. I see a headline on bulliondesk.com today, "Investors are simply not interested in gold at the present and physical demand is weak." Well, that ain't so in Tennessee, I'll bet you, or in the rest of the US. The premium on US 90% silver coin is right sensitive to silver price, often foreshadowing a fall or rise. Since 1 June it has risen from $1.35 an ounce over spot at wholesale to $3.10 today.
Gold coin premiums generally stay much tamer, but Krugerrands, whose wholesale buy premium has been around 1% over spot forever, have within the last three weeks crept up to 1.7%. Today I got a bad surprise when I tried to order a picayune two dozen Krugerrands and two different wholesalers quoted me two to three week delays. That sort of shortage in the gold coin market hasn't been heard of since the financial crisis of 2008.
The door into physical gold and silver is very, very narrow. It's usually easy to pass through, but when a crowd want through that door, it just clogs up. Best way not to clog with it is to walk through that door before the crowd shows up.
Well, the Greeks took a deal from the Europeans and they won't have to sell their children into slavery to pay the government's debt after all. They will however suffer deep government budget cuts, hefty tax hikes, and have to put big swaths of the country up for sale. One economist said the terms would cause Greece's economy to shrink 10% over the next 3 years, after shrinking 25% since 2008. Lesson is, you can't do business with usurers, but I doubt many folks today can even spell usurers. Loan sharks, for y'all who're wondering what I mean, the loan sharks have Greece by the throat and they're going to break their legs if they don't pay.
"The usurer loves the borrower as the ivy loves the oak."
A thought about price cutters. Folks call us from time to time and ask why we charge a little more than XYZ, the big precious metals dealer on the internet. My short answer is, "I don't aim to be the Wal-Mart of gold and silver." My longer answer is, I want to stay in business and I need to make a living. In the 35 years I've been doing this, I've seen lots of price cutters come and go. I take no pleasure in anyone's trouble, but go look at the Bullion Direct website and read the notice that's been there about a week, "Bullion Direct has experienced significant transactional delays. To avoid further inconvenience or other adverse consequences to our customers, Bullion Direct is suspending it operations as it attempts to resolve these issues." It's been a long bear market.
There's another reason I'm not studying to compete on price: our guidance into those items that net you the most gold and silver for your money, not the most heavily marketed or numismatic items, will usually pay our paltry 3.5% to 1% commission. And we are live human beings, from America, who tailor our service to your needs, not a computer program or a minimum wage order taker. And I don't exaggerate when I tell you that some of our customers over the years have added fifty percent or more to their ounces by following our gold-silver swapping strategy. When you offer people that sort of service, not many complain about 3.5% to 1% commission. But you can't please everybody.
Back to today's markets.
Stocks had as much fun as a wino at happy hour. Dow rose 217.27 (1.22%) to 17,977.68. S&P500 jumped 22.98 (1.11%) to 2,099.60. I reckon they think the Greek settlement will change something, but if they see that they've got better eyes than this nat'ral born durned Tennessee fool. It's just more of the same, not "kick the can" but "kick the debtor and bail out the banks." What happens when one day one of those debtors won't be kicked any more and bites their durned leg? Sinks his teeth in up to the bone? Truth is, NOTHING has been fixed, nothing changed, nothing reformed since 2008. Sooner or later the boil will burst -- on the whole world economy. And the predators had better pray they don't become the prey. (Back off! I've got more metaphors in here and I'll use 'em!)
At day's end investors were selling bonds, which boosted yields. Yield on the 10 year treasury note rose 0.54% to 2.430% although he 30 year bond eased off 0.06%.
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.