The Moneychanger
Daily Commentary
Tuesday, 17 April a.d. 2012 Browse the commentary archive

Nothing makes me as edgy as watching flat markets, knowing that pressure is building up somewhere that won't blow off until its ready. Some blew today, some stayed flat.

Stocks jumped straight up. Yesterday I said the Dow needed to pierce 13,000 or 'would crumple, & it must have heard me. Rose 194.13 (1.5%) to close at 13,115.54. S&P 500 kept pace today, rising 21.21 (1.55%) to 1,390.78.

Y'all will think this is merely my bias speaking, but regardless, look for a very short, sharp rise in stocks, maybe to the last high at 13,297, maybe over 1,400 for the S&P500. Following this speedy rise, stocks will step into a laundry chute that leads to Dow 12,500 or lower.

Flat currency markets bother me. NGM are up to something, maybe for the International Monetary Fund meeting this weekend. Scabby dollar went no place today, up 2 basis points to 79.563. Sorry euro closed $1.3129 versus yesterday's 1.3136. These are not differences big enough to see, much less change anything. Scruffy yen backed off 0.62% to 123.62c (Y80.89/US$1), but remains above its 50 day moving average, so momentum should carry it higher. However, that 124 level has very strong magnetism.

I reckon if you only looked at the closes & change for the day you'd call gold's $1.60 gain today a triflin' nuisance. You'd be wrong.

Today gold made a new low for the move, $1,634.88. In overnight trading gold climbed to $1,556.40, then about 9:30 New York time somebody big tried to slap the fool out of gold. Drove it down to $1,634.88 by 10:00, but didn't reckon with gold's ability to snap back. As quickly as it had fallen or even more quickly, gold bounded back to the day's high, then settled down to scoot along $1,650 the rest of the day. Comex closed up $1.60 at $1,650.30, but that didn't tell much of a story. Aftermarket is holding on above $1,650.

Caption here is, "Out of weakness, strength." Unless gold closes below today's low, it is out of danger.

Silver also suffered an early morning attack, but its five day chart doesn't quite match gold's. Rather, silver made a low early Monday at 3116c, then climbed, and edged off the balance of the day. Started today around 3130c in Europe & reached 3180c before New York opened. Next the Attacker struck, driving silver down to 3133.2, & it recovered just as quickly as gold. Comex closed up 30.1c to 3166.5c. This leaves a distinctly bottomy look behind.

To maintain that bottom, silver needs to remain above 3130c tomorrow. Crucial mark to defend remains 3100c.

I'm afraid too many of y'all are listening to the Grade B hogwash coming out of Washington, & coming to believe it. Financial troubles have not been cured, only papered over. This silver & gold correction has just about ended. Hide & watch.

On this day in 1865 Mary Surratt was arrested as a conspirator in Lincoln's assassination. In the scorched earth pattern that would characterize many other US assassinations & blow-ups, Surratt & the other alleged conspirators where rushed through a kangaroo military court and hanged before they could get used to the mattresses in their jail cells. Barn where booth was cornered was burned with him alive in it, and some soldier "without orders" shot him. Oddly enough, Booth had been keeping a diary in which he wrote about his plans to assassinate Lincoln.

Nobody bothered to ask whether Lincoln was worth more dead than alive to the Red Republicans, & whether some one else might have had reason to murder him. No need to, that is, after all the "perpetrators" had already been burned, shot, or hanged.

Here's something for y'all in Virginia I don't usually do. Talked to Karen Kwiatkowski (Ka-tao-skee) who is running for the 6th US congressional district seat (think Shenandoah Valley). She retired from the US Air Force as a Lt. Colonel & writes on www.lewrockwell.com, so I checked out her positions on the issues. I have to say it looks like we agree 95% (although I retired from the Army after two years as a Spec-4). Most of all, she and her husband are farmers, & she understands the need for clean, local food. She understands the need for human liberty, & how the federal government is squelching it. Given how utterly execrable most congressional candidates are, I was astonished to see Karen's principles. She deserves supporting. See KarenKforCongress.com.

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
17-Apr-12 Price Change % Change
Gold, $/oz 1,650.30 1.60 0.10%
Silver, $/oz 31.67 0.30 0.96%
Gold/Silver Ratio 52.117 -0.449 -0.85%
Silver/Gold Ratio 0.0192 0.0002 0.86%
Platinum 1,581.80 8.60 0.55%
Palladium 663.00 10.95 1.68%
S&P 500 1,390.78 21.21 1.55%
Dow 13,115.54 194.13 1.50%
Dow in GOLD $s 164.29 2.29 1.41%
Dow in GOLD oz 7.95 0.11 1.41%
Dow in SILVER oz 414.20 2.21 0.54%
US Dollar Index 79.56 0.02 0.03%
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: 1,650.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,687.12 1,703.12 1,703.12
1/2 AE 0.50 833.65 866.67 1,733.34
1/4 AE 0.25 420.95 437.46 1,749.85
1/10 AE 0.10 174.98 183.24 1,832.39
Aust. 100 corona 0.98 1,606.79 1,621.79 1,654.55
British sovereign 0.24 388.60 395.60 1,680.54
French 20 franc 0.19 308.20 315.20 1,688.29
Krugerrand 1.00 1,654.10 1,670.10 1,670.10
Maple Leaf 1.00 1,662.80 1,683.80 1,683.80
1/2 Maple Leaf 0.50 817.15 858.42 1,716.83
1/4 Maple Leaf 0.25 408.57 437.46 1,749.85
1/10 Maple Leaf 0.10 163.43 178.29 1,782.86
Mexican 50 peso 1.21 1,974.28 1,991.28 1,651.56
.9999 bar 1.00 1,656.58 1,667.58 1,667.58
SPOT SILVER: 31.70      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26,512.91 29,000.00 37.91
VG+ Peace dollar 0.77 25,512.91 28,000.00 36.60
90% silver coin bags 0.72 22,089.93 22,339.93 31.24
US 40% silver 1/2s 0.30 8,878.03 9,053.03 30.69
100 oz .999 bar 100.00 3,194.50 3,234.50 32.35
10 oz .999 bar 10.00 319.45 323.45 32.35
1 oz .999 round 1.00 31.95 32.55 32.55
Am Eagle, 200 oz Min 1.00 33.30 34.00 34.00
SPOT PLATINUM: 1,581.80      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,606.80 1,649.80 1,649.80
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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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