• The Gold Price Climbed Over Two Crucial Resistance Levels this Week Closing at $1,238.30

    10-Oct-14 17-Oct-14 Change % Change
    Gold Price, $/oz. 1,221.00 1,238.30 17.30 1.4
    Silver Price, $/oz. 17.252 17.282 0.03 0.2
    Gold/Silver Ratio 70.774 71.653 0.878 1.2
    Silver/gold ratio 0.0141 0.0140 -0.0002 -1.2
    Dow in Gold $ (DIG$) 280.10 273.45 -6.65 -2.4
    Dow in gold ounces 13.55 13.23 -0.32 -2.4
    Dow in Silver ounces 958.97 947.83 -11.14 -1.2
    Dow Industrials 16,544.10 16,380.41 -163.69 -1.0
    S&P500 1,906.13 1,886.76 -19.37 -1.0
    US dollar index 86.06 85.29 -0.77 -0.9
    Platinum Price 1,261.10 1,262.00 0.90 0.1
    Palladium Price 784.20 755.85 -28.35 -3.6

    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

    This week the GOLD PRICE climbed over two crucial resistance levels, Silver was flat, and the platinum metals posted a sorry week.

    Today Silver lost 10.6 cents today to $17.282 and the gold price closed Comex down $2.20 at $1,238.30.

    The SILVER PRICE has formed what looks like/resembles an upside down head and shoulders reversal pattern with a neckline at $18.00. Silver has walked through its downtrend line and through its 20 DMA, but that’s not enough. Speed will really pick up when silver cuts through $18.00. Real test comes at last breakdown point, namely, $18.60. Here’s a picture on the right
    The GOLD PRICE has painted a kind of V bottom, and conquered resistance at $1,225 and $1,237. So far, so good. All indicators still point toward outer space, but the gold price must pierce $1,260 and then $1,296. Chart on the left:

    Both silver and gold prices have five day charts that show “ceilings” at $17.60 and $1,245. Once through those ceilings, they’ll run. If the Fed gets busy jawboning stocks up next week, that might put a little headwind against gold, but the charts still persuade me that silver and gold prices ended their three year correction with the bottoms on 3 October 2014.

    I have been buying silver and gold since then, and will buy more as it rises through every resistance level.

    Not a great week for stocks, but “a friend” or investors came in buying today to undo a modicum of the damage. US dollar index took a big hit.

    To back up my claim that as soon as the stock market scares them, the Fed will begin again puking out new Quantitative Easing like a 14 year old beer drinker, I point to statements yesterday by the head of the St. Louis Federal Reserve, one James Bullard. In comments on Bloomberg TV he said that he thinks “a reasonable response by the Fed in this situation would be to . . . Pause on the taper at this juncture, and wait until we see how the data shakes out in December.”

    Two days earlier San Francisco Fed President John Williams told Reuters, “If we get a sustained, disinflationary forecast . . Thing I think moving back to additional asset purchases in a situation like that should be something we seriously consider.”

    Pray, y’all, don’t be naïve. These apparatchiki NEVER make public statements like this unless told to. This is the famous “jawboning” where they try to TALK markets up or down. Bullard’s statement came one day after the S&P500 hit 1820.66, down 10% from the September 2,019.26 high. Were you a fly on the wall in Fed-ville, you would have heard a conversation in which Mother Janet or the others said, “We’ll let it fall 10%, then we’ll start jawboning.”

    Alas, poor central banking criminals! The flood of a turning market waxeth so strong, its waves rise so high, that it overflows and washes away whatever feckless dikes they build. They might slow the flood slightly, but they cannot stop its covering the market.

    Lesson? Whatever their jawboning tries to convince you to do, DO THE OPPOSITE.

    Today the Dow rose 263.17 or 1.63% to 16,380.41 while the S&P500 chugged right alongside, adding 24 points (1.29%) to 1,8876.76.

    Y’all know that the media throw around big numbers — like today’s stock gains — to impress your little hick minds, ’cause you ain’t from NewYawkSiddy so you’ll believe anything. But they ain’t used to dealin’ with no nat’ral born durned fool from Tennessee, who don’t even believe a quarter unless he bites it. So I went and looked at them Dow and S&P500 charts, and LO! And behold! Gains yesterday and today left both the Dow and the S&P500 BELOW (as in, “underneath”) their 200 day moving averages. So the patient’s temperature has really come down, but it’s still 108 degrees.

    I’ve checked most stock indices in the US and abroad, and all are below their 200 DMAs and below their last lows. This is a confirmed downtrend, globally.

    Dow in Gold jigged up today, but changeth not the trend. Closed at G$273.49 gold dollars (13.23 oz), having crashed from its G$295.19 (14.28) peak on 3 October. DiG has bounced off its 200 DMA (G$267.29 or 12.93 oz), but breaking down through that will be its next definitive step. Chart is on the right:

    Dow in silver has also plunged, from a peak at S$1,305.57 silver dollars (1,009.78 oz) to (S$1,200.72 (928.68 oz) today. It is below the 20 DMA, has cracked the upper boundary line it overthrew in September, and is hovering above the 50 DMA. Trend has reversed.

    Remember that I watch the Dow in Silver and Dow in Gold because they pinpoint not only highs in stocks but also lows in the metals.

    The US Dollar gained 26 basis points today (0.31%) to 85.29. It has established a downtrend that will run into the former Uptrend line about 84, where the 50 DMA also awaits. No change, trend abideth earthward.

    Dollar’s break has occasioned rallies in the euro and yen, albeit lazy ones. Euro lost 0.38% today to end the day and week at $1.2760, but it should move higher. Yen has backed off the last two days, lost 0.51% today, and closed at 93.57 cents/Y100. Working its way higher.

    Turmoil in the bond markets this week as investors spooked out of junk bonds and crowded into US government treasuries. (Imagine that: considering US government debt as a “safe haven,” after they have defaulted at least three times in the last 200 years.) 10 year treasury yield recovered some yesterday and today, but only to 2.199%.

    Y’all enjoy your weekend!

    Aurum et argentum comparenda sunt — — Gold and silver must be bought.

    – Franklin Sanders, The Moneychanger

    © 2014, 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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