The Moneychanger
Daily Commentary
Tuesday, 27 November a.d. 2012 Browse the commentary archive

Watching markets is liable to make you feel bi-polar: one day king, next day pauper. That's why it's so important to filter the noise out of the symphony playing underneath.

Today the scrofulous US dollar index rose 21.8 basis points (0.28%) to 80.346. Filter out the noise, & you'll see it doesn't amount to a hill of beans.

Dollar index bounced today after careening through its 200 (80.76) and 20 (80.67) day moving averages on Friday. It hit the 50 DMA, 80.03, & today bounced. Even a flat basketball will bounce a little, but that ain't buoyancy.

The theme playing beneath this began 7 days ago when the Dollar hit 81.46, then failed, and hath failed ever since. Can't repair that. Headed for 78.60 & lower. Oh, the Nice Government Men may slow it down, even engineer a tiny rally-ette or two to shake off, confuse, and demoralize the short sellers, but down it will go, or axheads start floating.

A reader in the UK asked me about the British Pound, but I am loath to deliver such bad news: y'all a pretty much sunk. I don't keep up with British economic statistics, but what I read puts your situation somewhat lower than Europe's & somewhat higher than Japan's. Don't brag, the zloty's status is higher than Japan's, too. Look at chart at http://bit.ly/UaszX8

Looking at a two year four month chart plainly shows the Nice Government men managing the pound sterling in a range from $1.63 on the top to $1.525 on the bottom. Yes, it poked its head above that line in 2011, only to be soundly slapped back. In October it (nearly) hit $1.63 again, but has since dived for the ocean depths to close today at $1.6026.

The pound has formed an even sided triangle, & once it punctures that bottom boundary, today about $1.59, it will sink toward $1,53 again. Nothing encouraging in that chart. If I were y'all in the UK, I'd be swapping paper pounds for silver & gold so fast the onlookers would think I was a threshing mill about to blow up.

Of course, I would be doing the same with yen, euros, or US dollars, so don't take it personal, you folks in Great Britain. They're doing it to all of us.

By the way, silver & gold look ready to turn up strongly against the pound sterling.

Yen closed at 121.78 cents/Y100, like a barbell dropped off the Queen Mary looking for the bottom. Euro fell 0.35% to $1.2945. Might be headed higher against the US dollar, but not confirmed yet.

US$1=Y82.12=E0.7725=0.029428 oz Au = 0.000574 oz Au.

Stocks worked hard at disappointing their partisans again today,. Dow lost 89.24 (0.69%) to 12,878.13. S&P500 followed right along, losing 7,.35 (0.52%) to 1,398.94.

No wonder, as stocks have run plumb up against the steep downtrend line their fall since early October hath drawn. See chart at http://bit.ly/U1xqHR They also bumped their noggin against the 200 DMA (12,993.03). Even if they punch through, they will hit strong resistance 13,300.

Silver & gold spent another day digesting Friday's gains. Gold backed off $7.30 to $1,742.30 and silver gave back 15.6 cents to 3398.1c.

Filter out the noise: for gold that amounted to nothing more than touching back to the 50 DMA ($1,741.96). Low at $1,739.86 handily defended that $1,740 support. For silver, it was merely a touchback to support, with a low at 3389c.

Here's a Tennessee fool's guess: next little move will be stout, probably taping on 3550c for silver & $1,800 for gold. But what do I know? I spend all my nights huntin' possum & days sitting on the front porch. Won't be able to do that much longer. Armadillos are replacing the possums, & not even a buzzard will eat an armadillo & a dog won't track one.

Back to the point: today made no change to the technical outlook for silver & gold. Gold needs to remain above $1,738 and silver above 3389c. And of course, they ought to keep steadily advancing.

I still believe this breakout offers a rare opportunity to buy silver & gold at low risk.

On 27 November 511, Clovis, King of the Salian Franks, who were Germans but living in France & later became the French, died and divided his kingdom among this four sons with the catchy names: Clotaire, Childebert, Chlodomer, & Theuderic. Clovis' wife was Clotilde, and he was the first Christian king of France and founder of the Merovingian dynasty that ruled France/the Franks for the next two centuries, until the Carolingians arrived.

AT HOME IN DOGWOOD MUDHOLE

Because I like to put my money where my mouth is, I asked my design genius Collin the Magnificent to put up a website at www.dogwoodmudhole.com. There you can read not a measly first page or copyright page or chiseling title page like you get on Amazon, but an ENTIRE chapter called "Pig Persuader." If you read it and don't laugh out loud at least once, probably with loud snorting, I will send you a quarter. And all the rest of the book is just as good, lots of it better, but this is one of my personal favourites.

Go. Read. Buy At Home In Dogwood Mudhole. Unsolicited one reader wrote me that he had laughed himself "SILLY" reading it. More than one reader has bought a case or half a case, reckoning they could give no better gift for Christmas. I am humbled & gratified, and I bet if you'll read that chapter, you'll like it, too.

Go on, click: www.dogwoodmudhole.com

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
27-Nov-12 Price Change % Change
Gold, $/oz 1,742.30 -7.30 -0.42%
Silver, $/oz 33.98 -0.16 -0.46%
Gold/Silver Ratio 51.273 0.020 0.04%
Silver/Gold Ratio 0.0195 -0.0000 -0.04%
Platinum 1,618.00 -4.00 -0.25%
Palladium 668.20 -7.00 -1.04%
S&P 500 1,398.94 -7.35 -0.52%
Dow 12,878.13 -89.24 -0.69%
Dow in GOLD $s 152.79 -0.40 -0.26%
Dow in GOLD oz 7.39 -0.02 -0.26%
Dow in SILVER oz 378.98 -0.88 -0.23%
US Dollar Index 80.35 0.22 0.27%
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: 1,741.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,792.31 1,802.76 1,802.76
1/2 AE 0.50 887.81 917.49 1,834.99
1/4 AE 0.25 443.90 467.46 1,869.82
1/10 AE 0.10 182.78 190.73 1,907.27
Aust. 100 corona 0.98 1,698.78 1,709.31 1,743.84
British sovereign 0.24 410.02 414.02 1,758.79
French 20 franc 0.19 325.19 329.19 1,763.22
Krugerrand 1.00 1,764.44 1,779.44 1,779.44
Maple Leaf 1.00 1,751.80 1,766.80 1,766.80
1/2 Maple Leaf 0.50 862.19 905.74 1,811.47
1/4 Maple Leaf 0.25 431.10 461.58 1,846.31
1/10 Maple Leaf 0.10 172.44 188.11 1,881.14
Mexican 50 peso 1.21 2,083.11 2,100.11 1,741.82
.9999 bar 1.00 1,747.90 1,758.90 1,758.90
SPOT SILVER: 34.01      
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 24,277.83 24,527.83 34.30
US 40% silver 1/2s 0.30 9,839.73 10,039.73 34.03
100 oz .999 bar 100.00 3,392.50 3,440.50 34.41
10 oz .999 bar 10.00 345.05 347.55 34.76
1 oz .999 round 1.00 33.86 34.56 34.56
Am Eagle, 200 oz Min 1.00 35.51 36.21 36.21
SPOT PLATINUM: 1,618.00      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,628.00 1,668.00 1,668.00
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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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