The Moneychanger
Daily Commentary
Thursday, 29 November a.d. 2012 Browse the commentary archive

Sometimes I feel like the only sane person in the whole durned lunatic asylum. Silver & gold came right back today while Republicans & Democrats dashed hopes of dodging the fiscal cliff by sniping at each other. The corruption, self-centeredness, & self-serving waffling from business, finance, and government are all undermining all loyalty & confidence from the core supporters of US society, namely, the middle class. I sweat bullets & weep thinking about what sort of hideous false prophet they are paving a road for, loudly & repetitively spouting his nostrums so that the weak, weary, & distrusting flock to him -- not because he has solutions indeed, but because he consistently preaches the same line, like Hitler, Lenin, Stalin, Roosevelt, Mussolini, Peron. Their solutions never worked, they just kept on repeating them so long that folks believed they might, and because they were so desperate to hear ANYBODY with a plan.

Having hacked up that bone from my throat, I'll look at markets now.

The scabby, ragged US dollar turned down again today, having spent all it could beg on yesterday's drunk. It quickly sank again to the gutter bottom just above 80 at 80.021. Last four days have left behind a head & shoulders top with a neckline bare basis points above 80.

Eight month chart hovers just above catastrophe. Words like "seismic event" and "Krakatoa" come to mind. 50 DMA stands at 80.08, & just a few basis points under that some long term support. Once the dollar falls though that all those gamblers who had been shorting the euro until the NGM shooed them off will rush to short the dollar. Won't be pretty. RSI & MACD chant together in a Russian bass "Down down down DOWN!"

Euro rose a scootch today, up 0.15% to $1.2978. Trying to peek through the downtrend line & stands barely above its clustered moving averages. Likely to run to $1.3150 at least, maybe higher. Will stink just as foully at $1.3150 as it does here, no, worse.

Yen ended down 0.04% at 121.80 cents/Y100. I imagine some sort of understanding exists among the gentlemen central bankers that the 120 - 118 number is about as low as the yen will be allowed to fall.

US$1=Y82.10=E0.7705=0.029114 oz Ag=0.000579 oz Au.

Stocks beat the 13,000 resistance today, & so will run a little higher. Dow gained 36.71 (0.28%) to 13,021.83. S&P500 added 6.02 to 1,415.95 (up 0.43%).

Gain today was more than revealed by a 36.71 point skip. Stocks broke through the downtrend line left by their October - end-November fall, plus crossing above their 20 DMA (12,890) & 200 DMA (12,995). That sets the Dow up for a test of the 50 DMA (13,209) and resistance at 13,300.

Investors are all besotted with hopeful economic news, but just like a drunk in a bind, any old alcohol will do, it doesn't have to be single malt Scotch. Thus the on again, off again fiscal cliffs talk thrills them, or if that fails, housing climbing some meaningless fraction of a point. If it wasn't that, it's be stray dogs.

Maybe I am just a sourpuss. Maybe, or maybe I see that fundamental purging & repairs to the economy have not even been attempted. Just the opposite, the flood of money has prevented them. Yet the answer out of the Potomac swamp will be the same: another wave of liquidity. Print until we die, & after us, the flood!

Can't be fixed.

Let us now turn our minds, befouled by government, finance, & nasty, wet stupidity to that bright spot in today's markets, silver & gold. Yea, let us turn that direction, & bask a while in relief.

Gold gained $10.70 to $1,727.20 (up 0.62%), nor did silver lag behind, up 66.4 cents to 3434.8c, a 1.97% gain.

Solid action, controverting, gainsaying, & nailing the lid on any downside outcome.

Gold needed to climb over $1,720 - $1,725 resistance. Good enough, well done, but still must wipe away yesterday's shame by closing above $1,740 -- reasonable chance of accomplishing that in the sunny morning.

On a four month chart Gold has validated the imperishable (Oh, I hope I don't have to eat THAT word) strength & solidity of that neckline support around $1,705. It leapt up today, vaulting over the 20 DMA (1,722.93) with ease.

In the teeth of yesterday's fright, the market has spoken, and it said, "No further!"

Silver's fall yesterday pictures a classic spike bottom Today it began rising at the New York open, and by 9:30 gapped up, then gapped again, from 3390c to 3425c. Made one little dip to 3395 late in the day, unless that is some artifact on my chart, then snapped right back.

