Whoa! Yesterday's commentary contained a whopping typo. The US $20 gold piece does NOT contain 0.9875 troy ounce fine gold, but 0.9675. I'm going to shoot my proofreader. Y'all don't tell anybody about that. I'll be really embarrassed if that gets out.
Here's a passing strange thing: Dow & S&P500 made new all-time highs this week, but closed the week lower. That don't fit. Somebody's talking out of both sides of the mouth. More, after a week's struggle that threatened to break down existing uptrends, silver & gold dug in their heels & got some traction, enough to close the week higher. So did platinum & palladium. Dollar index also rose, in one of the most bogus levitations in history.
Mark O'Byrne of GoldCore reported today that Greece's central bank reported today a record 12.2 billion euro outflow in January. That's a slow bankrun. The Green central bank also has New Drachma notes designed and ready to print, just in case. Greeks are buying physical gold, especially British sovereigns, traditionally their favorite, according to O'Byrne.
Behold & ponder, O ye Docile Dollar Holders! Why would Greeks buy gold? Because if they leave the money in the bank and Greece exits the euro, they don't know WHAT they might get, or what it might be worth. Better gold by far than taking a chance on a euro without Greece or a New Drachma.
Like Germans, Greeks have been through more than one currency devaluation, depreciation, & change-over. Nobody needs to explain it to them. They get it: gold is better than paper. Let him who has ears, hear! Too late to buy gold once the government springs its surprise party.
Here I am, poor fool from Tennessee, trying to parse these stock indices. All fell across the board today. Dow lost 81.72 (0.45%) to 18,132.70; S&P500 coughed up 6.24 (0.3%) to 2,104.5.
I remain in the meditation, "Is this a breakout or a fakeout?" To reach new highs but close the week lower, well, looks a tad sleazy. It's bad taste. S&P500 closed below its uptrend line.
Dow in gold has turned DOWN from the upper Gator jaw. Made a high at G$313.38 (15.16 oz) gold dollars (15.16 troy oz) and closed today down another 0.81% at G$308.84 (14.94 tr oz). Not out of the woods yet, but considering the long rise, that's likely the end of it. Need confirmation still. Here's a chart, http://scharts.co/1LTqEBF
Dow in silver also wilted when it neared the top Jaw. High was S$1,446.14 silver dollars (1,118.50 tr oz), and today it fell 0.72% to S$1,414.44 (1,093.98 tr oz). http://scharts.co/1vHtAxi
You can see a 5 day dollar index chart at http://quotes.ino.com/charting/?s=NYBOT_DX Soon as you see it, you'll understand what I meant by Bogus. The dollar index chart is trending down, maybe finding a footing, then on Thursday it hockey sticks straight up. After Janet Yellen couldn't get it excited this week, something suddenly goosed it over 200 basis points. I reckon I'm just suspicious, or disgusted with markets so juvenile & fidgety they'll move on a durned old lying government report. Headline today (if it's good news), footnote in two weeks that takes it all back. Hogwash. Folks have the attention span of a gnat, & far too much money to play with, thanks to central banks & their carry trades. Y'all just wait: in a bear market, money returns to its rightful owner.
Euro broke down yesterday, but has not quite matched its last intraday low ($1.1166). Today it did, however, make its lowest close for the move, $1.1196, down 0.03%. Limber up your passports & go to Europe this summer: whole continent's gonna be on sale.
Japanese yen sank 0.2% to 83.59, but it is only moving sideways.
West Texas Intermediate Crude (WTIC) did NOT break down today, but rose 1.23% to $49.52/barrel. It's traced out a trading range between $47.80 and $54.15, & it's the least bit tapering to the right. http://scharts.co/1LTtBSL
Today gold gathered up $3.00 to close at $1,212.60. Silver peeled off 7 cents for a Comex close at 1651.3c.
Silver's five day chart has no direction, but shows the mark to beat: 1690c. This week silver tumbled to a new low for the move, 1604c, and appeared ready to pierce the last support, that from a line drawn across the shoulders of the Head & Shoulders formation. Silver has also traced out a falling wedge. Y'all will see on this chart, http://scharts.co/1vHxKVX that silver moved away from that low and closed the week higher, although it couldn't close the week above its 20 & 50 DMAs. MACD is striving to turn heavenward, but volume has dried up. Overall, I have to call the week a "good save."
Gold's five day chart shows a steady but not particularly pretty advance. Is that a forward move, or merely a correction of a downward move?
The week's action was encouraging. Gold dropped through the uptrend line to a low at $1,190 and looked ready to sink to the earth's molten core. It didn't. Turned around and rose away from the line. However, it hasn't done anything yet to reveal its mind. It must best resistance at $1,220 and $1,240, with $1,230 a nasty swamp inbetween.
A chilling thought choked me this evening: maybe I am hurting y'all more than I am helping. Maybe poring over charts every day gives you a utopian, perfectionist mindset. In other words, the will o' the wisp of picking a bottom perfectly.
That's a deadly delusion. Sivler & gold probably bottomed in November, but even if they didn't the downside risk probably isn't $70 for gold from here, or a dollar for silver.
Today those look like big distances, a year from now they won't. I remember when gold finally reached $340. I chewed ten penny nails and sweat bullets over whether to buy there or wait for the "inevitable" correction to $320. Wadn't I a durned ole nat'ral born fool from Tennessee! Why that $340 gold would look pretty well bought today, wouldn't it? Oh, no, I had to wait for perfection, and watch it punch through $340 and fly away.
Anyhow, the Greeks buying sovereigns reminded me of something else. With bank deposits & bonds not paying any interest, and actually costing you money when you figure in inflation, I'd a sight rather have my money in gold where at least there's SOME chance of appreciation, instead of a guaranteed loss in paper money. And what if there was another financial panic or bank closure? Way too late to buy gold then, like waiting till the tavern fight breaks out to shop for a Bowie knife.
Sound like I'm trying to persuade y'all of something? Well, I am. My life's work has been to point people to the fatal perils of fiat money & the safety of metals. Making money on gold and silver as an investment is just cream cheese icing on that cake of safety.
Y'all enjoy your weekend.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger