The <b>Gold Price</b> Soared $18.60 to Close at $1319.00 |
- The <b>Gold Price</b> Soared $18.60 to Close at $1319.00
- 6 Remarkable <b>Gold Charts</b> This Week | <b>Gold</b> Silver Worlds
- The <b>Gold Price</b> Is Rising. What's Gold's Message? | Gold Silver Worlds
| The <b>Gold Price</b> Soared $18.60 to Close at $1319.00 Posted: 14 Feb 2014 03:17 PM PST Gold Price Close Today : 1,319.00 Gold Price Close 7-Feb-14 : 1,263.30 Change : 55.70 or 4.4% Silver Price Close Today : 21.411 Gold Silver Ratio Today : 61.604 Silver Gold Ratio : 0.01623 Dow in Gold Dollars : $ 253.18 Dow in Gold Ounces : 12.247 Dow in Silver Ounces : 754.49 Dow Industrial : 16,154.39 S&P 500 : 1,838.63 US Dollar Index : 80.180 Platinum Price Close Today : 1,428.50 Palladium Price Close Today : 737.40 This week was the week and today was the day for silver and GOLD PRICES. Gold broke through $1,300 yesterday and the shorts went skittering today as gold soared $18.6 (1.43%) to close at $1,319.00. Silver shocked even me, vaulting 102.6 cents (5.03%, yes!) to close Comex at 2141.1c. Where to start? First, parallel markets. Platinum and palladium have been trending up for nearly two weeks. Platinum closed on its 200 DMA today while palladium stands way above all moving averages, i.e., momentum is skyward. Gold/Bank Stock Index spread, which rises when faith in the financial system is falling and vice versa, is rising. XAU, GDX, and HUI precious metals mining stock indices have all broken out upward and crossed above their 200 DMAs this week. The GOLD PRICE very nearly broke upward through its since-August-2013 downtrend line this week, the chart shows a double bottom, other indicators are floating upward, and it has broken through its 20 week moving average. The daily chart is just too beautiful to miss. Look here,
Only problem with this picture is that it can leave us so giddy that we overlook that stochastic indicator that is flashing a warning. I don't think this rally has ended, but around $1,350 - $1,360 it will likely begin losing altitude. This rally has run since 31 December 2013.
Yesterday I said I'd be surprised if silver didn't close above 2050c today, but I was not prepared for today's explosion. Silver was pressed and packed against that April downtrend line and the tope of the range at 2050c, and when it burst through it couldn't stop until it punched clean through its 200 DMA and almost 2150c. That implies that before this rally ends silver will reach 2300c, maybe higher. Silver's weekly close today took it above the since-April 2011 downtrend line on the weekly chart. Once more, be wary! Next week or two will likely be VERY heady in silver, but markets move up in waves, back and forth, pendulum-like. And once more, the possibility exists but daily grows dimmer, that silver and gold might yet make one leg down to lower lows. I don't believe that will happen, but the possibility remains. Meanwhile, I am buying. Since anything I say about my competition is bound to sound invidious, I seldom say anything. However, I warn y'all that not everybody can be trusted. Many, many times in my almost 34 years in this business I have seen the big "players" and "cheap sellers" evaporate overnight. The gold and silver industry works on very, very small margins, 3.5% to 1% commission, so there's a problem with "cheap prices": very little room to discount. Years ago Krugerrand Corporation in Florida (that location and California are a potential tip-off) figured out they could sell Krugerrands at a very cheap price if it didn't bother with actually buying them when it sold them to customers. Same business model as Bernie Madoff and Carlo Ponzi. Just today a customer called and told us about a friend who had sent a large sum to a "cheap-selling" California dealer but now cannot get delivery. Before you do business with ANY gold or silver dealer, take a few moments to check them out with the unbiased Better Business Bureau. Frankly, I have no ambitions to rank as "Cheapest Seller in the US" or "The WalMart of Silver and Gold." I know what it costs us to stay in business, and I know what sort of tailored, profitable, and professional guidance we give every customer, large and small. I figure "the workman is worthy of his hire," but if you don't, then go to the cheapest seller on the Internet and enter your order without ever talking to a human or getting any professional advice. And I hope you get delivery. Before I forget it, let me remind y'all that if you ever expect to swap gold for silver at spot ratios above 