The Gold Price Needs to Climb Above $1,630 and then Above $1,656.50

MONDAY, JUNE 25, 2012

The Gold Price Needs to Climb Above $1,630 and then Above $1,656.50

Gold Price Close Today : 1587.50
Change : 21.50 or 1.37%

Silver Price Close Today : 2752.0
Change : 85.9 or 3.22%

Gold Silver Ratio Today : 57.685
Change : -1.052 or -1.79%

Silver Gold Ratio Today : 0.01734
Change : 0.000311 or 1.82%

Platinum Price Close Today : 1439.40
Change : -28.20 or -1.92%

Palladium Price Close Today : 606.20
Change : -10.95 or -1.77%

S&P 500 : 1,313.72
Change : -21.30 or -1.60%

Dow In GOLD$ : $162.80
Change : $ (4.04) or -2.42%

Dow in GOLD oz : 7.876
Change : -0.196 or -2.42%

Dow in SILVER oz : 454.31
Change : -19.82 or -4.18%

Dow Industrial : 12,502.66
Change : -138.12 or -1.09%

US Dollar Index : 82.49
Change : 0.234 or 0.28%

Today's silver and GOLD PRICE market can be likened to September, October, November, and December 2008. Silver and gold plunged and plunged every day. In late October silver hit 880 cents, then rallied, then fell back to 879 cents on 13 November. Gold bottomed the same day, having lost 30% of its peak value. Silver lost 105% of the preceding gain. Looked like the end --- to those who grasped not that it was a BULL market. Silver and gold crept up into December, enough to begin confirming they were past danger.

The SILVER PRICE and GOLD PRICE have both tested the base of that declining triangle, gold 5 times, silver 4 times. More times support is tested, greater waxeth the likelihood it will break. If that support is pierced, silver plunges toward 2250c and gold toward $1,475, maybe $1,435. That's the REALITY.

Feels like December, 2008 to me, but then, it might be late October 2008, too. I have no crystal ball, but I believe the fight at support will be won or lost this week. Personally, I loaded up on Friday, but then, I'm a "plunger." My wife says you have to bet big to win big. Of course, some times you lose big, too.

Where are other witnesses or confirmations to watch for? The SILVER PRICE RSI did not make a new low when the price did -- bullish non-confirmation. Silver today gained 85.9 cents (3.22%)to close Comex at 2752c while gold gained $21.50 (1.37%) to end at $1,587.50, just below $1,590 resistance. Silver is knocking on 2750c resistance, just barely into it. GOLD/SILVER RATIO fell nearly fell nearly a full point, from 58.583 to 57.685. All those whisper -- whisper, they don't shout -- metals turned today.

Confirming a bottom silver needs to close above 2800c, then move rapidly above 2850c. Within a week or so after that, it ought to move through 2900c. Whether this marches rapidly or slowly grinds makes no difference, only that it steadily advances.

For the GOLD PRICE to confirm a bottom it needs to climb up and out of its present even-sided triangle (from a line connecting the lows from May through last week, and the highs from 1 May through 18 June). That requires a close above $1,630, with no telling fall-back. Fairly rapidly, afterwards, gold needs to climb above its 150 DMA (now 1,656.50).

It's a bull market. Most of the time, bull markets resolve to the upside. That's what makes them bull markets.

What will gainsay my upward outlook? Any gold close below $1,558 casts everything in doubt, a close below $1,532 shatters it. Silver must not close below 2641c, period.

There y'all go. Don't bother writing me asking for your money back. I never claimed to have a crystal ball, and I sure can't read the future. I'm just a "chart-whisperer."

Well, blast it all! I've gone MAINSTREAM! I'm so ashamed, and not a little suspicious.

My friend Catherine Fitts sent me this link to a CNBC Kudlow Report broadcast, http://www.youtube.com/watch?v=q1KnJbBJTE0 Here are not one but FOUR talking heads saying that we are all "slaves" to the central banks and that the stock market isn't driven by the economy but by central bank manipulation.

What are they up to, talking sense? Don't make no sense, coming from them.

