The Moneychanger
Daily Commentary
Thursday, 6 October a.d. 2011 Browse the commentary archive

Today stocks, gold, & silver built on bottoms struck on Tuesday and Wednesday. Dollar stumbled again.

Having finished the first leg of a rally, the Dollar Index is correcting. Right now its trading 78.526, down 39.3 basis points or 0.51%. None of this clouds the dollar's rally picture. It's quite overbought, so is experiencing merely a routine correction It will come back, doubt it not.

Nothing has changed on the euro's chart, although today it rose 0.68% to 1.3438. Still looks sorry as gully dirt, but may rally to the 20 dma, now 1.3564, or to 1.3800, the bottom line of the trading channel it broke down from.

Around the globe the Japanese yen still has made no decision and continues dancing sideways with its 20 dma. Closed today at 130.49c/Y100 (Y76.63/$1), up 0.17%

Gold added $11.60 to yesterday's Comex close to settle the day at $1,651.90. Back on 3 October gold closed $1,655, only to fall off the next day. That $1,655 area is the resistance to beat right now. Gold will likely pierce that tomorrow and push toward the next barrier at $1,675.

At $1,675 gold will meet the top boundary of the flag it has formed since 26 September, AND it will run head on into the downtrend line from the September $1,923.70 peak. If gold can break through that strong resistance, it could rise to $1,725 very quickly, scattering the shorts like quail in an open field, and yet fall back once again.

I am still not satisfied gold has done sufficient penance. We may see lower lows yet.

Silver is showing tighter and tighter supply, with wholesalers quoting delays now even on US 90% silver coin. That certainly implies higher prices, but I could write off silver's gain today -- up 165.3c to close Comex at 3197c) -- as merely a rally to the top of the flag it has formed. Breaking through 3100c earns my respect, but can silver break 3350c? I know, I know, it sounds like I'm constantly moving the goal line back, but in truth nothing has happened until silver beats 3350c, and pushes up to 3900c. In it favor, however, are tightening supplies & rising premiums, and a most overbought condition in the RSI and MACD.

Silver & gold remain in a correction in an on-going primary uptrend (bull market). More downside is likely before the correction ends. I may be wrong as a tuxedo at a cockfight, but I reporting what I see.

On 6 October 1536 Anglican priest William Tyndale, having been captured at Antwerp, was tried, strangled, and burnt at the stake for translating large parts of the Bible into English. Printing the Bible in the people's own language was accounted a crime to church & state. To give an idea how well Tyndale worked, it's estimated that the Authorized or King James Version is 83% Tyndale's in the New Testament, and 76% his in the Old Testament. Before he died, he cried out with a loud voice, "Lord! Open the King of England's eyes!" Within four years, at the order of the same king, four English Bible translations were published in England, all based on Tyndale's work.

It takes a lot to make me mad, but some things light my fuse so quick you'd think I had TNT in my bloodstream, and one of 'em is people preaching and preening about how "scientists" are so objective and rational. Why, they're as big a bunch of crooks as any politician that ever breathed, they just posture better. If you need proof of that, just investigate the global warming hoax or modern medicine. Sure, there are plenty of honest scientists with integrity, but there are loads of liars & place-servers, too. Putting a white lab coat on a man no more gives him integrity than putting a black gown or cope & miter on him.

Here's my supporting argument, a small example. No act in the United States can get you indicted quicker than discovering some treatment REALLY effective against cancer. You may be forgiven any crime or sin, but the "scientists" in the medical establishment will hound you to the gates of hell for curing cancer.

What touched off my fuse? Somebody sent me this quotation today, from whence I know not but signed by somebody named "Bart", who clearly liveth yet under the ether of scientism:

"I think we commented three weeks ago that Steve Jobs was this USA generation's Henry Ford. No one survives pancreatic cancer. At least not yet. To the extent that science prevails over religious fundamentalism and its prejudices biases and fears (and we're talking about stem cell research here, as well as about potential cancer treatments blocked or stalled by the FDA, which needs to be abolished or transformed) we will move fwd."

Clearly this utterly ignorant person has never heard of Dr. Donald Kelley, the genius from Texas in the 1960s who cured HIMSELF of pancreatic cancer by supplements, diet, and cleansing regimes. Clearly he doesn't know that it wasn't any "fundamentalism" that persecuted Kelley until he died in 2003, but the medical establishment and "scientific" US government. Clearly he doesn't know that Kelley's treatment shows positive results in nearly 70% of cases, according to actual clinical experience. Steve Jobs, I have heard, suffered the standard "cut, burn, poison" of standard medical treatment, and it didn't work, poor man. I heartily recommend that those of you not yet brainwashed by the religion of Scientism check out my interview with Dr. Nicholas Gonzalez about the Kelley therapy, http://www.the-moneychanger.com/articles_files/health/dr_nicholas_gonzalez.phtml. I'm not recommending this or any other treatment for cancer, because I'm not a physician. Just read the information, and draw your own conclusions, at your own risk.

