The Moneychanger
Daily Commentary
Tuesday, 30 October a.d. 2012 Browse the commentary archive

Yet again today Hurricane Sandy closed down New York markets, first time that's happened since the 1888 blizzard. Yet the CME Globex computerized market is running, but trading has been light. Stock markets remained closed.

Also, in case some of y'all record prices, they changed yesterday's settlements to gold down $3.20 at $1,707.70; silver down 28.4c at 3172.6c; platinum down 12.40 at $1,532.90, and palladium down $7.45 to $588.95. Remember, those are YESTERDAY'S closes.

So what little drop of information can we squeeze out of today's trading? Silver rose 6.2 cents to 3178.8c while gold rose $2.80 to $1,710.50. Platinum had a good day, rising $19.70 to $1,552.60. Palladium was pretty peppy, too, up $6.40 to $595.35.

This offers the appearance that it's the shorts who got flooded out. After all, when SOMEbody was taken out of the game, prices rose. Now I wouldn't swing over hell using THAT for a rope, but it's a plausible guess.

Range on silver today was 3165 to 3212.4c, & that range has widened out (gone higher) since the afternoon Globex market opened. Gold is down $1.50, after a squeenchy daily range of $1,715 - $1,708.25. US dollar index today lost its grip above 80 & fell 29.2 basis points (0.38) to 79.939. No certain signal there yet.

Here's another little hint of strength in the market: the premiums on US 90% silver coin and Krugerrands have risen. Usually that presages higher prices.

Here are the bounds silver & gold face. Gold must close above $1,725, really $1,730 to confirm a change to upward. Silver needs to close above 3250c.

Underneath gold will signal lower prices by closing below $1,790. Silver below 3100c will beg for lower prices.

In truth, though, these partly open markets don't tell us much at all. Let's wait until they open fully & see what happens. By the way, gold above $1,725 would persuade me to buy.

On 30 October Jesse James & his fellows robbed a bank in Lexington, Missouri of $2,000. Not generally know is WHY the James boys went into bank robbing professionally. They had been Confederate guerillas during the War, and after the war they were not allowed surrender & parole. Rather than making peace with them, the US government made them permanent outlaws. I reckon since they were outlaws anyway, they figured they might as well make the most of their status. You have to admire ambition, even in an outlaw.

Many of you sent condolences on the death of my daughter-in-law, and I deeply appreciate your generous sympathy and your prayers. Thank you. We have to fly to Colorado Thursday for the Saturday funeral, so I will not publish commentaries on those days. God willing, I will return on Monday, 5 November.

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
30-Oct-12 Price Change % Change
Gold, $/oz 1,710.50 2.80 0.16%
Silver, $/oz 31.79 0.06 0.20%
Gold/Silver Ratio 53.810 -0.017 -0.03%
Silver/Gold Ratio 0.0186 0.0000 0.03%
Platinum 1,552.60 19.70 1.29%
Palladium 595.35 6.40 1.09%
S&P 500 1,411.94 -1.03 -0.07%
Dow 13,107.21 3.53 0.03%
Dow in GOLD $s 158.40 -0.20 -0.13%
Dow in GOLD oz 7.66 -0.01 -0.13%
Dow in SILVER oz 412.33 -0.69 -0.17%
US Dollar Index 79.94 -0.29 -0.36%
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: 1,707.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,755.72 1,767.68 1,767.68
1/2 AE 0.50 870.52 899.64 1,799.27
1/4 AE 0.25 435.26 458.36 1,833.43
1/10 AE 0.10 179.22 187.02 1,870.15
Aust. 100 corona 0.98 1,665.71 1,676.08 1,709.94
British sovereign 0.24 402.04 406.04 1,724.89
French 20 franc 0.19 318.86 322.86 1,729.32
Krugerrand 1.00 1,731.81 1,748.81 1,748.81
Maple Leaf 1.00 1,717.90 1,732.90 1,732.90
1/2 Maple Leaf 0.50 845.41 888.11 1,776.22
1/4 Maple Leaf 0.25 422.71 452.59 1,810.37
1/10 Maple Leaf 0.10 169.08 184.45 1,844.53
Mexican 50 peso 1.21 2,042.57 2,059.57 1,708.20
.9999 bar 1.00 1,713.88 1,724.88 1,724.88
SPOT SILVER: 31.73      
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 22,615.45 22,865.45 31.98
US 40% silver 1/2s 0.30 9,168.60 9,368.60 31.76
100 oz .999 bar 100.00 3,165.00 3,213.00 32.13
10 oz .999 bar 10.00 322.30 324.80 32.48
1 oz .999 round 1.00 31.58 32.28 32.28
Am Eagle, 200 oz Min 1.00 33.23 33.93 33.93
SPOT PLATINUM: 1,552.60      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,562.60 1,602.60 1,602.60
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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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