The Moneychanger
Weekly Commentary
Friday, 9 November a.d. 2012 Browse the commentary archive
Here's the weekly scorecard:
  2-Nov 9-Nov Change % Change
Silver, cents/oz. 3,083.50 3,259.00 175.50 5.7
Gold, dollars/oz. 1,674.00 1,730.30 56.30 3.4
Gold/silver ratio 54.289 53.093 -1.200 -2.2
Silver/gold ratio 0.0184 0.0188 0.0004 2.3
Dow in Gold Dollars (DIG$) 161.68 153.11 -8.58 -5.3
Dow in gold ounces 7.82 7.41 -0.42 -5.3
Dow in Silver ounces 424.62 393.23 -31.39 -7.4
Dow Industrials 13,093.16 12,815.39 -277.77 -2.1
S&P500 1,414.20 1,379.85 -34.35 -2.4
US dollar index 80.61 81.05 0.45 0.6
Platinum 1,540.90 1,554.40 13.50 0.9
Palladium 598.85 610.25 11.40 1.9

"I used to think I was indecisive, but now I'm not so sure."

Yesterday I erred in the silver closing price. It rose 58 cents to close Comex at 3223.1, not 3181c.

Friday's scoreboard tells it all: silver up 5.7%, gold up 3.4%, Dow in gold down 5.3%, Dow in silver down 7.4%, Dow down 2.1%, S&P500 down 2.1%, US dollar index up 0.6%. Doesn't look to me like O'Bama's re-election re-assured stock markets much.

US dollar index, now above its 20, 50, and 200 day moving averages, continues to eke out a rally. Today it burst the bonds of 81, gaining 23.9 basis points (0.31%) to end at 81.051. Not a barn burner, but a trend in force remains in force until it reverses, & for the nonce the dollar's trend is skyward.

Euro had a sad week, losing every day but one, and tacking on another 0.29% loss today to $1.2711. Headed for $1.26, maybe lower. Not much hope there.

Yen has rallied this week, although it lost 0.09% today to 125.79 cents per 100 yen. Now it has hit its downtrend line, but is at least above its 200 DMA. Well, AT its 200 DMA. I imagine the fights among the various central bankers are the worst falling out of thieves since Gideon faced the Midianites and their partners.

If I had stocks I'd sell 'em & buy silver & gold, 'cause I haven't enough patience to watch this volatility with a downward bias. Stocks may stage a rally somewhere here, but don't seem to have stopped falling just yet. They simply look wretched.

Dow gained a measly 4.07 today to close at 12,815.39 -- not much of a comeback after losing 277.77 this week. S&P500 rose 2.34 today to 1,379.85. Next 5 years stocks are going nowhere.

Silver & gold confirmed with third day higher closes their reversals & breakouts earlier this week. Silver today added 35.9 cents to close 3259c. Gold added $4.90 to $1,730.30.

Whether I look at the weekly or daily charts, the same picture emerges: the next leg up, the next rally, for silver & gold has begun. They would have to close below $1,700 or 3150c to contradict that outlook.

Stop dawdling & vacillating and BUY! By June gold will most likely be trading over $2,300. Yes, I know I sound crazy, but like every other crazy man, I seem perfectly sane to me.

From 9:00 to 10:00 p.m. Eastern time on Friday, 9 November I'll be on the Christian Farm & Homestead Radio Show to talk about my new book, At Home In Dogwood Mudhole. You can listen here: Or, if you'd rather download the MP3 file later, you can find that right here:

Y'all enjoy your weekend.

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
9-Nov-12 Price Change % Change
Gold, $/oz 1,730.30 4.90 0.3
Silver, $/oz 32.59 0.36 1.1
Gold/Silver Ratio 53.093 0.145 0.3
Silver/Gold Ratio 0.0188 0.0002 1.1
Platinum 1,554.40 16.90 1.1
Palladium 610.25 -3.30 -0.5
S&P 500 1,379.85 -22.50 -1.6
Dow 12,815.39 -2.35 -0.0
Dow in GOLD $s 153.11 -0.45 -0.3
Dow in GOLD oz 7.41 -0.02 -0.3
Dow in SILVER oz 393.23 -4.45 -1.1
US Dollar Index 81.05 0.24 0.3
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: 1,731.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,781.61 1,792.00 1,792.00
1/2 AE 0.50 882.50 912.01 1,824.03
1/4 AE 0.25 441.25 464.66 1,858.66
1/10 AE 0.10 181.69 189.59 1,895.88
Aust. 100 corona 0.98 1,688.63 1,699.12 1,733.44
British sovereign 0.24 407.57 411.57 1,748.39
French 20 franc 0.19 323.25 327.25 1,752.82
Krugerrand 1.00 1,757.37 1,774.37 1,774.37
Maple Leaf 1.00 1,741.40 1,756.40 1,756.40
1/2 Maple Leaf 0.50 857.04 900.33 1,800.66
1/4 Maple Leaf 0.25 428.52 458.82 1,835.28
1/10 Maple Leaf 0.10 171.41 186.99 1,869.91
Mexican 50 peso 1.21 2,070.68 2,087.68 1,731.51
.9999 bar 1.00 1,737.46 1,748.46 1,748.46
SPOT SILVER: 32.60      
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 23,273.25 23,523.25 32.90
US 40% silver 1/2s 0.30 9,425.25 9,625.25 32.63
100 oz .999 bar 100.00 3,252.00 3,300.00 33.00
10 oz .999 bar 10.00 331.00 333.50 33.35
1 oz .999 round 1.00 32.45 33.15 33.15
Am Eagle, 200 oz Min 1.00 34.10 34.80 34.80
SPOT PLATINUM: 1,554.40      
Platinum Platypus 1.00 1,564.40 1,604.40 1,604.40
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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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