The Moneychanger
Daily Commentary
Wednesday, 8 August a.d. 2012 Browse the commentary archive

I reckon everybody but the politicians has gone to the beach, or else they're all lying low in the house because it's so hot outside. Markets are dead. In Europe, August is vacation month, so nothing much ever happens there in August.

When you have nothing to say, the best course is to shut your mouth to keep your empty foolishness trapped inside. Of course, being a natural born fool, I am not clever enough to do that, so I will comment anyway.

Stocks today took a rest. Traded raggedly up & down all day, just wheel-spinning. After several trips above & below unchanged, Dow managed to cling to 7.04 points (0.05%) & close photogenically up at 13,175.64.

S&P500 rose a mighty 0.87 (0.06%) to 1,404.22. Stocks are probably not stalling here, but only catching breath for another leg up, at least to this year's highs. That doesn't mean they have legs I want to dance with, just that stocks will rise to draw in a few more victims for the bear.

US Dollar rose 16.4 basis points from where it traded this time yesterday. But at 82.384 it remains below the barrier left above at 82.50 over the last three days. Looks like it's aiming to take up a more humble seat.

Japanese yen is trading in a tight little range. Rose 0.14% today to 127.43c (Y78.47). Forming a rounding top, it seems.

If I were trying to salvage the euro, I think I'd just go ahead and get a new job. ECB Criminal-In-Chief Mario Draghi managed to lift it on a cloud of hot gas & empty promises from $1.2042 to $1.2442. Now the gas is floating away, & gravity is wreaking it's awaited vengeance. Euro lost 0.33% today to end at $1.2355. Unless it can (1) break through $1.2500, & immediately climb over $1.2750, the euro is, as they say in the oyster-canning business, way too ripe.

If silver gainsaid gold yesterday, today gold gainsaid silver. Gold augmented $3.20 to end trading at $1,612.90, but silver diminished 6/10 cent to 2800c. They aren't so much rolling over as they are plumb dead stopped in the middle of the road. The two charts are virtually identical. Gold's ceiling is at $1,615+ & silver's at 2825c. Long as gold holds above $1,600 & silver above 2760c, they'll be okay.

Just to inoculate y'all against complacency, remember that sometimes markets go flat because nobody is interested & it's August, but sometimes because the buying & selling forces are evenly balanced. Give one or the other a tiny foothold, & you get a big movement. Not likely right here, but possible, & worth looking over your shoulder for.

In poker you generally draw cards to the most likely hand, that is, you don't draw to inside straights or straight flushes. Likewise, the overwhelming likelihood here is that we are simply watching August walk out its slow path as silver & gold build a platform for a big rally in September.

On 8 August 1896 was born Marjorie Kinnan Rawlings, a rare exception to the rule that writers ought only to write about their own place. Born in Washington, DC, she was educated in Wisconsin but moved with her husband in 1928 to northern Florida. Already a journalist, she became fascinated with the local culture & wrote well about it. South Moon Under was her first novel, then later her success was cemented with the story, The Yearling, later made into a movie with Gregory Peck.

LAST CALL for the Bodacious Hoedown: Saturday, 1 September 2012 from 1 pm to 9 pm we'll have an afternoon of field games, from Kiss the Pig to a dunk tank and tug of war. For supper we'll dine on our own Top of the World farm pork and chicken. After supper The Georgia Crackers, an old time band, will play and T-Claw will call the dances. Then we'll all dance in the grass till the stars get tired.

It's all free. Even supper. My family has lost their minds.

But there's one catch: you must let us know that you're coming. Send Justin an email at justin@the-moneychanger.com & tell him you're coming and with how many. Ask him for directions. We're about 2 hours south of Nashville and about 45 minutes north of Florence, Alabama.

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
8-Aug-12 Price Change % Change
Gold, $/oz 1,612.90 3.20 0.20%
Silver, $/oz 28.08 0.01 0.02%
Gold/Silver Ratio 57.439 0.102 0.18%
Silver/Gold Ratio 0.0174 -0.0000 -0.18%
Platinum 1,409.70 -0.70 -0.05%
Palladium 586.55 -1.65 -0.28%
S&P 500 1,402.22 0.87 0.06%
Dow 13,175.65 7.04 0.05%
Dow in GOLD $s 168.87 -0.23 -0.13%
Dow in GOLD oz 8.17 -0.01 -0.13%
Dow in SILVER oz 469.22 0.15 0.03%
US Dollar Index 82.22 -0.10 -0.12%
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: 1,613.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,654.94 1,666.23 1,666.23
1/2 AE 0.50 822.12 846.83 1,693.65
1/4 AE 0.25 415.09 427.45 1,709.78
1/10 AE 0.10 170.87 175.01 1,750.11
Aust. 100 corona 0.98 1,573.16 1,583.06 1,615.04
British sovereign 0.24 379.70 386.70 1,642.74
French 20 franc 0.19 301.15 308.15 1,650.49
Krugerrand 1.00 1,631.00 1,639.00 1,639.00
Maple Leaf 1.00 1,623.00 1,643.00 1,643.00
1/2 Maple Leaf 0.50 798.44 838.76 1,677.52
1/4 Maple Leaf 0.25 399.22 427.45 1,709.78
1/10 Maple Leaf 0.10 159.69 174.20 1,742.04
Mexican 50 peso 1.21 1,934.91 1,946.79 1,614.66
.9999 bar 1.00 1,618.65 1,629.65 1,629.65
SPOT SILVER: 28.06      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26,000.00 27,750.00 36.27
VG+ Peace dollar 0.77 25,000.00 27,500.00 35.95
90% silver coin bags 0.72 20,048.60 20,348.60 28.46
US 40% silver 1/2s 0.30 7,805.70 7,980.70 27.05
100 oz .999 bar 100.00 2,806.00 2,856.00 28.56
10 oz .999 bar 10.00 285.60 288.10 28.81
1 oz .999 round 1.00 27.91 28.76 28.76
Am Eagle, 200 oz Min 1.00 29.66 30.31 30.31
SPOT PLATINUM: 1,409.70      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,434.70 1,474.70 1,474.70
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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.

Other Important Information

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