60:1, you had better do it quickly. I recommend swapping gold for silver now, targeting a swap back at 31:1 or better. WOW. What a week, and much of it happened today in metals! Stocks recovered this week, running toward their soon and ultimate top. US dollar index wilted. White metals also zoomed up. US Dollar Index melted, falling through the uptrend line that had caught it since last November. Since mid-September it has range-traded from 81.60 to 79.75, and now is drawing close to that lower boundary. It also is nearing the downtrend line from September, same line it broke through upward as December closed. A fall through that line, which stands about at the bottom of the trading range, about 80, would foretell much pain. Today the dollar index lost 18 more basis points (0.22%) to end at 80.18. Big gainer from the Dollar index's fall was the euro, which rose 0.15% to $1.3698, beating its head on the old uptrend line it fell through in January. I have it on my list to buy euros right after I have all my teeth pulled by an orangutan wielding wire pliers. I like to pile one killer pain atop another. Yen hardly budged today, up 0.385 to 98.22 cents/Y100. Momentum is up, NGM's determination is down -- which do y'all think will win? I note in passing that the 10 year US treasury note yield rose 0.37% today to 2.746%. It's skating above its 20 DMA, above its 200 dma, trading sideways. Better watch it. The Federal Reserve's house of cards begins trembling when it breaks above 3.1%. STOCKS spent the last week recovering from their gigantic January fall. Dow gained 126.8 (0.79%) to 16,154.39, S&P500 clumb 8.8 (0.48%) to 1,838.63. Mercy, y'all, this is a doomed effort. It can end sooner, or it can end later, but end it will by end-May. Oh, the weeping, wailing, and gnashing of profits! Please, protect yourselves. Whooo! That Dow in Silver put some HEAVY sinkers on its line today and sank, sank, sank. Ended down 4.04% (31.72 oz) at 754.14 oz, breathing hard down the neck of the 200 DMA at 738.95 oz. Crossing below that will turn momentum unarguably down. Dow in gold lost 0.62% to close at 12.25 oz (G$253.23 gold dollars). All indicators speak with one witness: DOWN. Y'all enjoy your weekend! Argentum et aurum 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.  | ||||
| 6 Remarkable <b>Gold Charts</b> This Week | <b>Gold</b> Silver Worlds Posted: 09 Feb 2014 01:36 PM PST In the course of the past week, several exceptionally interesting charts were released on GoldSilverWorlds and other websites. In this article, we collect the most interesting charts expressing gold's fundamental and technical picture. Weekly chart in a downtrend but at major resistanceThe lack of downside follow-through, after the highest volume bar 7 trading ranges ago, has been an anchor for the current rally, of sorts. The caveat as to which way price will move from here is the trend, which favors lower price behavior until there is an indication of change. Right now, such an indication is absent. Of minor concern is the location of the closes for the 3 bars at the end, tending toward the lower range of each bar. The offset is the fact that despite apparent weakness, price did not move lower. If gold trades higher next week, the daily trend will turn up, and confirmation will come from a lower swing high on the next correction (source). Inverted correlation gold vs equities about to break out?From a broad perspective, it is likely to see an inverse correlation between gold and Equities just like we saw throughout the last bull market in the 1970's (source). The key level to watch on the Dow on a weekly close basis is the 55 week moving average at 15,218. It should also be watched in conjunction with the 55 week moving average on the S&P 500 at 1,672 (see Equities section for more details). The key medium term level on Gold is the double bottom neckline at $1,433. The pattern would target $1,686 (source). Fundamental divergence in the price of goldUntil last year destroyed gold's multi-year bull reign, the expansion of the U.S. balance sheet and the price of gold over the past decade moved in near lockstep. From 1999 through 2012, the correlation coefficient of the rising price of gold to the Fed's climbing assets was 0.95. Even with the tapering of the bond purchases that began in late 2013, the Fed's balance sheet remains on an upward trajectory and much higher than the price of gold. This suggests we should see much higher prices (source). JP Morgan turned from seller to buyerThe chart below shows the month-by-month