The Moneychanger
Daily Commentary
Thursday, 6 December a.d. 2012 Browse the commentary archive

Everybody's moaning because Apple dropped 6.2% on Wednesday. Made me go look at the chart, AAPL. Guess what showed up? Jaws of Death. Look at http://bit.ly/SJHNE0

Now maybe it will come back. Maybe all that Obama inspired tax selling is driving it down. On the other hand, maybe it's foretelling what lies ahead for the whole market. If so, the pain cannot be imagined, since Apple is one of the few well-performing Dow stocks.

Once again, in spite of the US dollar index rising 40.4 basis points (0.52%) & above 80 resistance, silver & gold rose. Dollar did nothing more that rise to the resistance line it had fallen through in the past two days. Next move down ought to be meaty.

Euro hit that overhead downtrend line & fell back like Vlad Dracula meeting a silver crucifix. Gold in euros had fallen to its 200 day moving average, through a bit, and today shot back above it. Should move higher -- gold, that is, not the euro.

Yen rose a little nothing today, to 121.35c/Y100. No big upside happening here any time soon.

STOCKS proved incompetent once more day to close above 13,080. Dow rose 39.55 (0.3%) to 13,074.74, while the S&P500 trailed right along beside, up 0.33% (4.66) to 1,413.94.

Stocks are stuck, but will most likely rise further into year end -- not that such a prospect induces me to own them.

Gold recovered $7.90 today to close Comex at $1,700.30. Silver gained 15.6 cents to end at 3303.9c.

Both silver & gold today posted lows about equal to yesterday's: 3252.8 & $1,685.90. That MIGHT be a double bottom, but only if they make good that threat by rising again tomorrow.

Gold's close was cosmetically thrilling -- above $1,700 -- but technically meaningless, falling short of $1,705 resistance. I would wax more enthusiastic if gold touched first off its 200 DMA (1,665) or 150 DMA (1,662).

Silver continues more photogenic than gold, and is only pennies blow its 20 DMA (3311c) & 50 DMA (3310c). Again, like talking to a man without driver's license or name tag, we'd like some more substantial proof that silver won't disappoint us again. Closing above 3320 tomorrow would help, as would gold respectably above $1,705.

Then we can worry & vex ourselves about something else.

Keep thine eyes on the prize! Silver & gold remain in a primary uptrend, and have another 5 - 10 years to rise. Next rally up in both metals began in August, & you are just now witnessing the last of the correction off that rally. Whether it begins this month or next, look for another big rally, one of those 1-1/2 to two year ones.

On 6 December 1833 was born in Virginia John Singleton Mosby who became one of the most successful cavalry raiders/partisans in the Confederate Army, the "Gray Ghost." Back in the late 1950s early 1960s before all things Southern were censored & blackened on TV there was even a TV show about him called "The Gray Ghost."

Doing the same favor for the Sioux that he was performing for the South, on 6 December 1862 Abraham Lincoln ordered 39 Indians hanged who had participated in the Sioux Uprising in Minnesota.

On 6 December 1921 Ireland's 26 southern counties became independent from the United Kingdom, forming the Irish Free State. WABI SABI

Here's a big gun I've been saving: Smith Farms in Cullman, Alabama. Other than plumb home-made, they make the very best bacon & breakfast sausage in the known world. They even sell bacon WITH the rind. Their sausage is hard to describe, delicious with a slightly acidulous finish. Never tasted any quite like it. Their ham is not bad either.

Their prices are way, way too low. Five lb. bacon is $17.95. A large bag of sausage (yes, it's packed in cloth bags or tubes), 2-1/2 - 3 lb., costs 9:95. A 16-17 lb. ham sliced is only $65. I simply can't make it through Christmas without Smith Farms.

Problem is, their website is not working, so you have to telephone them. (256) 737-0505, 1825 Fourth St. SW, Cullman, Alabama 35055. Best sausage in the world.

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
6-Dec-12 Price Change % Change
Gold, $/oz 1,700.30 7.90 0.47%
Silver, $/oz 33.04 0.16 0.47%
Gold/Silver Ratio 51.463 -0.004 -0.01%
Silver/Gold Ratio 0.0194 0.0000 0.01%
Platinum 1,599.20 16.50 1.04%
Palladium 695.55 9.60 1.40%
S&P 500 1,413.94 4.66 0.33%
Dow 13,074.74 39.55 0.30%
Dow in GOLD $s 158.96 -0.24 -0.15%
Dow in GOLD oz 7.69 -0.01 -0.15%
Dow in SILVER oz 395.74 -0.67 -0.17%
US Dollar Index 80.23 0.40 0.51%
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: 1,699.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,751.67 1,758.47 1,758.47
1/2 AE 0.50 865.98 891.98 1,783.95
1/4 AE 0.25 437.24 450.24 1,800.94
1/10 AE 0.10 179.99 184.34 1,843.42
Aust. 100 corona 0.98 1,657.03 1,667.36 1,701.04
British sovereign 0.24 399.94 403.94 1,715.99
French 20 franc 0.19 317.20 321.20 1,720.42
Krugerrand 1.00 1,722.79 1,737.79 1,737.79
Maple Leaf 1.00 1,709.00 1,729.00 1,729.00
1/2 Maple Leaf 0.50 841.01 883.48 1,766.96
1/4 Maple Leaf 0.25 420.50 450.24 1,800.94
1/10 Maple Leaf 0.10 168.20 183.49 1,834.92
Mexican 50 peso 1.21 2,031.93 2,048.93 1,699.37
.9999 bar 1.00 1,704.95 1,715.95 1,715.95
SPOT SILVER: 33.01      
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 23,530.65 23,780.65 33.26
US 40% silver 1/2s 0.30 9,546.20 9,721.20 32.95
100 oz .999 bar 100.00 3,301.00 3,351.00 33.51
10 oz .999 bar 10.00 335.10 337.60 33.76
1 oz .999 round 1.00 32.86 33.71 33.71
Am Eagle, 200 oz Min 1.00 34.61 35.26 35.26
SPOT PLATINUM: 1,599.20      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,624.20 1,664.20 1,664.20
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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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