|Gold Price, $/oz||1,163.30||9.10||0.79%|
|Silver Price, $/oz||15.15||0.17||1.14%|
|Dow in GOLD $s||311.25||-7.14||-2.24%|
|Dow in GOLD oz||15.06||-0.35||-2.24%|
|Dow in SILVER oz||1,156.36||-30.59||-2.58%|
|US Dollar Index||96.47||-0.60||-0.62%|
|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|
Bounce in silver and GOLD PRICES today tells us nothing, really. Day after a huge drop a bounce often happens. Dead cats bounce when you drop 'em off a 40 story building, but that's not a sign of life. I need proof.
The gold price is certainly at a place where it might have stopped falling, given the summer seasonal pattern. But it could just as well fall further. Silver's low yesterday was $14.62, not far from that $14.16 December 2015 low. Still, we need to see some technical sign it has turned. Certainly, hitting the 3-sigma Bollinger Bands yesterday points to a reversal, but now price action has to confirm. That means a two-day key reversal or a sudden climb above $1,170 and $15.50.
Since the US Mint suspended (not often I get to use that word twice in one commentary) deliveries of silver American Eagles, premium at wholesale has risen from $2.30 to $2.75. Interesting that the better alternative, US 90% silver coin, has been gaining premium and now is at $2.60 an ounce over spot at wholesale sell. That rising 90% premium also promises good days for silver.
Y'all remember those old cartoons from the 1930s and 1940s when some character would hit a clock with a hammer and springs and clock parts would fly out of the clock? Imagine somebody like that hitting the world's stock markets and economy with a hammer.
It gets worse. Shanghai composite lost another 5.9% today and from the 11 June high has now fallen 32%. Like King Canute trying to command the sea, today the Chinese suspended trading in at least a third of the companies listed on the major exchanges. And Brokerage houses have been ordered to pump billions back into the market. The fun part is that most of the investors are retail investors, small time folk investing their life savings in the market for the first time. That promises a deep well of social unrest and further economic troubles.
It gets worse still. From about 11:30 today for 4 hours the New York Stock Exchange halted trading due to a "computer glitch". Exchange officials were quick to deny it was a cyber attack, which forces me to recall the French proverb, "Nothing is confirmed until officially denied." Truth is, business and government officials in the US have told so many lies for so long that you never know what to believe: is it real, or Memorex? Oddly enough, the Wall Street Journal experienced computer troubles, too, and United Airlines was forced to ground all US flights because of, you guessed it, computer issues.
If you were going to wage war, what a efficient way to wage it, crippling your enemy's economy without his ever knowing where the attack comes from, leaving him absolutely defenseless.
Enough of this fun, let me share something with y'all. Day before yesterday an overseas friend sent me a summary of gold's summer seasonal rallies from 2001 through 2014. Now y'all listen, this is important: from the summer low in June, July, or August to the next peak, gold has rallied every single year an average of 14.9%. Yes, that does include the last 4 bear years.
I couldn't resist doing the same for silver. Every single year 2001 - 2014 silver rallied off summer lows (one on 30 May, rest June, July) substantially -- an average 26.9%. No exceptions.
I checked year-end prices, too. On average from the summer silver low to year-end silver gained 15.6%. In only 5 years was the year-end price not higher than the summer low: 2008 (financial crisis), 2011, 2013, and 2014, those last bear market years.
I'm counting that as supporting my presupposition we are seeing summer lows, or at least decreasing the riskiness of it.
The halt on the NYSE did not mean stocks could not be traded on other exchanges, so investors took advantage of that flexibility to SELL elsewhere. Dow waterfalled 261.49 (-1.47%) to 17,515.42 -- the lowest close since 3 February. S&P500 cascaded 34.66 (-1.53%) to 2,046.68.
You are seeing gator jaws within gator jaws within gator jaws snapping shut.
Dow is now firmly below its 200 DMA. So, too, is the S&P500, at its lowest since March. Ditto for the Dow Jones Composite, Dow Transports, and Dow Utilities. It's a breakdown whichever way you look.
|Dow in Gold|
|Dow in Silver|
US dollar index - Thanks to the Nice Government Men?? -- fell back today below 96.50 to 96.47, losing a large 60 basis points (0.62%). Odd, but it doesn't invalidate the uptrend, or even the breakout. It fell barely back into the even-sided triangle, and should continue rising.
Raising more suspicions, the euro, which has all the same charms going for it as the anthrax bacillus, rose 0.66% today to $1.1076. In currency markets, when things don't trade as expected, there's a reason, and usually it's political.
Treasury yields fell slightly today (bond prices rose slightly), with no sign of reversing. Uptrend has been broken in the yield.
On 8 July 1889 the Wall Street Journal began publishing.
On 8 July 1896 presidential candidate William Jennings Bryan gave his famous cross of gold speech at the Democratic Convention in Chicago. Arguing for a return to gold/silver bi-metallism and away from the gold standard that had been imposed on the US, Bryan concluded his speech, "You shall not press down upon the brow of labor this crown of thorns; you shall not crucify mankind upon a cross of gold."
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.