• Gold Price Bucked Off the Shackles Today and Jumped $11.50 (1.03%) to $1,127.90

    1-Feb-16 Price Change % Change
    Gold Price, $/oz 1,127.90 11.50 1.03%
    Silver Price, $/oz 14.33 0.10 0.70%
    Gold/Silver Ratio 78.71 0.26 0.33%
    Silver/Gold Ratio 0.0127 -0.0000 -0.30%
    Platinum Price 868.80 2.90 0.33%
    Palladium Price 501.60 10.60 2.16%
    S&P 500 1,939.38 -0.85 -0.04%
    Dow 16,449.18 -17.12 -0.10%
    Dow in GOLD $s 301.48 -3.64 -1.19%
    Dow in GOLD oz 14.58 -0.18 -1.19%
    Dow in SILVER oz 1,147.96 -10.33 -0.89%
    US Dollar Index 98.96 -0.67 -0.67%

    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 bucked off the shackles today and jumped $11.50 (1.03%) to $1,127.90. Y’all pay close attention here: $1,128 is not only resistance from the last six months, it is also where lieth the downtrend line from the October 2012 high, and about where gold’s 200 DMA is trading ($1,132.50). On the weekly chart, the GOLD PRICE also breaks out upside through the downtrend from October 2012 and the 50 week MA stands nearby at $1,141.50.

    So clearing $1,128 will throw the price of gold over a huge hurdle.

    SILVER, silver, silver. High today was $14.42, Comex close came at $11.429, up 10.70¢ (0.7%).

    Silver, too, is set to pop, BUT must first clear $14.65, the last two highs and the post-2012 downtrend line on the weekly chart. The monthly chart needs to see $15.30 plus for a skyward breakout.

    Clearly Friday marked the end and low of silver and gold prices little corrections, PROVIDED they march out smartly again tomorrow. Better start buying.

    Today offers an example of what I try to tell people about governments manipulating markets. If they’re all manipulated, they complain, why even try to figure out where they’re headed?

    Because the manipulation never works for long. They can only manipulate at the margin, and that doesn’t last.

    Case in point: on Friday (always before a weekend) the Bank of Japan threw a surprise party by announcing a 0.1% interest rate reduction, taking Japanese interest rates into negative territory. Yes, that means the central bank will CHARGE banks to hold balances.

    We need not delve into the moronic Keynesianism behind this move, we need only observe that stocks jumped worldwide. The dollar, facing a huge interest rate advantage over the yen, leapt a massive 102 basis points while the yen (I warned y’all the Japanese Nice Government Men would have to do something about that rally) gapped down 160 basis points or 1.35%. Stocks were jumping over the prospect of more central bank money creation, implied in the BoJ move.

    Leave aside the presupposition that the BoJ always works in concert with the Fed, which would make the timing at January’s end perfect, raising stocks’ performance at months’ end. Can’t prove that, only suspect.

    Several decisive and far reaching events appeared:

    1. In the face of a madly rising dollar and buying panic in stocks, silver and gold never wavered but held firm. Magnificent showing, stout and brave.

    Note and miss not that NEGATIVE interest rates means that the old argument against silver and gold — they pay no interest — no longer holds. Negative interest rates mean that you have to PAY to hold cash or government bonds, while holding silver or gold costs nothing. Think long and hard on that. Long and hard.

    2. Today the US dollar index sank 0.67% to 98.98, leaving behind another failed attempt to get through 100.04. It also closed BELOW the 50 DMA (98.87). More, it has on Wednesday and Thursday broken down from a rising wedge, but on Friday jumped up into the wedge’s middle. Today it gave up all that and fell out again. All this stinks of blubbering weakness, but that needs confirming by a dollar index close below 98.45, and then 97.20.

    3. Stocks’ hop up merely cannibalized or advanced in time the peak of the reaction rally. Dow reached a high at 16,466 and S&P500 1,940, both near my rally targets of 16,600 and 1,950. Yes, stocks can still move a little higher, to 17,000 and 2,000, but the BoJ’s gamble did no more than drive them a little faster than otherwise. Wait and see.

    TODAY the Dow backed off 17.12 (0.1%) to 16,449.18. S&P500 crawfished 0.86 (0.4%) to 1,939.38.

    Dow in silver today closed 1,146.84 oz, down 0.72%. Friday took it slightly through its 1,149.74 oz 200 DMA, but today it fell beneath again. Beautiful, and argues the DiS rally may have ended. Watch it.

    Dow in gold turned down, still below both the 200 (15.36 oz) and 20 (14.83 oz) day moving averages at 14.58 oz. Close below 14.17 oz renews downtrend.

    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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