| 22-Jan-16 | 28-Jan-16 | Change | % Change | |
| Gold Price, $/oz. | 1,097.20 | 1,115.60 | 18.40 | 1.7 |
| Silver Price, $/oz. | 14.043 | 14.216 | 0.173 | 1.2 |
| Gold/Silver Ratio | 78.131 | 78.475 | 0.344 | 0.4 |
| Silver/gold ratio | 0.0128 | 0.0127 | -0.0001 | -0.4 |
| Dow in Gold $ (DIG$) | 303.13 | 297.87 | -5.26 | -1.7 |
| Dow in gold ounces | 14.66 | 14.41 | -0.25 | -1.7 |
| Dow in Silver ounces | 1,145.71 | 1,130.78 | -14.93 | -1.3 |
| Dow Industrials | 16,089.23 | 16,075.19 | -14.04 | -0.1 |
| S&P500 | 1,906.89 | 1,896.27 | -10.62 | -0.6 |
| US dollar index | 99.65 | 99.62 | -0.03 | -0.0 |
| Platinum Price | 829.70 | 865.90 | 36.20 | 4.4 |
| Palladium Price | 498.40 | 491.00 | -7.40 | -1.5 |
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Both silver and GOLD PRICES are undergoing a correction of that last leg up that took silver from $13.73 to $14.59 and the gold price from $1071.1 to $1,138. This is routine action. The price of gold proved that with a test today of that old-high resistant at $1,113. Made a low at $1,110.20 and came right back. Possible to get a test back to $1,100, but I don't think so. If so, 'twill come tomorrow. Next week should be an upweek, or I'm all wrong about gold, a genuine possibility always.
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2016 is shaping up to be a great year for silver and gold.
Here are some news items I want to bring to y'all's attention:
GERMANY is speeding up its Bring-Home-The-Gold program which since 2013 has repatriated about 366 tonnes. This year the Bundesbank moved 210 metric tons of Gold back to its Frankfurt vaults, 100 tonnes from Paris and about 100 tonnes from the New York Federal Reserve.
LONDON SILVER FIX was resurrected a year ago August when most of the former price-fixers, under pressure from ongoing corruption investigations, bowed out. CME, which gobbled up all the commodity exchanges in the US, and Thomson Reuters got the contract from the London Bullion Market Association (LBMA) to work the fix. The price is set daily by HSBC, JPMorgan Chase, Mitsui, Bank of Nova Scotia, Toronto Dominion Bank, and UBS -- the Usual Suspects.
On 28 January 2016 the fix was set at $13.58, 84¢ (6%) BELOW market at that time ($14.42 in London and $14.415 on CME). One commodity strategist said this could be the end of the fix, thanks to the huge discrepancy. Par for unresponsive government and bloated corporations, the CME makes no apology or comment, but it is reported the matter is being "investigated internally." Stay tuned for further bogus explanation.
This is screaming, unashamed highway robbery. The market NEVER traded down to $13.58; today's low was $14.07. These crooks just set the price 6% below market. Anybody who uses that silver fix ever again is crazy as a betsy bug. [Other expletives deleted]
COMEX GOLD STOCKS are stored in Comex approved warehouse as "eligible," i.e., in the depository but not available for delivery against a futures contract, or "registered" i.e., "available for delivery to settle a futures contract." In a Zero Hedge article at http://bit.ly/1nB84HU we are told that on 25 January 201,345 oz of Registered gold was shifted by its owners request into Eligible, reducing Registered gold stocks from 275k to 74k oz.
That makes the "coverage ratio" -- total gold claims divided by available stocks -- shoot up. 40 million oz of gold open interest is "backed" by a record low 74,000 oz of Registered gold, 542 oz paper claims to every physical oz.
Sorry, but it ain't a problem till it's a problem. The vast majority of futures contracts are settled by buying the opposing paper contract, not taking physical delivery. That's what a futures market is for, hedging. Transitory changes like this may OR MAY NOT signify a physical shortage. If a shortage exists, futures will speedily show it in a "backwardation" -- the price of gold for immediate delivery (spot month) will rise above the normally higher priced future contracts. Preliminary last prices on Comex today show a very slight backwardation not with the spot months but from April at $1,113.50 to June at $1,112.9. August is trading normally at $1,120.60.
So y'all don't panic just yet. Wait till Wednesday.
I am taking a two day vacation with my surgery-recovering wife, Susan, to friends in deepest North Tennessee. Hence I won't be sending a commentary tomorrow. However, the scoreboard today pretty well tells the tale. Stocks, although they've traded much higher with triple digit days, couldn't keep any of those gains (sorry, Nice Government Men, y'all tried) as their bull transmogrifies into bear. US dollar index is weak and watered as Bourbon Street whiskey, about to fall, while silver and gold prices, accompanied by platinum and palladium prices, are working up through resistance.
Stocks added 130.73, 0.82%, to 16,075.19, same place they've stopped before trying to catch a ride higher -- and failed. S&P gained 13.32 (0.71%) to 1,896.27. Stocks are staging the most lethargic rally possible. Yes, they will probably move a little higher, maybe to 16,600 and 1,950. Their day has passed. Y'all need to sell off stocks before you get caught in the generalized slaughter.
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But, thunderation! Don't pay me no mind, I'm no more'n a nat'ral born durned fool from Tennessee no way. Y'all keep on lissenin' to them Wall Street smarties. They'll keep talking to you, long as you got money left.
US dollar got hold of some bad, bad chili and is sick as the proverbial dog. Slid more today than yesterday, and plunged beneath the 20 and 50 day moving averages (98.99 and 98.88). Down 33 basis points (0.33%) to 98.62. Has fallen out of that rising wedge. No prophet needed to see 'twill fall further. Look for yourself:
Euro -- brace yourself -- has actually broken out upward. Rose 0.44% to $1.0940, if it can keep it up. Yen fell 0.12% to 84.17.
Y'all enjoy your weekend.
Aurum et argentum comparenda sunt -- -- Gold and silver must be bought.
- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
© 2016, 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.
