The Moneychanger
Daily Commentary
Monday, 17 December a.d. 2012 Browse the commentary archive

What can anyone say about the terrible murders in Newtown, Connecticut? I heard the principal & teachers interposed themselves between the shooter & the children -- unimaginable, selfless heroism. Of course, if schools weren't by law "Gun Free Zones," some of those teachers might have been armed, & might have interposed return fire to kill the shooter before he murdered all those children.

No words. I have no words.


Maybe rumors of a deal on the FC (I can no longer bring myself to use the cliché) ramped up Wall Street today, or maybe they're taking their Christmas toot early, but stocks rose mightily. Dow gained 0.76% (100.38) to 13,235.39 and the S&P500 gained a massy 1.19% (16.78) to 1,430.36.

However the Dow still could not climb over 13,300 resistance. I 'spect it will, though, as a mouth-foaming, frenzy takes over here at year end & takes over the foresight-challenged minds. Y'all have to keep on resisting the bait, because buried in it lurks a hook.

US dollar index fell mildly, down 6.7 basis points (0.09%), but that doesn't speak as loudly as the new low for the move at 79.50, taking out the old low at 79.57. No, no, it didn't follow through to fall further, but the act has been done, however long consummation delays.

Euro barely moved today, down 0.02% to $1.3164. Remains above the downtrend line, but whenever it edged toward $1.3200, it wilted like a bashful boy at a barn dance. Probably has somewhat higher prices in it, but what loony would buy it for that, only to watch it collapse a few weeks later?

Just to prove that no market ever drops so low that it can't drop further, the Japanese yen make a new low for the move today, lost 0.48%, and ended at 119.24 cents/Y100. Got to be making the Fed's NGM nervous. It's more oversold than hot dogs at Coney Island.

Silver & gold feel really tired. Gold gained $1.20 today to end Comex comatose at $1,697. Silver lost 1.7 cents to close 3220.6c.

Once again, gold validated that support running slightly upward from $1,672.50 (November's low) to $1,684.10 (December's low). Hit that line about $1,684.40 & bounced back toward $1,700. Today's high at $1,699.09 does not rank as a grounds for pride.

Silver left little doubt about its intentions today with a lower low for the move at 3206c, third day of lower lows since it broke that support line about 3250c.

But it isn't exactly collapsing on a skinny daily range of 30.5c (yes, the high came at 3236.5). Silver has just gone dead in the water. If 3200c is broken, silver will make a quick spike down.

Watching. That's all I know to do when markets act like this. Just be patient until they tip their hand. Won't be long.


On 17 December 1969 an estimated 50 million viewers watched singer Tiny Tim marry his fiancée, Miss Vicky, on the Tonight Show. Not a one of those 50 million could tell you WHY he watched.

Y'all still barely have time to order At Home in Dogwood Mudhole and get it by Christmas, but you'll have to use either priority or express mail. Coincidentally enough, both are available at our website,

Here's the latest reader response, from someone who had ordered Christmas copies: "I've received my first copy of AHIDM and it is already stained with tears of laughter, been, wine, and various un-identifiable solid products that appear to be in the ham sandwich family. When one guffaws, one tends to spew one's sandwich, if you hadn't noticed. Where are my other four copies? Santa is depending on you!"

I'm going to tell y'all, it is just that good.

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
17-Dec-12 Price Change % Change
Gold, $/oz 1,697.00 1.20 0.07%
Silver, $/oz 32.21 -0.02 -0.05%
Gold/Silver Ratio 52.692 0.065 0.12%
Silver/Gold Ratio 0.0190 -0.0000 -0.12%
Platinum 1,609.30 -10.00 -0.62%
Palladium 697.20 -3.60 -0.51%
S&P 500 1,430.36 16.78 1.19%
Dow 13,235.39 100.38 0.76%
Dow in GOLD $s 161.23 1.13 0.70%
Dow in GOLD oz 7.80 0.05 0.70%
Dow in SILVER oz 410.96 3.33 0.82%
US Dollar Index 79.57 -0.07 -0.08%
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: 1,696.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,747.70 1,756.19 1,756.19
1/2 AE 0.50 864.86 890.82 1,781.64
1/4 AE 0.25 436.67 449.65 1,798.61
1/10 AE 0.10 179.75 184.10 1,841.03
Aust. 100 corona 0.98 1,654.89 1,665.20 1,698.84
British sovereign 0.24 399.43 403.43 1,713.79
French 20 franc 0.19 316.79 320.79 1,718.22
Krugerrand 1.00 1,720.56 1,735.56 1,735.56
Maple Leaf 1.00 1,706.80 1,726.80 1,726.80
1/2 Maple Leaf 0.50 839.92 882.34 1,764.67
1/4 Maple Leaf 0.25 419.96 449.65 1,798.61
1/10 Maple Leaf 0.10 167.98 183.25 1,832.54
Mexican 50 peso 1.21 2,029.30 2,046.30 1,697.19
.9999 bar 1.00 1,702.74 1,713.74 1,713.74
SPOT SILVER: 32.20      
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 22,983.68 23,233.68 32.49
US 40% silver 1/2s 0.30 9,305.78 9,480.78 32.14
100 oz .999 bar 100.00 3,219.50 3,269.50 32.70
10 oz .999 bar 10.00 326.95 329.45 32.95
1 oz .999 round 1.00 32.05 32.90 32.90
Am Eagle, 200 oz Min 1.00 33.80 34.45 34.45
SPOT PLATINUM: 1,609.30      
Plat. Platypus 1.00 1,634.30 1,674.30 1,674.30
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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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