Four month chart tells an even stronger tale, with silver posting its highest interday price since October 11, 3449c. Silver stands way above all its moving averages (50 = 3318, 200 = 3098, 20 = 3277, 300=3127). Little to say here outside, "Next stop, 3550c!"

Of course, I could be wrong, being nothin' more than a natural born fool from Tennessee. But y'all know, now, that sometimes in the play the fool turns out to be the wisest person around? Think about King Lear. But shucks! We don't have no kings in Tennessee, only fools.

Buy silver & gold. A very big & long running rally is just now starting. Buy.

On 29 November 1775 Sir James Jay invented invisible ink, but it never caught on. He couldn't see what he had written.

On 29 November 1864 about 45 minutes from where I am sitting took place the Battle of Spring Hill, Tennessee (south of Thompson's Station) where Hood without excuse let Schofield's Union Army escape. That mistake would destroy the Army of Tennessee, combined with Hood's fool attack at Franklin on 30 November.

On 29 November 1898 was Born Clive Staples Lewis in Belfast, Ireland. When he was 32 he got onto a motorcycle an atheist, and finished the ride a Christian. A professor at Oxford, he was a novelist, poet, medievalist, critic, essayist, & Christian apologist. A new reader can grab hold of Lewis almost anywhere with delight, but his greatest novels were in his Space Trilogy, Out of the Silent Planet, Perelandra, and That Hideous Strength. Then again, The Lion, The Witch, & The Wardrobe isn't bad, either.

On 29 November 1916 the US declared martial law in the Dominican Republic. You'll probably wonder why the US was in the Dominican Republic declaring anything, and so did the Dominicans.

On 29 November 1963 President Lyndon "Landslide" Johnson appointed Chief Justice Earl Warren head of a commission to cover up -- whoop! Did I say that? Make that "investigate" -- Kennedy's assassination.

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
29-Nov-12 Price Change % Change
Gold, $/oz 1,727.20 10.70 0.62%
Silver, $/oz 34.35 0.66 1.97%
Gold/Silver Ratio 50.285 -0.674 -1.32%
Silver/Gold Ratio 0.0199 0.0003 1.34%
Platinum 1,618.00 7.90 0.49%
Palladium 685.20 12.05 1.79%
S&P 500 1,415.95 6.02 0.43%
Dow 13,021.83 36.71 0.28%
Dow in GOLD $s 155.85 -0.51 -0.33%
Dow in GOLD oz 7.54 -0.02 -0.33%
Dow in SILVER oz 379.11 -6.38 -1.66%
US Dollar Index 809.20 -0.09 -0.01%
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: 1,727.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,778.81 1,787.45 1,787.45
1/2 AE 0.50 880.26 906.68 1,813.35
1/4 AE 0.25 444.45 457.66 1,830.62
1/10 AE 0.10 182.96 187.38 1,873.80
Aust. 100 corona 0.98 1,684.34 1,694.81 1,729.04
British sovereign 0.24 406.54 410.54 1,743.99
French 20 franc 0.19 322.43 326.43 1,748.42
Krugerrand 1.00 1,749.45 1,764.45 1,764.45
Maple Leaf 1.00 1,737.00 1,757.00 1,757.00
1/2 Maple Leaf 0.50 854.87 898.04 1,796.08
1/4 Maple Leaf 0.25 427.43 457.66 1,830.62
1/10 Maple Leaf 0.10 170.97 186.52 1,865.16
Mexican 50 peso 1.21 2,065.41 2,082.41 1,727.14
.9999 bar 1.00 1,733.04 1,744.04 1,744.04
SPOT SILVER: 34.27      
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 24,503.05 24,753.05 34.62
US 40% silver 1/2s 0.30 9,917.90 10,092.90 34.21
100 oz .999 bar 100.00 3,427.00 3,477.00 34.77
10 oz .999 bar 10.00 347.70 350.20 35.02
1 oz .999 round 1.00 34.12 34.97 34.97
Am Eagle, 200 oz Min 1.00 35.87 36.52 36.52
SPOT PLATINUM: 1,618.00      
Plat. Platypus 1.00 1,643.00 1,683.00 1,683.00
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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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