• This was the Week that the Gold Price Bottomed, at Least for Now

    31-Oct-14 7-Nov-14 Change % Change
    Gold Price, $/oz. 1,171.10 1,169.70 -1.40 -0.1
    Silver Price, $/oz. 16.077 15.699 0.378 -2.4
    Gold/Silver Ratio 72.843 74.508 1.665 2.3
    Silver/gold ratio 0.0137 0.0134 -0.0003 -2.2
    Dow in Gold $ (DIG$) 306.97 310.58 3.61 1.2
    Dow in gold ounces 14.85 15.02 0.17 1.2
    Dow in Silver ounces 1,081.70 1,119.43 37.73 3.5
    Dow Industrials 17,390.52 17,573.93 183.41 1.1
    S&P500 2,018.05 2,031.92 13.87 0.7
    US dollar index 86.97 87.63 0.66 0.8
    Platinum Price 1,236.20 1,213.30 -22.90 -1.9
    Palladium Price 791.45 772.20 -19.25 -2.4

    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

    Before we look at silver and GOLD PRICES, I want y’all to think about Signs of a Bottom. This is near universal revulsion with a market, including especially newspaper headlines in newspapers that normally don’t headline such things. I can’t imagine a much more universal scorn for silver and gold right now and the paper in Eugene, Oregon ran one of those “Gold is dead” headlines today.

    Another sign of a bottom is that old bulls throw in the towel. That is, they did well on the way up, and have held on a long time in anticipation of another ride, but at last they give up. I have been witnessing old bulls selling out.

    Another sign is that new buyers enter the market. I’ve been seeing those, too.

    The GOLD PRICE today rose $27.30 (2.39%) to $1,169.60. The SILVER PRICE rode right alongside, rising 30.7 cents (2%) to $15.699. Both metals posted the first day of a key reversal up with a break to new low ground and a higher close. After a five day waterfall, that surely marks the end of the plunge and beginning of some rally.

    But what kind of rally? Can we say that this week’s lows were THE lows of the 2011-2014 bear move? Not yet. The gold price needs to climb above $1,255.60, the last high, before I would venture that. Silver needs to rise above $17.82. In any event, we ought to see a sharp rally from here, especially if stocks fall next week, as they may.

    Meanwhile all the indicators I watch are turning up, so next week ought to float metals higher.

    GOLD/SILVER RATIO today closed at 74.502, highest close yet. That also suggests a bottom. It also suggests it’s high time to swap gold for silver and wait for the ratio to drop to 30.

    Funny how you think you’ll never live through a week, but when Friday arrives it doesn’t seem so bad after all.

    This was the week silver and gold bottomed, at least for a while. This may have been the week stocks reached their ultimate high — we’ll see next week. And it may be the week the US dollar index, for all its strength, turned equatorward.

    Dow and S&P500 are both bumping up against an overhead resistance line in place for the last few months. And both have formed broadening tops.

    Step back from the Dow or S&P chart, way back, about 20 years and you’ll see since 1998 a Megaphone or Broadening Top formation. Right now the Dow is knocking on that line (S&P500 is already through it), so technically, after a 5 year bull run, stocks ought to be meeting impenetrable resistance. I know, I know, with the central bank tag team rolling Quantitative easing around the world, it might go further (newly created Japanese money only funds a carry trade that sends money back to the US to buy more stocks). But technically, I wouldn’t bet on it.

    Today the Dow hit its third new high in a week, up 19.46 (0.11%) to 17,573.93. Likewise, the S&P500 made a new high at 2,031.92, but I can’t tell how much that’s up because the numbers on the NASDAQ site don’t tally with yesterday’s close. No matter, both indices moved up very thinly today, in spite of good news from the official liars at the Labor Department about increasing jobs.

    After three weeks of unbroken rise, the Dow in Gold finally fell sharply today. High this week was 15.38 oz or G$317.93 gold dollars, but today it fell 3.07% to 14.91 oz or G$308.22. Ditto for the Dow in silver, which peaked this week at 1,143.15 oz or S$1,478.01 silver dollars. Bothe are excruciatingly overbought, and it catches my eye that the rate of change and full stochastics have turned down. Next move points down.

    It would exaggerate some but not too much to state that the source of all sorrow in the last 100 years has been fiat money and central banking. Think about it: without central banks, world wars would be impossible. More, fiat money controls us and everything else. So when I rave and stomp about scabrous, scrofulous, scurvy fiat currencies, I am at least sincere.

    The scurvy US dollar index showed forth the first half of a key reversal down today, reaching a new high intraday but closing lower for the day. That must be followed through Monday by another lower close. Preferably, a two day lower close is needed to cinch it. High came at 88.32, close at 87.63, down 58 basis points (0.66%) from yesterday.

    Both the euro and Yen closed higher today, but one day maketh not a trendchange. Euro rose 0.65% to $1.2458, not enough to climb above the last low at $1.2501. Sorry as gully dirt. Yen rose 0.54% to 87.26 cents/Y100. Looks sorrIER than gully dirt.

    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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