And Kelley is not the only example I can bring forward. Time would fail me to tell of Beard, Rife, Evers, Burzynski, and hundreds of others crucified by "scientists" for maintaining the truth.

The religion of scientism has blocked more technological and scientific advancement than all the fundamentalists in the United States & Antarctica piled in a heap, and don't you forget it.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

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Market Snapshot See more charts and market data
6-Oct-11 Price Change % Change
Gold, $/oz 1,651.90 11.60 0.7
Silver, $/oz 31.97 1.65 5.5
Gold/Silver Ratio 51.670 -2.435 -4.5
Silver/Gold Ratio 0.0194 0.0009 4.7
Platinum 1,515.60 19.60 1.3
Palladium 606.50 29.50 5.1
S&P 500 1,164.97 20.94 1.8
Dow 11,123.33 183.38 1.7
Dow in GOLD $s 139.20 1.34 1.0
Dow in GOLD oz 6.73 0.06 1.0
Dow in SILVER oz 347.93 -12.92 -3.6
US Dollar Index 78.53 -0.39 -0.5
IMPORTANT NOTE: The following are wholesale, not retail, prices. To figure our retail selling price, multiply the "ask" price by 1.035. To figure our retail buying price, multiple the "bid" price by 0.97. Lower commissions apply to larger orders, higher commissions to very small orders.
SPOT GOLD: 1,650.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,700.12 1,716.12 1,716.12
1/2 AE 0.50 846.76 866.57 1,733.13
1/4 AE 0.25 426.06 437.41 1,749.64
1/10 AE 0.10 176.61 183.22 1,832.17
Aust. 100 corona 0.98 1,606.59 1,621.59 1,654.35
British sovereign 0.24 388.55 395.55 1,680.34
French 20 franc 0.19 308.17 315.17 1,688.09
Krugerrand 1.00 1,665.46 1,681.46 1,681.46
Maple Leaf 1.00 1,665.60 1,683.60 1,683.60
1/2 Maple Leaf 0.50 864.50 874.82 1,749.64
1/4 Maple Leaf 0.25 433.28 437.41 1,749.64
1/10 Maple Leaf 0.10 168.36 189.82 1,898.19
Mexican 50 peso 1.21 1,976.03 1,993.03 1,653.01
.9999 bar 1.00 1,656.38 1,667.38 1,667.38
SPOT SILVER: 31.99      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 33,000.00 34,500.00 45.10
VG+ Peace dollar 0.77 31,500.00 33,000.00 43.14
90% silver coin bags 0.72 22,440.28 23,240.28 32.50
US 40% silver 1/2s 0.30 8,845.58 9,145.58 31.00
100 oz .999 bar 100.00 3,223.50 3,273.50 32.74
10 oz .999 bar 10.00 319.85 325.85 32.59
1 oz .999 round 1.00 32.09 32.99 32.99
Am Eagle, 200 oz Min 1.00 33.74 34.64 34.64
SPOT PLATINUM: 1,515.60      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Am Eagle 1.00 1,515.60 1,615.60 1,615.60
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Warnings and Disclaimers

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 trend is up, targeting 16:1 gold/silver ratio or $195.66; stock's primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 16 ounces of silver. US$ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.

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 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. For additional information, please see our Ten Commandments for Buying Gold and Silver.
  • One final warning: NEVER insert a 747 Jumbo Jet up your nose.

Explanation of Terms

The US DOLLAR INDEX is the average exchange rate for the US dollar against the Euro, Yen, Pound sterling, Canadian Dollar, Swiss Franc, and Swedish Krona, weighted for each country's trade with the US. It gives a general measure of the US dollar's performance against all other currencies.

The DOW IN GOLD DOLLARS measures the Dow Jones Industrial Average in gold dollars (0.048375 troy oz. by law). The DiG$ depicts the Primary (20 year) Trend of stocks against gold. When the DiG$ is dropping, gold is gaining value against stocks in a trend that should last 15-20 years. The DiG$'s chart is identical to the Dow in ounces of gold, but gives us one unvarying measure all the way back to 1896. Because it shows the primary trend ("tide") of gold against stocks, for investors it is the single most important financial chart in the world today. Since its August 1999 high at G$925.42 (44.8 ounces), the DiG$ has trended down, targeting a G$80-G$20 (4-1 oz. of gold will buy the whole Dow).

The DOW IN SILVER OUNCES shows how many ounces of silver are needed to buy the entire Dow. The DiSoz is trending down with a target of under 36 ounces.

The GOLD/SILVER RATIO is the gold price divided by the silver price, and shows how many ounces of silver it takes to buy one ounce of gold. The Ratio shows us the Primary (20 year) Trend of gold's value against silver. When the Ratio's trend is dropping, silver is gaining value against gold. This trend targets a gold/silver ratio of 16 ounces of silver to one of gold within the next 5-10 years. That implies that silver will massively, vastly outperform gold before this bull market ends. When both metals are rallying, the ratio often (but not always) drops, confirming the rally.

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