The Moneychanger
Daily Commentary
Tuesday, 4 September a.d. 2012 Browse the commentary archive

By the rumor, sell the news. The stock market gained on news that Ben the Bully Bandit would water down the dollar even more, and fell again today. The blasts of blarney no longer scare many birds off the trees. Thus Ben must pull out the Inflation Gun, his only other weapon. Whoops -- that's already failed with QE 1 & QE 2. "I know what you're thinking, Ben. You're thinking, `Did I fire six shots or only five?' Tell you the truth, Ben, I forgot myself in all this excitement."

Dow fell 54.9 (0.42%) to 13,035.94. S&P500 lost 0.12% (1.64) to 1,404.94. Stocks are verging on falling off the cliff.

US dollar index gained 12.5 basis points (0.16%) to 81.34, a meaningless day's activity. 81.40 is the top of the range, 81.00 the bottom. Dollar index has its eye set on 80.60, the 200 day moving average, maybe even lower.

Euro tapped on $1.2600 resistance Friday, and fell back today 0.14% to $1.2562. Euro will rise to $1.3000 if it can clear $1.2700.

Yen is dancing with its downtrend line. Down today a bare 0.5% to 127.54c (Y78.41).

Look out! Here's a little bucket of cold water on the party! Nothing rises forever. Silver & gold have a ways to run yet, but a little correction will come -- it always does.

Gold jumped $8.30 to $1,692.90. Considering that the aftermarket is trading at $1,697.20, that close looks a bit posed. Low came early (9:30) at $1,688.50, then rocketed off that clean to the high, $1,698.35.

Gold will probably slice through $1,700 tomorrow, certainly this week. This run won't stop before $1,740 or $1,750.

Silver gained 97.8 cents to 3234.8c. Friday it gained 100.3c. This is fun, but not normal. At 3234.8, silver needs to stretch a bare 18.2 cents to reach its 300 day moving average.

So what? Why, that 300 DMA acts like the 200 DMA does for other markets. Once silver climbs over that 300 DMA, there's no question the next leg up has begun. Put on your helmet, buckle on your seat belt!

The Gold/Silver ratio dropped 1.368 to 52.333 today. That's enormous.

Silver ought to climb another week or more, & touch 3445 cents before it stops.

What big lesson ought we draw from all this? The gold & silver corrections have ended, the next rally has begun, buy more.

My book developer tells me that publishers never announce the specific date a book will be published, only the month. So "forthcoming in October" (the 15th, I think) my book AT HOME IN DOGWOOD MUDHOLE (Volume I) will be published. Y'all can save yourselves five bucks shipping & get an autographed copy if you order before 15 October 2012. See That's me behind the horses on the mower, and that picture was taken about 200 yards from where I'm sitting right now. Joel Salatin says it is "at once hilarious, humbling, and holy."

The Bodacious Hoedown last Saturday was a great success, biggest we ever had: 225 people. They had fun, they ate a dangerous amount of food, & they danced barefoot in the grass.

From 7 September through 16 September I will be away for our family vacation. Sorry, I won't publish a daily commentary during that time, but I will return on 17 September, God willing.

On 4 September 1862 the Army of Northern Virginia crossed the Potomac River into the occupied state of Maryland, beginning the Antietam campaign.

On 4 September 1886 the great Apache leader Geronimo surrendered. The conditions of his surrender were later broken, and he was never allowed to return to the land of his birth. He died in Fort Sill, Oklahoma in 1909.

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
4-Sep-12 Price Change % Change
Gold, $/oz 1,692.90 8.30 0.49%
Silver, $/oz 32.35 0.98 3.12%
Gold/Silver Ratio 52.334 -1.367 -2.55%
Silver/Gold Ratio 0.0191 0.0005 2.61%
Platinum 1,566.50 30.20 1.97%
Palladium 640.25 12.30 1.96%
S&P 500 404.94 -1.64 -0.40%
Dow 13,035.94 -54.90 -0.42%
Dow in GOLD $s 159.18 -1.44 -0.90%
Dow in GOLD oz 7.70 -0.07 -0.90%
Dow in SILVER oz 402.99 -14.31 -3.43%
US Dollar Index 81.34 0.13 0.15%
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: 1,697.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,741.33 1,751.24 1,751.24
1/2 AE 0.50 865.06 891.03 1,782.06
1/4 AE 0.25 436.77 449.76 1,799.03
1/10 AE 0.10 179.80 184.15 1,841.46
Aust. 100 corona 0.98 1,655.28 1,665.60 1,699.24
British sovereign 0.24 399.52 406.52 1,726.94
French 20 franc 0.19 316.87 323.87 1,734.69
Krugerrand 1.00 1,707.38 1,722.38 1,722.38
Maple Leaf 1.00 1,707.20 1,727.20 1,727.20
1/2 Maple Leaf 0.50 840.11 882.54 1,765.09
1/4 Maple Leaf 0.25 420.06 449.76 1,799.03
1/10 Maple Leaf 0.10 168.02 183.30 1,832.98
Mexican 50 peso 1.21 2,029.78 2,046.78 1,697.58
.9999 bar 1.00 1,703.14 1,714.14 1,714.14
SPOT SILVER: 32.38      
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 22,897.88 23,147.88 32.37
US 40% silver 1/2s 0.30 9,078.63 9,253.63 31.37
100 oz .999 bar 100.00 3,237.50 3,287.50 32.88
10 oz .999 bar 10.00 328.75 331.25 33.13
1 oz .999 round 1.00 32.23 33.08 33.08
Am Eagle, 200 oz Min 1.00 33.98 34.63 34.63
SPOT PLATINUM: 1,566.50      
Plat. Platypus 1.00 1,591.50 1,631.50 1,631.50
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© 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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