Wednesday, May 18, 2016

Gold Price Closed down at $1273.70 down $2.50 or -0.20%

18-May-16PriceChange% Change
Gold Price, $/oz1,273.70-2.50-0.20%
Silver Price, $/oz17.12-0.12-0.67%
Gold/Silver Ratio74.3980.3510.47%
Silver/Gold Ratio0.0134-0.0001-0.47%
S&P 5002,047.630.430.02%
Dow in GOLD $s284.450.500.18%
Dow in GOLD oz13.760.020.18%
Dow in SILVER oz1,023.756.640.65%
US Dollar Index95.180.640.68%

Don't y'all think the most appalling thing about the yankee government & Federal Reserve is their merciless tiresomenesst? Their tedious predictability? The programmed fear & instability? They need a new choreographer.

So with utter predictability the Fed's Federal Obtuse Moron Committee today HINTED they might just raise rates in June after all -- no promises, mind you, but hints that those who read the Fed's sheep livers can plainly see. I say this was "predictable" because they needed to boost the dollar, which had stalled, and more, they need to keep markets off balance, constantly sawing from one expectation to the other so nobody will know what they plan. Maybe they have some reason for this (I doubt it's valid) but the net outcome is to prevent millions of folks from planning & ordering their lives, and to plant instability & uncertainty like Kudzu. 

It remains "a tale told by an idiot, full of sound and fury, signifying nothing." 

Let's look at the outcome. First, the Fed & its staff of imposters & poseurs had better not speak too loudly about raising interest rates, lest the stock market hear, fear, and die. The heroic efforts of the Nice Government Men managed to bring the Dow back from a 17,418.21 low where the FOMC announcement blew it, up to nearly unchanged at 17,526.62, 3.36 (0.2%) lower than yesterday. The NGM managed to bring the S&P500 into positive territory at 2,047.63, although a 0.42 rise (0.02%) isn't likely to win a home in any record books. 

Lo! 'Twas no more'n a bounce off the Head & Shoulders neckline for the S&P, & a further drop beneath the neckline for the Dow. No cause for jubilatin' there, Wall Street, so stow away your dancing Guccis. Stock indices will next imitate a large anvil floating in deep water. Higher rates will tie chains on the anvil. 

Of course, it's purely subjective, but I wasn't particularly moved to awe by the Dollar Index' move today. A 64 basis point (0.68%) move to 95.18 broke no records. While it did punch through the hitherto impunchable 50 day moving average, it stopped cold at the upper downtrend boundary stretching back to 1 February. Look, The red lines mark the downtrend from February. Within that downtrend the green lines show another, interior trading range. Last four days' action merely carried the dollar index to that upper boundary. No rally can happen without the dollar index penetrating that line. Maybe it will tomorrow, but for now my sneer remains intact. 

Today offered another lesson in why nobody should trade currencies. The FOMC's announcement panicked the euro and yen markets. Euro fell a meaty 0.83% to $1.1210 while the yen tumbled massively, down 1.02% to 90.70. 

And here's a reason it's dangerous to trade US treasuries, too. FOMC mumbles today wounded bond prices and sent yields soaring. 10 year treasury yield rose 6.88% to 1.21%. Who knew? That's why I don't want to play on any government playground, currencies or bonds, cause everything they touch turns to -- mud. 

Oil (WTIC) is pushing against the upper border of a long-lived rising wedge. Closed today at $48.78, but if it doesn't break through $50 soon, it will nosedive, too. 

On Comex gold lost a mere $2.50 (0.2%), closing at $1,273.70. Silver lost 11.5¢ (0.67%) to 1712¢. 
But remember that the Comex closes at 1:30 Eastern while the FOMC bloviates at 2:00 Eastern, so those closes came before the announcement. After the dust settled & the dancing stopped, gold stood at $1,257.20, down $19 (1.5%) from yesterday's Comex close. Silver lost 37.5¢ from yesterday's comes, or 2.2%. 

Behold, the gold chart, 

Remember that even-sided triangle on the gold chart I mentioned yesterday? Well, today gold broke down out of that. And it punched into the nearby ascending fan line from the January low, if not quite through the 50 DMA ($1,252.16). That suggests that gold will drop further tomorrow. If it doesn't, that refusal would show great strength.

Silver's case differs. Look here, 
This end of day chart shows today's silver low at 1692, but it hit 1686. That is the very bottom of the falling right triangle, and the limit of support. Belwo nothing will catch silver before 1631¢ (50 DMA). Falling right triangles usually but not always resolve by breaking downward. To resist breaking, silver must stay above 1685¢. 

My mind's not really here today because my youngest son (of five), Zachariah, is at the hospital with his wife Victoria laboring with their first baby. She has been travailing since yesterday morning, and shortly must have a C-section if the baby won't come. She is indescribably brave & has given every effort to prevent this. Please pray for Victoria and her baby in labor, and for Zachariah.

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.