They've shamelessly STOLEN the arguments I've been making for over 30 years. They must be desperate for ratings, stealing from a natural born fool from Tennessee.

Well, even a blind hog finds an acorn now and then. I wish 'em well, but even though they said nice things about gold -- think about THAT! -- they're only about 1/100th of the way there. Still think you can make money in stocks by outguessing the Fed. Haven't a clue silver exists in the same cosmos with themselves. Prob'ly wear them shiny, pointy Eyetalian shoes.

I wish 'em well, but they have no solution. Only workable solution is to build a real economy using real money right alongside the rotten one, so that when the rotten one falls, we'll still be chugging away, helping our neighbors and ourselves re-build.

Meanwhile in Argentina nervous savers withdrew US$522 million (in US paper dollars) last week. Seems they recall the last time government cheated them out of their savings in 2002 (never mind all the other times). To show you how desperately rotten the Argentine paper money is, next to it US dollars actually look good. Wonder why they don't just buy gold coins? Makes no sense, but maybe habit is hard to break.

All those talking heads have their work cut out for 'em this evenin', since both the US dollar AND gold rose, while stocks fell, all of which, according to the conventional guru-wisdom, ain't possible.

US dollar index rose 23.4 basis points (0.3%) to 82.49. Dollar was stymied by 82.60, but closed above its 20 day moving average (82.31), first sign of an upward turn. Looks now as if the whole move from 1 June's 83.54 high to 18 June's 81.16 amounted to nothing more than a 50% correction of the foregoing 1 May to 1 June rally.

In other words, the US dollar points higher. Considering the plights of the other bankrupt currencies and their bankrupt economies, that's no surprise. Dollar's ugly, sure, but has slightly fewer warts than the yen and euro.

After gapping down below its 50 DMA on Wednesday last, today the yen gapped up above its 50 DMA. You don't buy things like that. Market proverb says, "Gaps are always filled." That's all this amounts to, not a change of direction. Closed 125.53c/Y100 (Y79.66/US$1). Will drop further.

More I think about that sorry euro, that gapped down today, more I wonder if it won't drag the rest of the world down with it. Closed today at 1.2504, down 0.54%. 'Fore long, it'll hit 1.2000 unless the alchemists at the ECB learn how to transmute metals first.

Come now, ye prattlers! Where now is your "risk-on/risk-off" trading? Pray declare how the risk-off dollar rose while risk-on stocks fell and risk-on silver and gold rose?

Oh, y'all are so glad that you didn't own stocks today! Dow fell 138.12 points (1.09%) to 12,502.66. S&P500 hurt worse, losing 1.6% (21.3) to 1,313.72. Dow in gold dollars fell 1.94% to G$163.10 (7.89 oz), having left behind a blunt and unequivocal double top, child of confusion that has now found its way: down.

Looking back on the S&P's trajectory since it fell through the Head and Shoulders' neckline in early may, we mark that all the action in June was no more than a counter trend rally stopped cold at the 50 DMA -- didn't even reach back up to the neckline. Descent speeds up once it falls through 1,270 again.

Been thinking all weekend about those silver and gold charts: declining triangle adorns both. A declining triangle (falling to the right) generally breaks out to the downside, and potential for that is plentiful. However, against what backdrop playeth out this triangle? LO, against a BULL market.

Remember stocks from 1996 - 2000? Repeatedly formed BEARISH rising wedges, and against usual expectation broke out Upside time and again. Why? It was a BULL market, silly.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
1-888-218-9226
10:00am-5:00pm CST, Monday-Friday

© 2012, 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 $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or 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. No, I don't.

How China is Driving the Gold Price

How China is Driving the Gold Price
by DR. ALEX COWIE on 16 APRIL 2012
It was a perfect sunny autumnal day in Melbourne yesterday.

Conditions were perfect for a barbie. So in honour of my sister visiting from England, we laid on a spread at Cowie HQ yesterday afternoon.

There was a mix of poms, pommie ex-pats, and true-blue Aussies in my backyard, and the talk quickly turned to sport. Someone might have said something about a certain urn being back at a certain cricket ground. The Aussie reply was that ‘well we got our own back by sending Warnie in to sort out Liz Hurley, mate’. Fair point.

