• Exercise Patience Friends, 2016 is the Year We've Been Waiting On

    31-Dec-15 8-Jan-16 Change % Change
    Gold Price, $/oz. 1,060.30 1,102.00 41.70 3.9
    Silver Price, $/oz. 13.775 13.908 0.133 1.0
    Gold/Silver Ratio 76.973 79.235 2.262 2.9
    Silver/gold ratio 0.0130 0.0126 -0.0004 -2.9
    Dow in Gold $ (DIG$) 339.72 306.63 -33.09 -9.7
    Dow in gold ounces 16.43 14.83 -1.60 -9.7
    Dow in Silver ounces 1,264.97 1,175.33 -89.65 -7.1
    Dow Industrials 17,425.03 16,346.45 -1,078.58 -6.2
    S&P500 2,043.94 1,922.03 -121.91 -6.0
    US dollar index 98.70 98.60 -0.10 -0.1
    Platinum Price 891.70 877.10 -14.60 -1.6
    Palladium Price 560.80 493.60 -67.20 -12.0

    3 Day Gold Price Chart
    30 Day Gold Price Chart
    5 Year Gold Price Chart
    3 Day Silver Price Chart
    30 Day Silver Price Chart
    5 Year Silver Price Chart

    The GOLD PRICE peeled off $9.90 (0.9%) to $1,102.00 on Comex. SILVER PRICE was attacked by a pack of wild dogs and hyenas, losing 42.7¢ (2.9%) to $13.908

    Catastrophe? Disaster? Irremediable failure? Nawww, just profit-takers at the end of the week getting out of profitable gold positions. The GOLD PRICE fell as low as $1,091.80, but closed over $10 higher, neatly defending the level where it broke out. Nothing ever rises straight up (until a parabolic rise at the end of the market, when everybody wants to buy), so today is no surprise. And in spite of a sharply higher lying US jobs report, stocks couldn’t rise and the price of gold wasn’t broken, and the Fed’s sucking air like a leaky bilge pump.

    Silver’s miserable day sent the GOLD/SILVER RATIO to a new high at 79.235. That’s the most depressing piece of news the day brought, but ’tain’t by any means fatal. With stocks tanking, the gold price can rise while stocks pull silver down. It does, after all, tend to follow stocks. However, as stocks swirled around the drain in spring 2009 after the 2008 panic, the ratio dropped steadily as both silver and gold prices rose, rose, rose.

    Ideal next week would be gold conquering $1,125 and running to $1,150. A close below $1,091 would doom gold to months more humiliation and base building. Still looking for silver to rise above $14.40 to confirm a precious metals rally.

    Exercise patience, friends. 2016 is the year we’ve been waiting on.

    The brutal scoreboard never lies, never flatters. Dow Industrials dove a massive 1,078.58 (6.2%) and the S&P500 plummeted 121.91 (6.0%). US dollar index was up and down, but ended only ten basis points lower. Silver and gold made ground, but gave some of it back today. White metals were playing Whack-A-Mole with a pile-driver, and got pile-driven. Get braced for a year that looks like this, with silver and gold advancing while stocks crumble — mostly gradually, but with bursts of activity like this week. Dollar remains confused.

    US dollar index yesterday lost 98 basis points (0.99%), a huge move, and ended at 98.32. Today its range regained most of that territory, but at the close its fingers slipped and it closed only 33 basis points (0.33%) higher. Not inspiring trading, but confusing. Earlier in the week the dollar index appeared to break out toward 100.70 and the top of the range. That could signal a big dollar rally, driven by world wide fear and decomposing stock markets. However, the dollar keeps taking one day, and giving back the other. Lots of indecision and hesitation for a market determined to rise. Jury’s still out on dollar’s longer term intentions.

    Stocks had their most wretched first week of the year ever. Both the Dow Industrials and S&P500 have stepped through the manhole at the lip of that upside-down bowl — same manhole that in August took the Dow to 15,370 and S&P to 1,867.

    Dow in Gold

    Concatenate, beloved! Atop that August fall out of an upside down bowl, pile a very old 6-1/2 year bull market, stock market and economic weakness around the globe, internal market weaknesses of all sorts, puking-sick small cap stocks, failure on the rally from the August lows to pierce the bowl’s bottom, and now another plunge through the bowl’s lip. The links add up to a chain falling out of the cargo plane’s open bay door. You have three or four years of this in front of you. Meanwhile volatility will increase, and the Nice Government Men of the Plunge Protection Team will jump in to try to slow the inevitable, but the problem with the inevitable is, well, it’s inevitable.

    Dow in Silver

    Today stocks plunged and bucked but fell steadily throughout the day. Dow Industrials lost 167.65 (1.02%) to 16,346.45. S&P500 peeled off 21.06 (1.08%) to 1,922.03, and they have NOT reached any stopping point.

    Did anybody ever tell y’all that markets drop much faster than they rise? Well, they do. Lots.

    Dow in gold is over half an ounce below its 200 DMA, about all the confirmation you needed that the action from November through December really was a double top with July. DiG today closed 14.81 oz, far below its 15.38 oz 200 DMA, not to mention the 16.853 November high.

    Japanese Yen

    Dow in silver ended at 1,173.89 oz, near its 200 DMA at 1,154.43 oz. Hath also rolled over.


    Try to bear in mind why I watch these so closely: they tell us which investments will outperform, gold and silver or stocks. Once their trend is set, we ride it for a long, long time. Investing aims to do one thing: preserve and increase purchasing power. These two indicators show us how.

    Yen is on a tear, up another 0.31% today to 85.29, and way overbought on the RSI. Take a gander on the right.

    Euro lost 0.06% to $1.0925, can’t break out of that triangle.

    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. 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.

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