That's it. Silver & gold might once bend backward again toward their lows, but evidently the lows were posted yesterday. More about that below.

The euro continues to crumble before the US dollar. The Dollar index today rose another 17.4 basis points (0.22%) to end at 81.516. First barrier to further rise appears at 81.78, the January high. Euro lost 0.18% today to close at $1.2692, not far from the January low at $1.2609. Monstrously oversold, so watch out for a sudden rally. The NGM like to snare currency traders that way.

Making good on the promise of that head & shoulders that's been forming since January, the Dow today sliced through its neckline to lose 156.06 (1.24%) and ended at 12,442.49. (S&P lost 19.94 or 1.51% to 1,304.86. It has lost 100 points in ten days.)

Yesterday the Dow in Gold dollars, which has been forming a diamond, well, really a megaphone, yesterday made a marginal new high at G$169.53 (8.201 oz) and today crumpled to G$163.36 (7.903 oz). Dow in silver ounces plunged from 463.69 oz yesterday to 444.44 oz today. Both have topped. That's your turn of metals against stocks. They have unlatched themselves from stocks, & from currencies, too.

That silver & gold strength in the face of a blooming dollar and withering euro loudly confirms metals' strength. But internally metals also looked good.

Gold rose 38.30 (up 2.5%) to end at $1,574.50. It left behind a double bottom on Wednesday at $1,527.7 and worked its way up to $1,550. In Europe it danced just under $1,550, then at 8:00 a.m. jumped to $1,557, traded sideways, then gapped up at $1,557 levitated, gapped again ($1,563-$1,566) & shot for $1,580. Closed near the top of the range.

Folks, metals are strong as a garlic milkshake. To preserve that spike bottom for posterity, gold needs to climb above $1,580 tomorrow & confirm its intent. Milestones of success after that are $1,600, then $1,630. Gold must overcome these quickly, & that I expect to see.

Silver has made an upside down head and shoulders reversal, forming the head Wednesday. Before New York opened silver temporized between 2770c & 2738, then about 8:00 followed gold up in the same pattern. Ended the day up 82.6c (3%) at 2799.6c.

2800c will become the new floor for silver. Past three weeks of silver show a cascading blow-off bottom. Today reversed that. Silver will rapidly jump over 2900c to 3000c. Odd to say it because summer is seasonally the metals' sleepy season, but silver could stand at 3400c by end-June.

Whatever evil spell the Central Banking Wizards had cast over silver & gold was broken today. Enough realizers grasped all at once that a bodacious wave of inflation is inevitable, & ran to buy silver & gold. Now the magic is gone, and the Wizards only look like silly bureaucrats in pointed hats, waving little wands like conductors without a symphony.

I will ice this cake by noting that three days ago silver reached its low percentage for this correction against its 300 day moving average. That often pinpoints a reversal.

Better swap gold for silver now. Ratio may have topped yesterday. Confirming a reversal in gold & silver, premiums on physical silver & gold are rising rapidly, and that will hurt our realized ratio in a swap. If you plan to swap gold for silver, you'd better do it quickly.

On 17 May 1792 twenty-four stock brokers met and charged each other $24 worth of beads to buy Manhattan island. No, wait, I'm mixing up the stories. 24 stock brokers met that day to set fees & charges and set up the New York Stock Exchange. Wait a minute -- set fees & charges? Does that mean they were PRICE-FIXING? Never mind. It took them almost 24 hours to figure out how they would skin the public, and they've been skinning them successfully ever since.

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

— Franklin Sanders, The Moneychanger

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

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