|Gold Price, $/oz||1,249.20||7.00||0.56%|
|Silver Price, $/oz||17.29||0.18||1.05%|
|Dow in GOLD $s||298.55||-0.83||-0.28%|
|Dow in GOLD oz||14.44||-0.04||-0.28%|
|Dow in SILVER oz||1,043.71||-7.99||-0.76%|
|US Dollar Index||94.46||-0.08||-0.08%|
Forgive me, I left something out of my recommendation of the movie, "The Big Short." Watch out. It's filled with bad language & some nudity. Not for anybody but adults, absolutely no children. I recommend it not for you to adopt the speech or lifestyle depicted. but for the portrayal of pure blinded greed, as well as an unrelenting resolve on the other side to pursue truth, and even integrity. "The Big Short" is a warning picture of where unrestrained greed ends. Also, one reader tells me it is available for free on YouTube.
Janet the Toad opened her mouth wide today, but nothing came out save flies & lies. More croaking about somewhere, someday raising interest rates, a little piping about the economy "moderating," and wheezing lies about how well the economy is faring. None of this act moved markets. Stock indices barely rose, and several just sank further. US dollar index fell, deprived of any interest rate transfusion. Gold stumbled, picked itself up, and stood back straight. At day's end the FOMC announcement was, "A tale told by an idiot, full of sound and fury, signifying nothing."
Dow Jones Industrial average rose 51.23 (0.28%) to 18,041.55 & the S&P500 gained 3.45 (0.16%) for a close at 2,095.15. Meanwhile the Nasdaq and Nasdaq-100 dropped (0.51% and 0.82%). Stocks are floating on borrowed time. Watch out below!
10 year treasury note yield fell, which makes sense. If the Fed doesn't intend to raise rates, bond prices must rise and the yield, which had floated higher in hope, must now decline.
Fed's refusal to raise rates also made the US dollar less attractive, knocking down the US dollar index. It fell 8 basis points (0.09%) to 94.46 barely below the 94.51 twenty day moving average, but below nonetheless. It is now bouncing in a range bounded by 95.20 and 93.85. It's stuck. Got to beat those numbers up or down to break the paralysis.
Euro rose 0.12% to $1.1312, reacting to the dollar's little loss. Yen has more troubles. Fell 0.15% to 89.67 today, and is about to step through its 50 DMA (88.50) into the wild blue yonder below.
Silver closed Comex 18¢ (1%) higher at 1728.6¢. Gold added $7.00 (0.6%) to $1,249.20.
Gold did close above resistance/support at $1,245, but didn't run away. High came at $1,252.80, low at $1,240.70. Some see-sawing occurred around the time Janet the Toad croaked, but gold quickly recovered. Don't get the wrong idea: "recovered" doesn't imply any particular enthusiasm or strength. MACD & Stochastics are negative, RSI barely breathing. If it plans to move higher immediately, it's keeping it a secret.
Frankly I am at a loss to explain silver's strength. The RSI is extremely overbought and all other indicators are stretched like a rubber band around the Sunday New York Times. It is ripe for a correction, & a substantial one ought to arrive before next week ends.
Add to that the Gold/Silver Ratio, not painfully oversold, with what looks like a breakaway gap beginning the fall and an exhaustion gap more than a week ago.. The ratio, too, looks ready to correct
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.