The Moneychanger
Daily Commentary
Wednesday, 26 October a.d. 2011 Browse the commentary archive

Dow resistance at 11,900 remained undefeated today, but support at 11,700 held up, too. This tells us little, and could mark the beginning of a downtrend if a higher closed dows not violate the last two day's double top.

I glanced at the Dow In Gold Dollars (DiG$) chart to check stocks' progress against gold. Short answer is, ain't none. Rallied off that August low about G$119 (5.757 oz) as high as G$151 (7.283 oz) two days ago. Why is that no progress? Well, it's correcting a fall from G$165 - $160 level, and yesterday it gapped down, and followed through downside today. Plain message? Stocks are headed DOWN against gold. Today $142,42 (6.89 oz).

Dow in Silver Ounces chart differs substantially, as it rose all the way from its August lows to its July highs -- in other words, retraced the entire fall. No surprise there, since volatile silver loses much more ground in a downward move than gold does. Closed today at 356.32 ounces to buy the Dow.

Looks like the Dow has near about run out of gas. Next big move will point toward the earth's core.

Sell stocks for gold. Sell stocks for gold. Sell stocks for gold. Don't want to do that? Sell stocks for silver.

For most of the past three days the US dollar index has traded between 76 and 76.5, and more narrowly between 76 and 76.20. Half way thru today's 24 hours somebody knocked it down in a spike to 76.88, then it popped straight up to 76.66 & settled above 76.20 at 76.231, up 10.9 basis points (0.14%).

No change, except that blip up today makes it appear those last 2-1/2 days were a bottom, & the dollar's about to move higher.

Euro's five day chart looks like a plateau that it fell off of today. At today's close it stood at 1.3903, up mightily from 1.3902 yesterday. Trading was more volatile, but no big warning of change appeared. Eurocrats have as yet no "solution" to their bank solvency crisis. Don't expect one, either.

The Nice Government Men from the Bank of Japan have a problem on their hands. Yen backed off a smidge today, 0,.25% to 131.14 (Y76.25), but it has broken out to the upside. Needs to fall back below 130.50 (76.62) to disprove that breakout.

Building on yesterday's 2.9% gain, gold added another 1.4% ($23.10) today to close $1,722.70 on Comex, nestled right beneath that $1,725 resistance.

Perched above gold at $1,741.49 is the 50 day moving average, which will slow it down. However, today's close definitely breaks gold out above the upward sloping trading channel boundary in force since end-September.

As strong as gold looks, it will probably run higher than $1,750 before the rocket fuel runs out -- maybe $1,775. Once again, if gold does close above $1,800 for two days, then it has already left the starting gate for the next race up.

Silver knocked and pounded at 3400c today, even reached 3393, but couldn't break down the door. Daily chart has sketched a long, narrow triangle. Generally the further out into the triangle's nose a market trades, the less spectacular the eventual breakout. However, silver has been so strong -- rising 303.1c since 20 October -- that breaking thru 3400c might sling it a long way.

How far? The 50 DMA (3643c) and the 200 DMA (3625) are about to cross, so I expect right there above 3600c silver will land in mud and alligators up to its hips.

Silver & gold will keep on moving higher tomorrow.

On 26 October 1825 the Eire Canal opened, connecting Lake Erie to New York City by way of the Hudson River. The canal was the first great public works project in the United States (an "internal improvement", i.e., subsidy to business, a favorite project of the Whigs who later became the Republicans who later became the Democrats & who today are indistinguishable one from the other), completed at a cost of $7.602 million (367,747 oz of gold, or, corrected for inflation, $306.6 million today).

For all the goofy grade school songs about your mule named Sal working on the Canal, I believe I have read SOMEWHERE that the canal never actually paid for itself. Now there's a surprise. A government works project that cost more than its worth! Next thing I know, y'all are going to tell me that TVA wasn't worth it either, or the interstate system, or -- heaven forefend! -- public education.

On 26 October 1860 Italian revolutionary & secret society (Carbonari) leader Giuseppe Garibaldi proclaimed Victor Emmanuel (King of Sardinia) King of Italy. This would end in the unification of the diverse peoples of the Italian peninsula being united under one state.

On 26 October 1905 Sweden & Norway ended their union (without a war, very civil!) and Oscar II, King of Norway, abdicated. I think he's the one whose picture is on the sardine cans, but that might be Oscar the first.

MILESTONES OF GOVERNMENT SCIENCE: On 26 October 1955 the US Air Force officially proclaimed that there is no such thing as flying saucers. I heard that! Y'all stop that snickering.

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

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
26-Oct-11 Price Change % Change
Gold, $/oz 1,722.70 23.10 1.4
Silver, $/oz 33.29 0.26 0.8
Gold/Silver Ratio 51.750 0.297 0.6
Silver/Gold Ratio 0.0193 -0.0001 -0.6
Platinum 1,591.70 25.70 1.6
Palladium 646.15 4.60 0.7
S&P 500 1,242.00 12.95 1.1
Dow 11,869.04 162.42 1.4
Dow in GOLD $s 142.42 0.05 0.0
Dow in GOLD oz 6.89 0.00 0.0
Dow in SILVER oz 356.52 2.14 0.6
US Dollar Index 76.23 0.11 0.1
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: 1,722.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,766.87 1,782.87 1,782.87
1/2 AE 0.50 883.44 904.10 1,808.21
1/4 AE 0.25 444.52 456.36 1,825.43
1/10 AE 0.10 184.26 191.15 1,911.53
Aust. 100 corona 0.98 1,676.19 1,691.19 1,725.35
British sovereign 0.24 405.38 412.38 1,751.84
French 20 franc 0.19 321.52 328.52 1,759.59
Krugerrand 1.00 1,735.88 1,751.88 1,751.88
Maple Leaf 1.00 1,734.10 1,755.10 1,755.10
1/2 Maple Leaf 0.50 901.95 912.71 1,825.43
1/4 Maple Leaf 0.25 452.05 456.36 1,825.43
1/10 Maple Leaf 0.10 175.65 198.04 1,980.42
Mexican 50 peso 1.21 2,061.63 2,078.63 1,724.00
.9999 bar 1.00 1,728.13 1,739.13 1,739.13
SPOT SILVER: 33.33      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25,500.00 28,000.00 36.60
VG+ Peace dollar 0.77 25,000.00 27,000.00 35.29
90% silver coin bags 0.72 23,469.88 23,919.88 33.45
US 40% silver 1/2s 0.30 9,240.88 9,540.88 32.34
100 oz .999 bar 100.00 3,357.50 3,417.50 34.18
10 oz .999 bar 10.00 333.25 339.25 33.93
1 oz .999 round 1.00 33.43 34.18 34.18
Am Eagle, 200 oz Min 1.00 35.08 36.08 36.08
SPOT PLATINUM: 1,591.70      
Plat. Am Eagle 1.00 1,591.70 1,691.70 1,691.70
Home Questions & Answers Articles & Resources
The Moneychanger, P.O. Box 178, Westpoint, TN 38486

Copyright Notice

© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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.

Other Important Information

This is not an offer to buy or sell. Prices subject to change without notice. To enter an order, call us at (888) 218-9226 or (931) 766-6066. Sorry, no sales to Tennessee.

For complete details on how to buy from us or sell to us, please click here.