• The Gold Price Ranged from $1,222.20 to $1,235.50 Ending Up at $1,229.20

    28-Oct-14 Price Change % Change
    Gold Price, $/oz 1,229.20 0.10 0.01%
    Silver Price, $/oz 17.19 0.07 0.41%
    Gold/Silver Ratio 71.527 -0.287 -0.40%
    Silver/Gold Ratio 0.0140 0.0001 0.40%
    Platinum Price 1,267.10 11.90 0.95%
    Palladium Price 792.50 6.20 0.79%
    S&P 500 1,985.05 23.42 1.19%
    Dow 17,005.75 187.81 1.12%
    Dow in GOLD $s 285.99 3.14 1.11%
    Dow in GOLD oz 13.83 0.15 1.11%
    Dow in SILVER oz 989.57 6.93 0.70%
    US Dollar Index 85.45 -0.15 -0.18%

    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 ranged from $1,222.20 to $1,235.50 and for a whole day’s trading gained exactly 10 cents to $1,229.20. Silver added seven cents to close Comex at $17.185. Range was $17.40 to $17.06.

    Looking at the one day chart, it doesn’t look quite so boring. Gold shot up at 10:10, even gapped up, reached $1,235, traded up there about an hour, then was slapped down just as fast as it has risen. The SILVER PRICE behaved the same way. One wonders whether the Nice Government Men are nervous about possible gold and silver reactions to the FOMC tomorrow. If, as I suspect, stocks advance on whatever the goofs announce, silver and GOLD PRICES should take a hit, then turn around Thursday or Friday.

    Here’s another piece of the puzzle. Gold forward rates have moved into backwardation, signifying a push on for physical metal.

    Just be patient. Gravity still operates. Not even the almighty yankee government and the all-knowing Fed can defeat gravity.

    Since the long shadow of the Federal Open Market Committee (FOMC) meeting Wednesday hath put all markets but stocks to sleep, let’s think on other things.

    Stocks’ recovery from their October waterfall plunge (down 8.6% from September highs) illustrates behavior you ought to come to expect. Bear markets exhibit sudden, sharp rallies often driven by short covering. They can recover a large percentage of lost territory, but in the end fail because they are only correcting the foregoing fall. Bear market rallies evaporate as fast as they materialize.

    Seems to me — although I never underestimate the clever central bank criminals — that the Fed has worked its way into a corner with only two ways out. If they really stick with no more quantitative easing, then they risk what they call a “deflationary collapse” and face unemployment rates of 50%. On the other hand the stock market has clearly turned down and needs another dose of Quantitative Easing to ease its levitating. It’s pretty late in the game to do that, so observers are liable to punish the dollar (and reward gold and silver) for more QE. Since it’s hard to imagine the Fed not “doing SOMETHING,” one assumes they will dive in with more QE as soon as the stock market shoe begins to pinch.

    Now, it’s possible to drag this out, which is the Fed’s usual tactic, but basically they face these two choices, either [what they call] “deflation” or hyperinflation. Whenever y’all get confused by the trees, just back off and view the forest from this perspective.

    Stocks are demanding perfection in their anticipation of the FOMC announcement, and some of us already suspect that no quasi-government agency is perfect. Today the Dow jumped 187.81 (1.12%) to 17,005.75. S&P500 jumped 23.42 (1.19%) to 1,985.05. That takes both indices above their 50 day moving averages.

    Now I suppose it is possible (but I count it unlikely) that stocks might reach up and make one last high for an enormous double top — those indices, that is, that haven’t already done that. Maybe the FOMC has some trick up its atherosclerotic sleeve that might do that, but I don’t know what. Rather, I think all this anticipation will end in disappointment that grabs hold of stocks about Thursday.

    US dollar index closed today down 15 basis points (0.17%) to 85.45. That’s plumb on the line of support, so much lower and it falls over an edge.

    Both the euro and the yen are trying to rally and have established if none to convincing uptrends. Yen has fallen back in the last 2 weeks and now is crawling under its 20 DMA like it wants to turn down. Euro is pushing the upper boundary of a little triangle. It gained 0.30% to $1.2737 today while the yen fell 0.33% to 92.46.

    FOMC pronouncement will affect all this. If they push any rise in interest rates out further, it would hurt the dollar.

    I have to take my wife Susan up to Nashville for some medical tests tomorrow so I won’t be publishing a commentary tomorrow. Y’all will have to suffer the FOMC announcement in my silence.

    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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