|Gold Price, $/oz||1,248.20||4.40||0.35%|
|Silver Price, $/oz||15.88||0.04||0.23%|
|Dow in GOLD $s||291.19||-1.72||-0.59%|
|Dow in GOLD oz||14.09||-0.08||-0.59%|
|Dow in SILVER oz||1,107.42||-5.12||-0.46%|
|US Dollar Index||95.64||0.34||0.36%|
About that jump-let in gold and silver prices today: If a market needs terrorist attacks to prop it up, it may have problems.
Then again, it might be something else. The pattern gold has traced out might also be a continuation pattern, and not a top. If 'tis, then gold is gathering up its strength for a jump.
Terrorist attacks are not positive for stock markets. For Europe an attack on Brussels resembles an attack on Washington or New York. European Nice Government Men must have been working overtime, because instead of diving European stock indices actually nosed up.
Any sober adult would perceive that Europe has sunk into deep peril & mortal danger, but no sober adults are to be found among their politicians. Grievously sorrowful! Cicero said, "A nation can survive its fools, even the ambitious, but it cannot survive treason from within."
In the US stocks nudged down a hair. Dow lost 41.3 (0.23%) to 17,582.57 & S&P500 shaved off 1.8 (0.9%) to 2,049.80. Only significance I attach to this is that both indices have managed to climb over their 200 day moving averages. To my nat'ral born durn Tennessee fool mind, that brings them just that much closer to a break.
Should come as no surprise that the US dollar index rose on the bad news, up 34 basis points (0.36%) but that was, as they say, a "muted" response. Flight to quality did take the dollar index up through 95.30 resistance, but looked none too perky. Ended at 95.64.
Nice Government Men in Europe must have been busier than a one-armed man changing a diaper. They had to keep stocks from crashing AND the euro. In the end I reckon they did a heroic job, as the euro dropped only 0.2% to $1.1217. If you call manipulating markets "heroic".
Yen fell 0.3% to 89.06. Not clear yet whether it has a mind to rise or fall.
Although it hit an intraday high of $1,260, Comex gold rose only $4.40 (0.35%) to $1,248.20. After a 1604¢ high, silver settled Comex at 1587.7¢, up only 3.6¢ (0.23%).
On the End of Day chart the gold/silver ratio has nearly bumped into the lower channel boundary. No cosmic law decrees it cannot fall further, but odds are it will bounce up from that line.
Mathematically it can happen several ways, but a reversing gold/silver ratio means lower silver prices at least, and most likely lower gold.
Let me try to make clearer the stakes here. Right around 1600¢ the downtrend line from the April 2011 high crosses silver's path. If silver breaks through that now, it will draw buyers like free sandwiches draw hobos. And it will jump hugely. That's why I keep telling y'all, all bets for a correction are off if silver can close above 1624¢.
Silver & gold can't stay mired in this range forever. Every day they do increases the pressure to move up or down, but to MOVE. Today the gold price closed once again above its 20 day moving averages, after closing below it yesterday.
If gold and silver prices can press through those blocking levels -- 1600¢ and $1,280 -- they will run like scalded dogs. However, the odds still favour a correction.
- Franklin Sanders, The Moneychanger
© 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. 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.