$1200 stop hunts on gold twice with no momentum

Gold was pushed under $1200 US twice to end the week, neither time stuck.

With two efforts at igniting momentum at $1200 and options expiration, $1200 looks like a nice entry point for gold.  If you see $1180 - $1170 maybe time to reconsider if you are a short term paper player.

Here is a spreadsheet on Google Docs that has the price of gold and silver and the gold silver ratio.  It also has some quick calculations for 90% gold and silver and 40% silver.  Might help some people next time they are at their Local Coin Shop (LCS).

Gold gives up $1200

So gold is around 1199 and change today.  1200 is a nice round number.

The 1180's were the lows for quite some time now.

If we see 1170's, I would anticipate giving up 1100 shortly thereafter (like within a month or two).

Me, I am not buying any gold right now unless it were something special.  I like graded and certified gold in low MS state for just above melt.  I do cap those purchases at melt plus 25% though so I don't stray too hard into a less than liquid coin.

GSR (Gold to Silver Ratio) is sitting at 73.7 ounces of silver for one ounce of gold.

You basically never see the 80's in this ratio and when you do it is a great time to swap out gold for silver.  Me, I won't be doing that at all.  I would swap into gold and just hold gold.  Gold is wealth.  Silver is currency.  At least they used to be before money literally started growing on trees.

To me you don't swap when the GSR gets high, you just stop buying gold and double down on silver.  When the ratio gets low again, at least in the 50's or better the 40's, then swap that silver out for gold.

Silver Monkey Hammered

Silver with a major move down.  Cruising through $17 we are down a full dollar into the $16.30's.

Looks like energy deflation is spreading into other commodities, even the monetary ones.

I gotta think this oil head fake is about out of time and we will see the 40's if not 30's and 20's on oil.  If you saw similar crashes in the metals, yikes for the stackers. Really wanting to see the oil / energy stocks get whacked on price.  If energy stays down, the stocks need to lose 30 - 60% of their share price and that is when I would look to buy in.

As for gold and silver,I am not a market timer and like to buy small amounts often.  When it is down, I just get more coins for the budget.  When it is up, I get less coins for my dollar.  When it is way up, I enjoy the classic US copper coins the most.  Love them large cents and two cent pieces.

I vary it up with gold and silver too.  Generally using the Gold to Silver Ratio (GSR).  Lately the GSR has been high so I have been buying more silver relatively.  I would never swap gold for silver so there is no price I am coming off my gold in exchange for silver, other asset classes perhaps, but not the same asset class.  If the GSR were to get low, say 40 - 50, maybe even 55, I would trade much of my silver for gold.

I also mix it up in quality.  When prices are low, I tend to buy junk silver or gold coins closer to melt.  When the cost is up, I tend to look more at the higher end coins.  Anything can catch my eye while coin shopping, but I try and get the most bang for my buck.

Classic US Gold Coin Grading Images

Just wanted to feature two great resources for collectors.

This first one is for grading coins.  PCGS Photograde.

Images of every US coin in every grade possible.  Great detail.  A go to resource for quick coin grading comparisons.


The next one is for gold in particular.  Doug Winter has a collection of images of graded gold coins that he has bought and sold over the years along with the grades.  Great way to get a feel for grading gold coins.

Here is Douglas Winters' Rare Gold Coins.  Must see for collectors of classic US gold coins.