Wednesday, May 25, 2016

Gold Price Tumbled $5.10 (0.4%) to $1,223.80 and Made a New Low for the Move Today

25-May-16PriceChange% Change
Gold Price, $/oz1,223.80-5.10-0.42%
Silver Price, $/oz16.260.020.10%
Gold/Silver Ratio75.288-0.393-0.52%
Silver/Gold Ratio0.01330.00010.52%
S&P 5002,090.5414.480.70%
Dow in GOLD $s301.543.701.24%
Dow in GOLD oz14.590.181.24%
Dow in SILVER oz1,098.227.810.72%
US Dollar Index95.34-0.24-0.25%

Sorry I missed y'all yesterday, but I was finishing my monthly paid subscription newsletter. 
I wonder if some of you U.K. readers would let me know briefly your assessment of the UK's likelihood of voting to leave the European Union? 

Stocks advanced again today after a yet stronger day today. Dow rose 145.46 today, 212.13 yesterday, and ended today at 17,851.51. S&P500 rose from 2,048.04 on Monday to 2,090.54 today. 
What's driving it? Beats me. Markets sometimes feed on themselves, & that is more true in these days of computer driven trading. 

I picked up an interesting fact off MarketWatch today. Last year's high occurred on 19 May, & the stock market has been lower ever since. There's only been one bull market since 1900 that corrected longer than one year. One more week and the 19 May 2015 high to present correction will be longer than that other long correction. Average length of hose corrections was 155 calendar days, the longest 379 days. As of today, this correction has lasted 372 days. 

Those 2015 highs were 18,312.39 on 19 May 2015 and for the S&P500 2,130.82 on 21 May 2015. 
US dollar index continues its sleepy correction. Today it lost 24 basis points (0.25%) to 95.34, dancing over 95.50 support. It climbs a bit, might have one good day, then stalls, stops, falls back. I'm beginning to wonder if it can pierce the 200 DMA at 96.64. 

Probably I alone among Westerners who can read & write do not believe the Fed will raise interest rates. First, I think they are too chicken-livered to do it, because they are afraid it will pull the flush chain on stocks. Second, as gutless academics they have pushed their envelope out where no envelope has ever gone before, so they have no idea what other mayhem an interest rate rise might catalyze. So like true bureaucrats, when scared they freeze. 

Gold price tumbled $5.10 (0.4%) to $1,223.80. Silver added 1.7¢ to 1625.5¢. Both made new lows for the move today. 

Silver crossed below it 50 DMA (1640¢) yesterday, & struck bottom at 1618¢ today. Here's the chart, 

Likely targets include 1600¢ and 1550¢. Right now silver doth not appear eager to hit that lower target. 

Here's gold, 

Yesterday gold fell out of that uptrending range that has carried it since February (It had closed below the 50 DMA on Monday). Today's low came at $1,217.20. A stretch to $1,206 would correct 38.2% of gold's rise from December. Seems reasonable. 

Yesterday was my birthday. I turned 105. Look remarkably well-preserved for my age. 

I nearly choked chuckling at an NPR story not long ago about some Italian village with a large number of folks over 100. The experts went and examined what they eat and drank, etc. Turns out they eat lots of fats, drink wine every day (but not with breakfast), eat lots of rosemary, and smoke, smoke, smoke those cigarettes. The NPR-ites were fit to be tied. Reality refused to be shoehorned into their ideology. 

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.