Then we got onto just how expensive it is for Brits to come over here now.


Ten years ago, a pound sterling bought about $3s. Now it buys just $1.50. The Aussie has doubled in that time. Not just that but the higher cost of living makes it more unaffordable for visitors. So, if you see a hungry looking backpacker walking around Melbourne today, it might be my sister, so please offer to buy her some lunch!

How China is Using Gold to Internationalise

Around the time we were chatting about the exorbitant Aussie dollar, China announced it would increase the trading range on its currency, the renminbi, from 0.5% to 1.0%. This means the currency has more scope to rise and fall in response to economic forces.

It has been a long five year wait since China last relaxed the trading band. The reason this is such a big deal is this is a big step towards the renminbi (RMB) becoming a floating currency like the Aussie, euro or yen. This is an essential step if China wants to ‘internationalise’ its currency.

China has been building the foundations for the RMB’s use internationally over the last few years. The latest milestone has the China Development Bank planning to offer loans in renminbi to the other BRIC countries, Brazil, Russia, India – as well as South Africa.

Having an international currency promotes trade, cutting the US dollar out of the equation. The ultimate goal may be to pitch the renminbi as a reserve currency to compete with – or displace – the US dollar.

To really sell the RMB as an international currency, it helps if it is backed with a significant amount of gold. China would never openly admit this, but a snippet from an embassy in China, via a wikileaks story, as good as confirmed it last month:

“The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold’s function as an international reserve currency. They don’t want to see other countries turning to gold reserves instead of the U.S. dollar or Euro.
Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar’s role as the international reserve currency. China’s increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB.“

China has long been the world’s biggest gold producer, with all of this gold staying within its borders. China is now adding to this with huge gold purchases on the international market. Every time the price dips, as it is now, China buys dozens of tonnes of gold. Chinese buying started in earnest halfway through last year. At the current rate, China will overtake India as the world’s biggest gold consumer.

Chinese gold imports – now the biggest driver of the gold price


Source: Reuters

With China buying on the dips in a big way, it will be hard for the gold price to fall far. So why isn’t it soaring? India is the other big gold importer, and a few factors have slowed gold buying down there.

Last year India imported 969 tonnes of gold (roughly 20% of total gold imports in 2011).

But Indian gold imports slowed down towards the end of last year.

The main reason for this slowdown is that the value of the Indian currency, the rupee, fell 17%. This effectively added 17% to the price of gold for Indian buyers. And because the gold price was rising at the time, it meant Indian buyers had to pay as much as 35% more for gold in the second half of last year. Imports fell as Indians waited for the price to come back to a more affordable level.

Falling rupee made gold too pricey for the world’s biggest gold importers

Click here to enlarge

Source: stockcharts, D&D edits

Looking at this chart, you can see that after falling for the last four months of 2011, the gold price in rupees has now come back to its long-term trend. This is partly thanks to the rupee rising by 6% this year. This should help more Indian gold buyers come back into the market, and increase imports again.

Keep An Eye on Gold Buying by India

There is another reason Indian gold imports should increase from here. Indian jewellers have just finished a three-week-long strike in protest of a new 4% tax on most gold jewellery. So for nearly three weeks, they all shut up shop until the government agreed to back down. For most of March, the world’s biggest army of gold buyers had nowhere to buy gold. Imports into the country all but stopped. Now they have re-opened, there is three-weeks-worth of buying to catch up on.

With this latent buying hitting the market, and the Indian gold price falling back to trend, we should see Indian gold imports rise. And with the world’s biggest consumer back in the game, the gold price should start to recover.

I heard over the weekend that India has already come back into the physical market in size. Even if Indian demand doesn’t recover straight away, this is an opportunity for China to pick up what India can’t afford.

In the Market for Gold Mines?

I think what China will need to do to step up its gold purchases, and secure future supply at a good price, is buy gold mines around the world.

This has started happening.

Late last year, China Gold International Resources Corporation, one of China’s largest gold producers, acquired a mine in Central Asia, and now might pick up more in Canada and Mongolia.

