|Gold Price, $/oz||1,209.80||-2.10||-0.17%|
|Silver Price, $/oz||16.01||0.10||0.62%|
|Dow in GOLD $s||304.81||1.36||0.45%|
|Dow in GOLD oz||14.75||0.07||0.45%|
|Dow in SILVER oz||1,114.56||-3.86||-0.35%|
|US Dollar Index||95.54||0.08||0.08%|
Well, Mercy! I told y'all about Douglas Kaine McKelvey's "100-year Vision" article yesterday & urged y'all to read it, then neglected to give you a URL. Here it is, http://bit.ly/1Zgt57x Delightful to read & ponder.
I've tortured & killed a lot of electrons writing and thinking about silver & gold, so it's time to throw it all up in the air & see if we can't find a new angle.
First, the closes. Metals refused to fall off a cliff today. Gold lost $2.10 (0.2%) to $1,209.80, but that was about the low. Silver gained 9.9¢ (0.6%) to 1600.5¢.
Here's a revised, stripped down gold chart, http://schrts.co/zi8k5q
WHAT IF gold is trading in a range, bounded by those pink lines? What if the bottom of that range is about $1,200? If gold really is strong, indeed, has entered a new bull phase, then it wouldn't weaken off to fall all the way to the 200 DMA (now $1,165).
And why is volume drying up as gold refuses to inch lower? Why is downward momentum slowing? Okay, maybe gold needs one good spike down still, but then again, maybe not. Maybe we've become so used to gold weakness since 2011 that we don't expect gold strength now -- and markets love to surprise.
Does silver agree? Chart's here, http://schrts.co/txiQM8
WHAT IF the ruling pattern in silver is that rising range bounded by the green lines, defined by the uptrend from the January low? Silver today is only pennies off that line, which coincides with another support line from last year. Volume is drying up, not increasing. Momentum is slowing -- barely, but slowing. Rate of change is flattening.
This alternative interpretation is easily tested. If silver closes below 1590¢ or gold below $1,200, it's hogwash. On the other hand, if they bounce along this support & then begin rising, maybe 'tain't hogwash after all.
Consistent with a "metals won't drop much from here" outlook, the gold/silver ratio has stalled in a touchback to the lower boundary line it punched down through in April. That boundary line is also running roughly parallel to the 200 DMA. A rising ratio goes with metals falling, a falling ratio with metals rising.
US dollar index remains dazed, confused, & bumfuzzled. Rose 8 lousy basis points to 95.54. Is it rolling over earthward, or consolidating sideways? Pretty mealy-mouthed for a big, strong world class currency, I'd say.
On Wednesday Japan's PM Shinzo Abe announced he would delay imposing the sales tax. Some interpret that as a sign the central bank won't keep flooding the world with more yen. For whatever reason or none, the Yen rose today to 91.86 (0.61%). Euro lost 0.35$ to $1.1151.
Yea, & what of stocks? They rose modestly, in about as great a hurry as a Washington state driver in the left lane. Dow added 48.89 (0.27%) to 17,838.50. S&P500 edged up 5.93 to 2,105.26, up 0.28%.
How do you spell u-n-r-e-p-e-n-t-a-n-t? That is I, looking at stock chart indices. Still see a head and shoulders top appearing. Here's the Dow, http://schrts.co/Q6KUW0 and the S&P500, http://schrts.co/vtdPMb
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.