The Moneychanger
Daily Commentary
Wednesday, 2 January a.d. 2013 Browse the commentary archive

They've worked me today like a rented mule, but before I run out of here, I'll let y'all have it. No, wait, that didn't sound right. Never mind.

Fell over the fiscal cliff, & lo! 'twas a mouse-burp deal as I foretold. Tee-tiny tax increase, not much spending cut, engine of inflation left un-overhauled, burning oil, & needing a ring job pretty badly.

WHY do y'all keep expecting something out of these people? They lie to you, steal from you, defraud you, give your money to banks & foreigners, destroy your culture, your institutions, and your nation, kick you in the mouth wearing cleats, and y'all STILL expect something good out of 'em. Listen, by now, the problem's not theirs, it's yours, if you expect anything other than lies, theft, and murder out of Washington.

US dollar index challenged last week's highs at 79.93, but failed. My guess is the NGM don't want the dollar to beat 80. Dollar index rose 9.1 basis points (0.12%) to 79.852).

Euro lost what the dollar gained. Down 0.11% to $1.3181 & looking toppy.

Surprise, surprise, the Yen took another tumble to another new low, down 0.62% to 114.,54 c/Y100 (US$1=Y87.31). Must be near a bottom.

Stocks went euphoric on the pixie-dust of Washington's deal. Dow rose 308.41 (2.35%) to 13,412.55, slightly higher than the last high and well above 13,300 resistance. S&P500 rose 36.23 (2.54%) to 1,462.42. Clearly, higher prices will come.

Not so clear when measuring these indices by gold. That Island Reversal pattern has been vitiated by filling in the gap, but today's action did not reverse the downtrend. I still reckon stocks have turned down against gold.

Gold gained $13.10 to $1,687.90 while silver whacked back a solid 77.9 cents (2.58%) to end at 3095.2c.

Those closes all but clinch a reversal in silver & gold. Yes, both need to build and step out smartly ahead. Only closes below 3100c tomorrow & $1685 would cast that reversal in shady doubt.

I didn't buy enough last week, or today. Stop waiting, start buying.

On 2 January 1492 the last Moorish stronghold in Spain, Granada, surrendered to the forces of King Ferdinand & Queen Isabella, finishing a near 800 year crusade to evict the Moors from Spain. Only because that had been completed was Isabella able to finance Christopher Columbus' voyage of discovery.

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
2-Jan-13 Price Change % Change
Gold, $/oz 1,687.90 13.10 0.78%
Silver, $/oz 30.95 0.78 2.58%
Gold/Silver Ratio 54.533 -0.974 -1.75%
Silver/Gold Ratio 0.0183 0.0003 1.79%
Platinum 1,565.10 26.40 1.72%
Palladium 707.25 4.60 0.65%
S&P 500 1,462.42 36.23 2.54%
Dow 13,412.55 308.41 2.35%
Dow in GOLD $s 164.26 7.50 4.78%
Dow in GOLD oz 7.95 0.36 4.78%
Dow in SILVER oz 433.33 -0.97 -0.22%
US Dollar Index 79.85 0.09 0.11%
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: 1,675.95      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,730.42 1,729.58 1,729.58
1/2 AE 0.50 854.22 879.87 1,759.75
1/4 AE 0.25 431.30 444.13 1,776.51
1/10 AE 0.10 177.54 181.84 1,818.41
Aust. 100 corona 0.98 1,634.55 1,644.77 1,677.99
British sovereign 0.24 394.52 398.52 1,692.94
French 20 franc 0.19 312.90 316.90 1,697.37
Krugerrand 1.00 1,704.44 1,719.44 1,719.44
Maple Leaf 1.00 1,685.95 1,705.95 1,705.95
1/2 Maple Leaf 0.50 829.60 871.49 1,742.99
1/4 Maple Leaf 0.25 414.80 444.13 1,776.51
1/10 Maple Leaf 0.10 165.92 181.00 1,810.03
Mexican 50 peso 1.21 2,004.36 2,021.36 1,676.50
.9999 bar 1.00 1,681.82 1,692.82 1,692.82
SPOT SILVER: 30.94      
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 22,261.53 22,511.53 31.48
US 40% silver 1/2s 0.30 8,934.08 9,109.08 30.88
100 oz .999 bar 100.00 3,093.50 3,143.50 31.44
10 oz .999 bar 10.00 314.35 316.85 31.69
1 oz .999 round 1.00 30.79 31.64 31.64
Am Eagle, 200 oz Min 1.00 32.54 33.19 33.19
SPOT PLATINUM: 1,565.10      
Plat. Platypus 1.00 1,590.10 1,630.10 1,630.10
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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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