A Shanghai-based group has since picked up a controlling interest in an Eritrean gold project, Zara Mining.

And just last week, Zijin Mining Group made a bid for an Aussie gold stock, Norton Goldfields (ASX:NGF). This is a 150,000-ounce-a-year producer with plans to increase production to 220,000 ounces over the next four years. You can expect to see a lot more of this, if China wants to seriously ramp up its gold reserves.

A serious move by China to increase gold reserves by acquiring projects is great for gold investors. Firstly, speculation over takeovers can often give share prices a nudge.

More importantly, because these mines have a long mine life, it tells investors China’s plans to buy gold take a long-term view.

China Builds its Gold Reserves

China has been busy, but its official gold reserves are only worth US$55 billion. The core Euro countries of Germany, Italy and France have around US$430 billion of gold, and the US claims to have US$424 billion of gold.

But it’s been three long years since the People’s Bank of China last updated us on its gold holdings in 2009, when the count was 1054 tonnes. This was almost double the gold it had when it reported before that in 2003. We can safely assume China has been adding to its official reserves in the last three years. It’s anyone’s guess how much by.

If the amount of gold the Euro nations and the US government have on their books is any guide, you can see that China needs eight times more gold than it last reported to confidently back its currency for internationalisation. That would take the world’s entire annual mine output for at least three years.

This makes Chinese gold demand the most important of all the gold price drivers, and a very good reason to be bullish on gold long term.

That’s why I read yesterday’s news – that China has made another important step towards internationalising its currency – as being a very bullish result for the long-term gold price outlook.

China’s gold demand should support higher gold prices, but it’s not all good news for gold bugs. China’s growth also means a growing military power. And this may pose a threat to some of the gold producing countries close to its borders that Aussie gold producers are operating in.

Over the next four years, China’s military budget will grow to almost half that of America’s. There is growing geopolitical chess game playing out between the two. With the arrival of US marines in Darwin, it is a game that Australia is firmly part of.

What this means for investors is a story for tomorrow.

Dr. Alex Cowie
Editor, Diggers & Drillers

Tips for selling gold jewelry for cash

Have you grandmother told you on how important to own gold especially when you are in need of cash.Well I have been told over and over again by my grandmother about it.I grow up in an ordinary Malaysian family and my grandmother was a child of before our country got independence.So she had known hardship longer than I do.It was popular among people of her time to keep gold jewelry for back up during the hard time.Well,that does not change much until today.
In this post I would like to share some tips on selling your gold jewelry for cash.Our customers sell their gold for all kinds of reasons, many needing cash quickly. It has been a growing trend fueled by high unemployment, rising gold prices, the liquidity of gold.

First, people selling gold or silver jewelry should know how the buying price is arrived at. The value of gold or silver jewelry is based on the precious metal content, not the value as a piece of fine jewelry. Buyers evaluate the price considering the melt value and the current market conditions. When selling gold, the purity and content of the gold (10- Karat, 14- Karat, 24- Karat, etc) and the weight of the gold is also taken into account.
Next,if you just bought the gold and you find that selling it won't give you a satisfactory return then visit the pawn shop.

This is how pawnshop work
-You bring in something you own and give it to the pawnbroker as collateral for a loan (this act is called pawning).
-The pawnbroker loans you money against that collateral.
-When you repay the loan plus the interest, you get your collateral back.
-If you don't repay the loan, the pawnbroker keeps the collateral.

Try to get back your collateral(gold) within the agreed time so that you won't lose your ownership.By that time the price of your gold already increase its time to sell it and gain profit.

At MQG we offer a reasonable buy and sell price to our customer which mean we offer attractive spread for gold traders.

With all that I wish you gold lover all the best

Regads Nurul Ashikin Othman
Manager
Sales and Marketing
MalQish Gold Sdn Bhd

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Gold Eases Back Near $1,700

(RTTNews.com) - The price of gold was moving lower for the first time in four sessions Monday morning amid a generally strong U.S. dollar.

Gold for April delivery, the most actively traded contract, lost $6.80 to $1,704.70 an ounce. Last week, gold ended flat on global cues as positive U.S. employment report lifted commodities and equity markets. Gold prices during the week were impacted by inflation concerns on a new bond buying program reportedly being considered by the U.S Federal Reserve.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 1,293.68 tons.

This morning, the U.S. dollar moved back near a monthly high versus the euro and sterling, while ticking lower against the Swiss franc and the yen.

The euro fell against the dollar and yen in Asian trading as Fitch Ratings downgraded Greece to 'restricted default' and the International Swaps and Derivatives Association panel resolved unanimously that a Restructuring Credit Event has occurred with respect to Greece

In economic news, German wholesale price annual inflation slowed as expected to 2.6 percent in February from 3 percent in January, the Federal Statistical Office said. On a monthly basis, wholesale prices climbed only 1 percent after rising 1.2 percent in January. The rate matched consensus forecast.

Elsewhere, the price of silver edged down, while platinum was ticking higher in morning deals.

sources(www.nasdaq.com)

PRECIOUS METALS

Gold and silver traded within a narrow range while palladium and platinum finished the week on a flat note.

“The gold market continues to swing back and forth with the broader market as rising concerns over the this Greek bailout weighed on sentiment,” said VTB Capital analyst Andrey Kryuchenkov.

Meanwhile, the World Gold Council (WGC) forecast that China is set to overtake India as the world's largest gold buyer this year as demand for the metal for jewellery and as a safe-haven investment surges.

Global demand hit 4,067.1 tonnes in 2011 - edging up 0.4% year-on-year - worth an estimated US$205.5bil, the first time demand has surpassed US$200bil, the WGC said in its latest annual report.

India, the largest gold consumer and importer, saw a 7.0% decline in demand year-on-year to 933.4 tonnes last year, while demand from China jumped 20.0% to 769.8 tonnes in the same period.

By late Friday on the London Bullion Market, gold firmed to US$1,723 an ounce from US$1,711.50 the previous week.

Silver eased to US$33.48 an ounce from US$33.55.

On the London Platinum and Palladium Market, platinum was unchanged at US$1,638 an ounce from US$1,638.

Palladium declined to US$697 an ounce from US$697. - AFP-

Gold price set to go up to US$2,000 by mid-year

GEORGE TOWN: The Gold Bullion Entrepreneurs Association of Malaysia (GBEAM) expects gold price to hit US$2,000 per ounce by mid-year from the current US$1,733 per ounce as the weakening global economy would drive more funds to safe-haven investments such as gold.

GBEAM secretary-general Datuk Joseph Kow said in an interview that from now till March, the price of gold should increase between 5% to 8%.

“We expect gold trading to pick up in the second quarter 2012,” he said.


Due to the Chinese New Year holidays and shorter working days, gold trading is expected to be slower in the first quarter,” Kow added.

Kow added that GBEAM would announce the recommended selling price of gold twice daily to its 4,000 members soon.

“Because gold prices fluctuate every minute, it is necessary to make the announcement a twice-daily routine.

“This will also give our members a clearer picture of the international gold trading market,” he said.

The recommended selling price of gold usually hovers between 22% to 25% of the market price, which would cover labour and operational costs and currency adjustment factors,” he said.

At present, GBEAM announces the recommended selling price of gold via SMS once daily.

Kow said GBEAM's objective was to promote gold bullion trading to the Malaysians and emphasise the importance of gold investment as a hedge against inflation.

“Gold is generally perceived as money that is universally accepted like a currency,” he added.

An OCBC Bank report last month forecast that gold prices would target around US$1,800 per ounce by end-2012.

The upward trend of gold prices would continue into 2012, largely driven by the negative real-interest-rate environment as central banks were expected to cut interest rates or keep them at historical lows to support growth, it said.

“In 2011, gold purchases made by central banks were seven times higher than 2010, and this sets a bullish tone for gold as the bullion is increasingly being viewed as a store of value by both investors and global authorities, “the report said.

“As such, we believe gold prices to target US$1,800 per ounce by end-2012,” it added.