Yes, yes, yesterday's commentary prices below contained an error. I mistyped the gold spot price then current as $1,613.20, roughly $400 higher than the $1,210.60 Comex close. That was an error. Please forgive me. I operate in haste at day's end, and, unlikely as it sounds, I occasionally err.
The heart of contrarian investing is to watch what the crowd does, & do the opposite. Right now, you couldn't find a radioactive dollar bear with a Geiger counter, because there ain't no dollar bears, period. Everybody's convinced the dollar is going higher, which means they've already placed their bets that way. Trouble is, who's left to buy it, if everybody already has?
Their case is built on expecting the Fed will raise interest rates, but how can the Fed do that in the face of a struggling economy? Worse yet, a rising dollar wreaks havoc on American industries' ability to compete overseas. Whoops, it also has some debt default implications for all those borrowers outside the US, some of them sovereign nations, who have to pay back now more expensive bucks.
Long & the short is, the Fed will shortly find its fingers in the wringer & begin exercising their jawbones to talk the dollar down. Either that, or they've lost their feeble minds & in fact want & intend to destroy the American economy.
That's certainly one explanation.
Stocks kept on jubilatin' today, the Dow rising 323.35 (1.84) to 17,907.87. S&P500 rose 36.24 (1.79%) to 2,062.14. That puts both indices above their 20 & 50 day moving averages. Give 'em another day or two to see what they have in mind, but I am still inclined to favor gravity.
Dow in gold and Dow in Silver tangled their feet in the 20 & 50 day moving averages, coming up from beneath. DiG closed at G$306.15 (14.81 troy ounce). Funny how nobody at all thinks of the Dow in Gold DOLLARS, but it still has clustered around that G$300 gold mark. (G$20.6718 = 1 troy ounce)
Dow in silver climbed 2.8% to S$1,413.96 silver dollars (1,093.61). (S$1.2929 = 1 troy ounce).
Both remain in the Gator Jaws pattern, ready to fall out of that broadening top.
US dollar index is just a-climbin' & a-climbin', with no end in sight, except the one I discussed above. Dollar index is hugely overbought on the RSI. Today it added 36 basis points (0.4%) to close at 92.57.
Euro fell more, to a new low at $1.1793, down 0.38% while the Yen also fell 0.38% to 83.56c/Y100.
WTIC rose again today, 0.08% to US$48.79/barrel.
Steve Saville mentioned in a report today that gold has broken out to the upside against the Euro & Yen, and, I would argue, the British pound sterling, too.
Euro Gold is the most dramatic, breaking above 15 month resistance about 990 - 1000 to close at 1,025 today. Chart's here, http://scharts.co/1AuUO8W
Yen gold is pretty clear too, but still needs to climb above Y14,827, but it has completed a 17 month pattern. Closed today at 14,460. Chart's at http://scharts.co/1AuUZku
Pound gold has broken out of a 12-month even-sided triangle and closed today at 801, but needs to prove itself by climbing over 837.20. http://scharts.co/17nIiyp
This gold strength against other scrofulous, scurvy fiat currencies is exactly what we want to see. Once the dollar breaks, gold will soar.
But its wings were clipped today. Gold dropped $2.20 (0.18%) to $1,208.40. Silver dropped 0.96% or 15.9 cents to 1635.1 cents.
Yes, yes, gold dropped below $1,210, but it is correcting, now isn't it? Remains above 20 & 50 DMAs ($1,198.59 & 1191.59 & 1616c & 1619c). That 20 DMA might make a good target for 'em.
Gold/Silver ratio went the wrong way today, rising to 73.904, above the 50 dma but below the 20. It is possible that silver might trade as low as 1575 cents & gold as low at $1,200 - $1,190 just to scare the life out of us, but they won't fall off the face of the earth. This is just a little correction.
. . . he said, biting his nails.
On 10 January a.d. 794 Vikings attacked and sacked the monastery at Lindisfarne Island, off the coast of Northumberland.
On 8 January 1815 Tennessee Volunteers (and some from Kentucky) led by Tennessean Andrew Jackson saved y'all's yankee bacon at the Battle of New Orleans. If he hadn't done that y'all would all be singing God Save the Queen instead of the Star Spangled Banner, & be forced to drink tea -- HOT tea -- three times a day.
On 8 January 1835 for the first and only time US government debt reached zero, in the presidency of Andrew Jackson, who, y'all may not know, came from Tennessee.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger