The Moneychanger
Daily Commentary
Monday, 15 October a.d. 2012 Browse the commentary archive

Y'all, we had one more great time at the Transformations Gathering this weekend. We had folks from so many different backgrounds & standpoints I was afraid there might be cuttings and shootings galore, but every one of them graciously laid all that aside in favour of a conversation about how we ought to live and build in a world gone crazy.

If we learned nothing else, we know we are not alone. Don't let anybody kid you: there are still loads of honest folks full of integrity and honesty and competence. Go home, kiss your wife or husband, hug your children, & take heart: there are a lot of other people besides you who are determined to build a better life on the bones of a dying economy, and build it themselves.

Currencies today stand at US$1 = Y78.70 = E 0.7724.

US dollar index make a spike bottom Friday at 79.50 & has completed an upside-down head & shoulders with a neckline about 79.95. Close above 80 sends the dollar index scooting higher. Gained today 7.5 basis points over Friday to close at 79.764. Expect dollar to rally as long as it holds 79.50.

Euro lost 0.05% to $1.2946. Has now posted a series of three lower tops. It's like those Tarzan movies when the Englishman leading the safari hears the drums beating in the jungle & all the porters throw away their bundles & run away. "Bad juju, Bwana!"

Yen gapped down today and lost 0.35% to 127.07. No good news expected for yen-owners.

STOCKS diverged cleanly from metals today, gaining while metals fell. Dow rose 95.68 (0.72%) to 13,424.53. Dow has bounced off its 50 day moving average (13,325.35) & is climbing toward the 20 DMA (13,491.56). S&P500 has turned, too, up 11.52 today (0.81%) to 1,440.11.

Y'all mark my words, this will end in mighty sorrows for stock investors.

Gold barely gapped down today with a high at $1,751.85 versus Friday's low at $1,752.10. After Friday's $10.80 tumble, gold plunged another $22 today, closing at $1,736. Y'all will mark carefully that is lower than the last intraday low at $1,738.30, so constitutes a breakdown.

Gold has dropped out of that broadening top formation & should continue to sink rapidly toward $1,700 - $1,650 & the this little correction's end.

Silver topped Friday's 41.3 cent loss by dropping another 92.6 cents today & busting through 3300c. Closed at 3270.7c.

That pulled silver through the bottom of support in the broadening top pattern. It will fall to 3200c or even 3050c, probably in a scary waterfall.

Don't worry. Y'all knew this was coming. It's your chance to buy more silver & gold at reduced prices. Keep your eyes peeled, that's coming soon.

From Friday's 52.270 the gold/silver ratio jumped to 53.077. Expect a rise to at least 54:1.

On 15 October 1860 eleven year old Grace Bedell wrote a letter to presidential candidate Abraham Lincoln suggesting he would look better if he would grow a beard. He did, but it didn't.

On 15 October 1951 I Love Lucy first played on TV. She is still one of the greatest comics of the 20th century, and without anything mean or nasty about her comedy.

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
15-Oct-12 Price Change % Change
Gold, $/oz 1,736.00 -22.00 -1.25%
Silver, $/oz 32.71 -0.93 -2.75%
Gold/Silver Ratio 53.077 0.807 1.54%
Silver/Gold Ratio 0.0188 -0.0003 -1.52%
Platinum 1,631.30 -25.80 -1.56%
Palladium 632.90 -5.05 -0.79%
S&P 500 1,440.11 11.52 0.81%
Dow 13,424.53 95.68 0.72%
Dow in GOLD $s 159.86 3.14 2.00%
Dow in GOLD oz 7.73 0.15 2.00%
Dow in SILVER oz 410.45 14.15 3.57%
US Dollar Index 79.76 0.08 0.09%
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: 1,736.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,778.59 1,797.69 1,797.69
1/2 AE 0.50 885.31 914.91 1,829.82
1/4 AE 0.25 442.65 466.14 1,864.56
1/10 AE 0.10 182.27 190.19 1,901.91
Aust. 100 corona 0.98 1,694.00 1,704.51 1,738.94
British sovereign 0.24 408.87 412.87 1,753.89
French 20 franc 0.19 324.28 328.28 1,758.32
Krugerrand 1.00 1,757.74 1,774.74 1,774.74
Maple Leaf 1.00 1,746.90 1,761.90 1,761.90
1/2 Maple Leaf 0.50 859.77 903.19 1,806.38
1/4 Maple Leaf 0.25 429.88 460.28 1,841.11
1/10 Maple Leaf 0.10 171.95 187.59 1,875.85
Mexican 50 peso 1.21 2,077.25 2,094.25 1,736.96
.9999 bar 1.00 1,742.98 1,753.98 1,753.98
SPOT SILVER: 32.69      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 30,500.00 32,500.00 42.48
VG+ Peace dollar 0.77 30,000.00 32,000.00 41.83
90% silver coin bags 0.72 23,155.28 23,512.78 32.89
US 40% silver 1/2s 0.30 9,450.33 9,650.33 32.71
100 oz .999 bar 100.00 3,260.50 3,308.50 33.09
10 oz .999 bar 10.00 331.85 334.35 33.44
1 oz .999 round 1.00 32.54 33.24 33.24
Am Eagle, 200 oz Min 1.00 34.19 34.89 34.89
SPOT PLATINUM: 1,631.30      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,641.30 1,681.30 1,681.30
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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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