number of contracts that were either provided to the exchange or taken from the exchange by JPM. For a single firm, the numbers are large, but the effect across all gold markets is greater because so many gold transactions follow the price set in the paper futures market. What jumps out from the chart is the fact that while JPM had been selling gold into the futures market for most of the year, it made a major shift in December, absorbing 96% of all gold delivered. That is a radical shift and an indicator that JPM's policy has shifted. Bud Conrad notes: "In my opinion, their deliveries of gold were suppressing the price during 2013, but now their policy has shifted in a way that will support gold going forward" (source). Big US banks are now net long goldAnother confirmation of the shift by big banks comes from data provided by the US Commodity Futures Trading Commission (CFTC) that shows the net positions of the four biggest US banks in the futures market. There has been a dramatic change from being short the market to now being long (source). | ||||
| The <b>Gold Price</b> Is Rising. What's Gold's Message? | Gold Silver Worlds Posted: 14 Feb 2014 02:59 PM PST This article is an excerpt from an excellent analysis by the main editor at acting-man.com (source). The idea is as follows: gold has a habit of discounting the future far in advance. This is why its price inter alia actually fell in an environment that should have been very bullish. With the Fed and the BoJ both engaging in 'QE' to a never before seen extent in 2013, many people thought that gold should rise rather than fall in price. However, the gold market seemed more focused on the fact that the various actions by central banks (including the ECB) had removed quite a bit of the previously extant risk premiums from the markets. 'Safe haven' currencies like the Swiss franc and the yen began to fall when it e.g. became clear that the euro area would not immediately blow up. Also, the gold market likely anticipated that there would be an increase in economic activity in the US (note: we regard 'activity' in this context not necessarily as a sign of genuine, sustainable economic growth) and that the federal budget deficit would as a result decline. This in turn made the eventual removal of the hyper-accommodative Fed policy more likely. Of course there was a long period of time when it seemed just as likely that 'QE' would be increased rather than reduced and we actually happen to think that the current 'tapering' phase will eventually be reversed. Alternatively, other major monetary pumping measures may eventually be taken. One reason to believe so is precisely the fact that the gold price is now rising in the face of 'QE tapering'. It represents an early warning sign. Gold may be warning of a coming 'unexpected' reversal in economic activity as a result of the current sharp slowdown in money supply growth. There is also a possibility – more remote, but it cannot be dismissed out of hand – that there will be an unexpected increase in 'inflation expectations' not too far down the road. So far, the huge increase in the money supply since 2008 has only affected asset prices, but there is no guarantee that this will remain to be the case. Admittedly, we believe it at the moment more likely that the economy will weaken and that the central bank will in reaction to that embark on another round of monetary inflation. In recent years, a weakening of economic activity has generally been associated with sharp declines in inflation expectations and the growth rate of official 'price level' measures such as CPI. It is however also possible – this is something that was after all experienced in the 1970s – that weakening economic activity and rising inflation expectations will go hand in hand. What will precisely happen is a matter of contingent circumstances that cannot be foreseen with any degree of precision. What can be stated with a reasonably degree of certainty is only this: if money supply growth continues to falter, then a number of asset price bubbles as well as the economy will eventually falter as well. All the economic activities that depend on continuing or even accelerating monetary inflation will have to be abandoned. Since these activities consume rather than produce wealth, this is actually a good thing, but it will register as a recession in the official data and hence be regarded as 'bad'. The Fed will undoubtedly swing into action if, or rather when, that happens.
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