• Today's Little Slides in Silver and Gold Prices Don't Mean Much

    7-Jan-15 Price Change % Change
    Gold Price, $/oz 1,210.60 -8.70 -0.71%
    Silver Price, $/oz 16.51 -0.09 -0.56%
    Gold/Silver Ratio 73.325 -0.113 -0.15%
    Silver/Gold Ratio 0.0136 0.0000 0.15%
    Platinum Price 1,220.70 -0.10 -0.01%
    Palladium Price 792.45 -7.95 -0.99%
    S&P 500 2,025.90 23.29 1.16%
    Dow 17,584.52 212.88 1.23%
    Dow in GOLD $s 300.27 5.75 1.95%
    Dow in GOLD oz 14.53 0.28 1.95%
    Dow in SILVER oz 1,065.08 18.79 1.80%
    US Dollar Index 92.20 0.39 0.42%

    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

    Everybody has to get accustomed to markets swinging back and forth, and learn to tell when the moves mean something and when they don’t, and Mercy! all that’s a lot tougher than it sounds. Today stocks rose strongly, but look at the context of indicators pointing down, a long preceding drop, negative internal strength measures, and old age. Likewise, silver and GOLD PRICES today fell back as attention turned to stocks and the dollar, but they fell not beneath critical support/resistance at $16.50 and $1,210.

    The SILVER PRICE today lost 0.6% or 9.3 cents to close Comex at $16.51. The gold price gave back 0.75 or $8.70 to end at $1,210.60.

    The GOLD PRICE range was a pitiful $10, which encourages the conclusion that nobody was playing today. Silver range was a tee-tiny 34 cents,

    Now look back four days. Of those, three were strong upmoves, so a breather here shouldn’t shock anyone. And both remain way above their 20 and 50 DMAs. So against all that background, today’s little slides in silver and gold prices don’t mean much. Now if they slide a lot further, say to $1,189 and $16.00, there’s a problem, but not until then.

    GOLD/SILVER RATIO today closed slightly lower, 73.325 against yesterday’s 73.439. It literally lies right on the support line of the diamond. A breakdown here would be very positive for silver and gold prices.

    The folks at the Federal Reserve were at it again today, roiling markets and supporting their favorites with the hot-and-cold-out-of- both-sides-of-your-mouth December Fed Open Market Committee meeting. This act is as bad as Alan Greenspan’s, just a different approach. However, the Fed’s seeming nod of the head to raising rates later not sooner was enough to breath hope back into stock buyers.

    Wow, saith the hayseed, that Dow rose 212.88 (1.23%) today to 17,584.52! And the S&P500 rose 23.29 (1.16%) to 2,025.90.

    Right, and they remain a right smart below their 50 day moving averages. And they burned a lot of buying power to get there. Mmmm.

    What next? Stocks may rise for a day or three, but gravity is calling. Of course, I am always looking over my shoulder for the surprise, which would be continued stock market strength, hanging on near the highs or pushing to new ones. Listen, the bull market’s not based on economic outlook or any meaty reason, just on injections of new money creating a bubble. Bubbles get crazy, and take longer than you imagine to pop. Quite literally, anything can happen.

    But before this twelvemonth has passed, stocks will have fallen much, much lower and silver and gold will be higher.

    FOMC minutes sent the US dollar index higher, but why I don’t know. I’m sure somebody on TV can tell you, but I can’t. Primary determinant of exchange rates is interest rates, and although real US rates may be higher than yen and euro rates, speculators are buying “on the come,” sure the Fed will raise interest rates. In a pig’s eye, I say, because raising rates will burn down the Potemkin stock market they have spent so much time building. Not only will they keep rates low for the stock market, they will also crank up QE5 quick as stocks begin to reek of death.

    THAT’S when it will get interesting.

    Euro keeps on sinking, down another 0.19% today to $1.1842. Yen lost 0.6% to 83.90, but that’s just a kiss back to break out. US dollar index rose 39 basis points (0.42%) to 92.21

    Steve Saville has written an especially good article )with a link to an even better one): “Tell me, again, how the end of the Fed’s QE program will be bearish for gold?” The fundamental principle he presents, that gold’s price moves opposite to confidence in the financial system, helps explain a lot. Read the article at http://bit.ly/14oKSCq It wouldn’t hurt y’all a bit to subscribe to his free blog or to subscribe to his excellent paid newsletter, The Speculative Investor. He will teach you well and he can write a correct and complete English sentence. Course, he’s from Australia, so that probably explains it.

    On 7 January 1982 the Bank of North America, intended to be a sort of central bank for the US, opened in Philadelphia. Apparently they had so little specie (gold and silver) that they hired two men to send bags of coins up on a dumbwaiter that opened into the lobby, then wheel those bags across the lobby on a dolly, carry them downstairs, load them in the dumbwaiter again, and repeat the exercise, creating the impression that the bank was moving a lot of money around. Banks’re still doing the selfsame thing, just with different methods of deceit. Same outcome, better technology.

    On 7 January 1901 New York Stock exchange trading exceeded 2 million shares for the first time in history. Today it traded 77.8 million shares.

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

    – Franklin Sanders, The Moneychanger

    © 2015, 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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