Wednesday, March 16, 2016

Silver and Gold Prices Both Shot Straight Up

World's largest re-insurer Munich Re announced today in Munich that it is boosting its gold and cash reserves rather than suffer punishing negative interest rates from the European Central bank. It is trying to counteract the near zero or negative interest rates that reduce income needed to pay out claims.  Munich Re has already held gold for some time and lately added cash in the "two-digit million euros."  Whoa.  Think about that, this gigantic organization holding cash currency.   And gold.

Harbinger of things to come?  Whoops.  Central banks' traps aren't working
too well, are they?


The Tennessee proverb says, "He who lives by his big mouth, dies by his big mouth."
From July 2014 forward the Fed has floated the US dollar on a rising cloud
of gassy hot air:  bluster, jawboning, threatening, yakking.  Then the mountain
gave birth to -- a mouse.  A 1/4 point interest rate rise last December that
nearabout wrecked world stock markets.

That's the thing about threatening:  don't work long term.  Ever notice
that those parents who keep on saying, "Now, Bobby, don't do that or I'm
going to have to give you a whippin'" and keep on saying without ever
acting have the children from hell?  Little Bobby knows they're bluffing.
Now the world knows that Janet Yellen & her miscreant academic trolls
have been bluffing all the time.  Now the dollar will die by their big mouth.
Today the US dollar lost 74 basis points to end at 95.93, down 0.77%.
Great job, Janet.
US dollar chart makes me grimace in pain just to look at it.
Look at those three huge perpendicular slides (blue arrows).  Those depict
days where buyers withdraw their bid and sellers panic through the exit.
Behold, now the dollar has come to critical 92.50 support,  Nice Government Men
must be sweating bullets and spitting iron filings.  Of course, this doesn’t hurt
gold and silver at all.
Currency traders must be puking in wastebaskets all over the globe, just
before they run out a window or look for a new line of work.  Euro rose 1.14% to $1.1235
& Yen jumped 0.6% to 88.90.  Central banks sure do stabilize markets, don't they?
The Fed left interest rates untouched and said it should raise rates 0.5%
by the end of the year -- in other words, more of the someday, sometime, we threaten.
Who knows what and why stock investors are thinking?  Evidently, for the moment,
until tomorrow morning's open, they took that as positive.  Dow climbed to 17,325.76, up 74.23 (0.43%), its highest close this year.  S&P500 rose 11.39 (0.56%) to 2,027.22.  This is about as
good as it gets, so 'twould be a fine time for a correction to begin.
Dow in Gold rose yesterday nearly to the 50 day moving average, then
fell back today.  Ended at 13.72 oz (G$283.87 gold dollars).  Also looks like
a good time to change direction and resume the downtrend.
Relatively weaker than gold, silver let the Dow in Silver nearly reach the
200 DMA on 1 March, but sank and today sank back through the 50 DMA.
Stocks would have to stage a manic rally to take the Dow in Silver much higher,
or silver would have to sink mightily.
Comex closes before the FOMC announcements, so a deathly hush still
reigned when they closed at 1:30 p.m.  Gold lost $1.10 to $1,229.30 & silver
gave back 4.1¢ to 1521.4¢.
Then Old Yellen spouted off at 2:00 sharp.
US dollar began to sink immediately, like a cast iron canoe full of lead washers.
Silver & gold both shot straight up.  Gold rose to $31.30 (2.5%) above yesterday's
close and silver rose to 34¢ (2.6%) over yesterday at 1564.5¢.
In the same way I wasn't too hot to proclaim a gold rally after the ECB
slammed the dollar last week, so this week when the Fed slams
the dollar I am not burning to announce another rally.
That doesn't make me right, but it does keep me from making too many
mistakes on a day when central banks, a force external to markets, stir up turmoil.
If gold had closed above the last high, I would think differently, but for now
I'll wait and see.  Danger of a correction has not vanished, & indicators
point down.
Silver could easily visit its 200 DMA, not at 1494¢.  Gold might drop as
far as its 50 DMA, now $1,177.14.
I would abandon this correction notion and do an about face on a dime
if gold closed above $1,287.80 and silver closed higher than 1624¢.  If I saw
that I'd be buying with both hands and my toes.
I have to drive over to Chattanooga tomorrow, and probably won't get
home in time to send y'all a commentary.  God willing, I'll send one on Friday.
Tennessee is crazy:  it charges sales tax on constitutional gold & silver money.
I know, I've been through the wringer fighting it.  After four years trying,
a bill to remove the tax has finally gotten out of subcommittee to the
Senate Finance, Ways & Means Committee.  If you live in Tennessee, do yourself
a favor and contact the members of the Senate Finance Committee, listed here
Time's a-wastin'!  Bill will be heard next week.  Email ONLY ONE MEMBER AT
A TIME (otherwise emails are automatically deleted as spam), but you can use the
same message.  You can also call their offices.  Here's the bill,
Here are talking points:

     1.  The bill really won't cost the state anything because investors now just
buy out of state and avoid the tax.  Removing the tax would steer that business
to Tennessee seller.
     2.  32 other states have already removed the sales tax on silver & gold.
Tennessee needs to stay competitive.
     3.  (optional) The tax is unconstitutionally applied to silver & gold money in any event.


Aurum et argentum comparenda sunt -- -- Gold and silver must be bought.

- 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.