• Gold Price Has Now Closed Two Weeks Above the Downtrend Line from the October 2012 Top

    16-Jan-15 23-Jan-15 Change % Change
    Gold Price, $/oz. 1,276.90 1,292.60 15.70 1.2
    Silver Price, $/oz. 17.739 18.284 0.545 3.1
    Gold/Silver Ratio 71.983 70.696 -1.287 -1.8
    Silver/gold ratio 0.0139 0.0141 0.0003 1.8
    Dow in Gold $ (DIG$) 283.50 282.63 -0.87 -0.3
    Dow in gold ounces 13.71 13.67 -0.04 -0.3
    Dow in Silver ounces 987.18 966.56 -20.62 -2.1
    Dow Industrials 17,511.57 17,672.60 161.03 0.9
    S&P500 2,019.42 2,051.82 32.40 1.6
    US dollar index 92.99 95.24 2.25 2.4
    Platinum Price 1,269.80 1,268.00 -1.80 -0.1
    Palladium Price 754.30 775.40 21.10 2.8

    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 stumbled $8.10 (0.62%) to $1,392.60 on Comex; silver shaved off 6.2 cents (0.34%) to $18.284.

    Gold Silver Ratio

    GOLD/SILVER RATIO fell again, to 70.696. Looking at the chart it left a little gap behind between 72 & 72.25. If we see a correction, it ought to rise at least that far to close that gap. Chart on the right:

    Gold Price Breakout

    On the weekly chart the GOLD PRICE has now closed two weeks above the downtrend line from the October 2012 top, and closed above its 20 & 50 week moving averages. Folks, this is a breakout. Take not my word for it, see with your own eyes,
    chart on the left:

    Silver Price

    Depending on where you draw the line, weekly silver has either broken out or is about to break out. I’ll be conservative and draw the line above. Has surpassed its 20 week moving average ($16.84) but rests beneath its 50 week MA ($16.84). Chart on right.

    The gold price has hit that downtrend line from the 2012 high and the $1,300 resistance, but could break through this time. That’s all right. It makes a little correction here, maybe as far back as the 200 DMA at $1,255.33 but probably not that far. After that it will surge for the target, $1,350. Of course, if it opens next week above $1,300, it doesn’t intend to correct.

    Gold in Euros

    By the way, have a look on the right at Gold in Euros, and I noticed last night that Pat Heller of Liberty’s Outlook reported that the gold price was the second best performing currency in 2014, after the dollar.

    Silver has reached its 200 DMA and the $18.50 resistance. Whether it corrects here or bulls on through, it’s natural it would pause at this line for a breather. Target for this move completed remains $20.60.

    The scoreboard don’t lie, and what a story it do tell! Silver up 3.1%, gold 1.2% higher, stocks for all the sound & fury up only 0.9% & 1.6%. Big mover was the US dollar index, now in a hyperbolic rise, a move that endeth always in tears & great reversals. White metals slept away the week.

    I really only want to talk about metals, but I’m in it now so I’ll look at the others.

    Stocks gave back today most of yesterday’s gains. Dow coughed up 141.38 (0.79%, out of yesterdays 259.7 gain) to 17,672.60 while the S&P500 refunded 11.33 (0.55%) to close at 2,051.82.

    If I say to you, “This acts like a market that is struggling, a weakening market,” what do I mean? First, these indices couldn’t hold on to those big gains, even though they weren’t new highs. Second, that left the Dow below the (presently intertwined) 20 & 50 DMAs which yesterday it had overpassed: gave back the milestone. Third, Dow hit the downtrend line from the December high & closed barely above it yesterday; today, it again closed under. S&P did not match those, & closed yesterday further through its downtrend line, but another question arises: Why are they not confirming each other? If the S&P500 could stay up there, why not the Dow. Whoops, every other important index except the Nasdaq twins (up 0.16 & 0.18%), closed down. Well, okay, the Wilshire 5000 was unchanged. Arguing against my liverish outlook are some momentum indicators which might be turning up. Looks like a market struggling to me, but remember stocks are a huge market and roll over slowly.

    Dow in Gold

    Dow in gold fell a minute 0.06% to G$282.58 gold dollars (13.67 troy ounces). Eyecatching, because it bounced down off the uptrend line from August 2013. Might be readying an upward correction. Remember the Dow in Gold and Dow in Silver FALL when metals outperform stocks, and rise when stocks outpace metals. Look at the chart on the right.

    Dow in Silver

    Dow in silver tripped 0.58% to S$1,248.61 silver dollars (965.72 troy ounces). Both indicators have broken down from a Gator Jaws formation (Broadening Top) which implies that the trend dominating since September 2011, namely, metals losing value against stocks, has changed & now metals will gain against stocks for several years. Chart on the left.

    There’s an old technical saw that says when a market breaks upward out of its trading channel, you can draw a new top channel line ABOVE at the same width as the old channel, so that the old top channel line becomes the mid-line of the channel. Since the US dollar index, scrofulous parasite upon the earthball’s peoples, has burst through its top channel line, we add that new top channel line and find it crosses the scale at 99.5. That’s not saying it will reach that level, only to give you warning it might reach for that line.


    Just as likely (in my little mind) is that the dollar has been shoved up here by the ECB announcement yesterday, so is not a permanent move. Also, the nice folk at the Fed are certainly dealing with the pressure of the US export industry which is finding itself priced out of the market by the dollar rising against the yen & euro. Sort of thing that gives Nice Government Men intestinal distress & headaches. Chart on the right.

    Euro keeps on falling, down another 1.35% to $1.1210. Yen rose 0.55% to 84.88c/Y100.

    WTIC gave up another 2% today to $45.49/barrel. Could be turning up.

    Y’all enjoy your weekend.

    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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