The Moneychanger
Daily Commentary
Thursday, 14 June a.d. 2012 Browse the commentary archive

Rather than hide my suspicions & biases, I'll just parade them right out here in front of you, especially today, when they are being stimulated so electrically.

Now think. As a matter of official & statutory if secretive policy the US government & Federal Reserve in concert with other central banks actively manipulate currency and silver & gold markets. This weekend the Greeks hold an election that may signal their departure from the euro & disrupt the whole fascist banking cart in Europe. If you were a central banker, would you reach into markets proactively & manipulate them to keep them calm before that election?

Does a duck eat bugs?

Hence no one should be surprised that the euro rose today, the dollar fell stoutly (0.33%), & "Somebody" sneaked into the silver market & slapped it from a threatening-to-break--the-leash 2910 to 2820 cents in a few minutes. If you were the Nice Government Men tasked (as they like to intone) with keeping gold down, wouldn't you prefer to hit the much smaller silver market first so your gold market trickery would work more strongly?

Does a rat eat garbage?

Dow Jones industrials probably gainsaid that head & shoulders formation by closing above 12,650 (peak of the head) today, but maybe not. (Remember that the top of the right shoulder in May reached barely higher than the head). In any event most of the buying came from SOMEbody active after 3:30, i.e., 30 minutes before the close. Dow managed a stout gain of 155.53 (+1.24%) to 12,651.91 while the S&P500 almost kept up at 1,329.10, up 14.22 or 1.08%.

None of this even marginally interests me in stocks. Their fate is sealed. Dow today bumped up from beneath into the neckline of the LARGER head & shoulders that it broke down from at May's close. Folks, I know I'm no more than a ridge-runner from Tennessee, but I'm warning y'all that there's no future in this stock market, other than the easy descent into Avernus.

Currencies were as entertaining today as Catherine the Great's Potemkin-sponsored ride through Russia, and about as genuine. US dollar index axed its way through the 20 day moving average (82.24) to drop 25.6 basis points (0.33%) to 81.876. Sure, sure, right before that Greek election everybody's dumping dollars. Right.

The euro rose to $1.2632, up 0.6%. Here there is a gigantic short position, so one could also chalk that rise up to wary shorts closing out their positions before that election, just in case it goes well for the euro.

The yen remained quiet, practically flat at 126c/Y100 (Y79.37/US$1). Yen if floating along underneath its 20 DMA without enough moxie to rise through it.

Are y'all ready for this? Gold rose a mighty 30 cents today to close Comex at $1,618.40. Sounds trifling until you look closer.

First, gold remains handily within its uptrend since the Monday low. More, About the time the New York market opened, gold has already pushed through $1,625 resistance to reach $,627.50 & bid fair to run off. About 9:30 SOMEbody showed up selling lots of gold & drove the price down to $1,610.30 in minutes. Good try, NGM, but it didn't stick. Gold bounced right back and by 11:30 had gapped & risen above $1,624. After the $1,618.40 Comex close gold bounced back to $1,622+, where it remaineth.

Plainly, gold is battering at that $1,625 resistance. Barring more mysterious selling -- a lot more -- it could pierce that ceiling tomorrow. In any event I don't expect it will fall back. Surprises can always happen, but I reckon you'll never see gold below $1,590 again.

SOMEbody hit silver worse than gold today. About the same time somebody took a notion to hit gold SOMEbody smote silver, driving it from 2900 cents to 2820c. No worry, silver re-bounded, but ended the day 53.4 cents lower at 2840.1. Gold/Silver ratio rose to 56.98.

Silver's chart doesn't look as garlicky-strong as gold's, but it remains above its 20 DMA so momentum points up. 'Twould comfort me silver rise above its 50 DMA (2971c) tomorrow, or Monday.

From within themselves, silver & gold are ready to move higher. NGM may cast a few more stumbling blocks into their path, but though they fall, they will rise. Count on it.

On 14 June 1642 Massachusetts passed the first compulsory school attendance law. We all know what a success THAT idea has been.

On 14 June 1953 Elvis Presley graduated from Humes High School in Memphis. He had been complying with the law, which by then had spread from Massachusetts to Tennessee.

Here's a riddle to chew on. On 14 June 1954 Dwight Eisenhower signed a law adding the words "under God" to the Pledge of Allegiance. No, they weren't included in there at first because the pledge was written in 1892 by a defrocked socialist minister, and was said into the 1930s with hand raised in the fascist salute, until that made the point too embarrassing. So the new Creed, the Pledge of Allegiance, mentioned no God but the state for the first 60 years of its life. One wonders how adding those two words changed anything. Compulsory pledge, compulsory allegiance -- I reckon that fits right in with compulsory school attendance.

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
14-Jun-12 Price Change % Change
Gold, $/oz 1,618.40 0.30 0.02%
Silver, $/oz 28.40 -0.53 -1.85%
Gold/Silver Ratio 56.984 1.062 1.90%
Silver/Gold Ratio 0.0175 -0.0003 -1.86%
Platinum 1,486.10 20.80 1.42%
Palladium 633.60 11.60 1.86%
S&P 500 1,329.10 14.22 1.08%
Dow 12,651.91 155.53 1.24%
Dow in GOLD $s 161.60 1.97 1.24%
Dow in GOLD oz 7.82 0.10 1.24%
Dow in SILVER oz 445.47 13.60 3.15%
US Dollar Index 81.88 0.26 0.31%
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: 1,622.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,658.50 1,673.50 1,673.50
1/2 AE 0.50 819.51 851.97 1,703.94
1/4 AE 0.25 413.81 430.04 1,720.17
1/10 AE 0.10 172.02 178.51 1,785.08
Aust. 100 corona 0.98 1,574.76 1,588.76 1,620.85
British sovereign 0.24 382.01 389.01 1,652.54
French 20 franc 0.19 302.98 309.98 1,660.29
Krugerrand 1.00 1,632.54 1,647.54 1,647.54
Maple Leaf 1.00 1,632.80 1,652.80 1,652.80
1/2 Maple Leaf 0.50 803.29 843.86 1,687.71
1/4 Maple Leaf 0.25 401.64 430.04 1,720.17
1/10 Maple Leaf 0.10 160.66 175.26 1,752.62
Mexican 50 peso 1.21 1,936.88 1,952.88 1,619.71
.9999 bar 1.00 1,628.48 1,639.48 1,639.48
SPOT SILVER: 28.58      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 24,599.91 26,000.00 33.99
VG+ Peace dollar 0.77 23,099.91 25,000.00 32.68
90% silver coin bags 0.72 20,359.63 20,609.63 28.82
US 40% silver 1/2s 0.30 7,957.63 8,132.63 27.57
100 oz .999 bar 100.00 2,857.50 2,907.50 29.08
10 oz .999 bar 10.00 290.75 293.25 29.33
1 oz .999 round 1.00 28.43 29.28 29.28
Am Eagle, 200 oz Min 1.00 30.18 30.88 30.88
SPOT PLATINUM: 1,486.10      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,511.10 1,551.10 1,551.10
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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.

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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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