Something very odd and very encouraging happened in gold today. I'll explain later.
Stocks continued to trip and stumble today, tracing out a reversal. All indices fell, and the Dow fell 44.89 (0.27%) to 16,425.10. It tried to rally out of the gate, but fell sharply before noon. Traded underwater until about 2:00, then tried to rally, peaked its head above the surface of unchanged, then sank again. Very weak.
S&P500 lost 0.25% (4.6 points) to end at 1,826.77. Clearly a correction is brewing -- or better, has begun.
Dow in Gold & Dow in silver are yea-saying both lower stock prices and higher prices for metals. Even with gold lower at Comex close, the Digs lost 0.25% to 13.28 oz (G$274.52 gold dollars). The 20 day moving average at 13.25 can feel the DiG's breath on its neck.
Dow in silver lost 0.22% to 814.74 oz today, & fell below its 20 DMA (818.8). Both indicators remain above their 50 DMA (783.55 oz & 12.71 oz), which roughly marks their trading channel's lower boundary line. To make it clearer, a fall through that level will be a lot like diving with an anvil tied to your ankle.
By the way, the gold mining stock indices are still encouraging. GDX, XAU, & HUI all rose slightly today. All have turned up, but all need to confirm by rallying higher.
US dollar index today swooned, whether on bad economic numbers from the ISM report, or Janet Yellen's confirmation as the new head criminal at the Fed, no one can say. If we lived in a rational world, the appointment of a mouth-foaming inflationist as head currency guardian would have people selling dollars like the Russians were on Main Street. Anyhow, the dollar lost 26 basis points (0.32%) to 80.78, turning back to kiss the downtrend line good-bye. Technically, dollar index remaineth "broken-out" above its downtrend.
Euro made time at the dollar's expense, up 0.35% to $1.3636. However, buying the euro would be like taking a job carrying fruit jars of nitroglycerin by hand riding a goat up Pike's Peak -- 'tain't no job with a future. Euro has already made a double peak, leaving behind an island reversal on this last one, and when it clears $1.3575, it will dive like one of those Mexicans off the cliffs at Acapulco. Only problem will be -- whoops! -- somebody drained the ocean.
Yen seems to have turned up today, breaking through the downtrend line. Added 0.66% to end at 95.99 cents/Y100. Faced with a choice of buying the yen or a dose of the flu, I reckon I wouldn't have to ponder long to choose the flu.
Here's what happened in gold. "Somebody" early this morning dumped one huge 11,660 contract sell order (1,166,000 ounces) on the futures market, BUT IT FAILED TO BREAK THE PRICE. Gold dropped $30 an ounce in less than a minute, but instead of triggering an avalanche of new selling, gold quickly rebounded. The trick "somebody" has been playing since since April no longer works.
What does that say? Gold has been shaken out of the weak hands, & loads of sellers are ready to buy at lower prices. That event helps confirm my working assumption that silver & gold bottomed on 31 December, and have completed the 2011-2013 correction by posting double bottoms with the June lows.
That said, bear in mind we need to witness confirmations.
It's sort of like that wonderful girl you have your eye on. It's progress when she accepts your offer of a date, but confirmation when she accepts your proposal of marriage.
But at Comex close gold had lost 60 cents to $1,237.80 & silver 10.5 cents to 2007.7c. Considering the pounding gold took, that's not bad.
Now look: gold & silver both remain ABOVE their 20 day moving average, so short term momentum is upward. Both are within spitting distance of their 50 DMAs ($1,258.65 & 2044c). All other indicators are signaling higher prices, and the 12 day rate of change just today turned up.
What about Unconfirming? Well, a gold close below $1,195 or silver close below 1935 cents would gainsay my rally assumption. Even aware of that, I'm riding this wave.
I have Thirteen (13) one hundred ounce silver bars, Engelhard, Johnson-Matthey, or equal, that I will sell in lots of four (4), Five (5) or one lot of Thirteen at $2120 each, plus $35/order shipping. That's about $50 a bar below usual retail. First emails to firstname.lastname@example.org buy 'em. Remember that all sales are final, whether the market rises or falls tomorrow. You'll come nearer getting a fill if you say "13 or fewer." If you order 'em, you bought 'em. Include your name & phone number in your email. I don't read minds since I lost mine. No re-orders at that price.
Today is the celebration of the Epiphany, the manifestation of Christ to the Gentiles embodied in the visit of the Three Magi to the infant Jesus. It is also the 12th and final day of Christmas.
On 6 January 1941 President Frankiln D for Deficit Roosevelt delivered his Four Freedoms speech: Freedom of speech, freedom of worship, freedom from fear, and freedom from silly political speeches promising impossibilities. Wait, wait -- did I get that right?
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Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger