The Moneychanger
Daily Commentary
Wednesday, 16 January a.d. 2013 Browse the commentary archive

Fairly quiet day across markets.

US dollar index rose a whopping 4 basis points to close 79.811, still not effectively piercing the 79.80-.90 barrier. Dollar's treading water, & without a life jacket will go under. But central banks are in the life-jacket business.

Euro made an inchmeal push down, losing 0.13% to $1.3290. Uptrend still in force.,

Yen rose 0.46% today to 113.14. I believe we've seen the end of that waterfall.

US$1 =Y88.39=E0.7524=0.031732 oz silver=0.000591 oz gold.

Stocks couldn't agree today, not a good sign for them. Dow fell 23.6 to 13,511.23 while the S&P500 gained a nothing 0.29 to 1,472.63. Plenty more upside left for stocks in their final dance with death, but having a hard time penetrating 13,600.

Gold & silver didn't agree today, either, but in the past that has often led to good things on the morrow. Silver gained 1.6 cents to 3151.4c while gold lost a measly 70 cents to $1,682.70.

Gold is trapped in a $1,675 - $1,685 range established the last two days. Any close inside that range means nothing, and a close above or below will take gold that same direction for a few days. Down below $1,665 & $1,655 remain firm.

Like gold, silver has trapped itself in a range the past two days, 3150 above and 3100 below.

If they break to the upside, silver & gold will likely jump a long ways. I would buy the breakout, which requires silver above 3200c & gold over $1,695.

On 16 January 1883 the US civil service commission was established. Before that they had the same system we have in our county road commission, the spoils system. When a new crop of politicians is elected, they fire all their predecessor's friends & kin & hire their own. I think this is a fine way to run government, mainly because it prevents a mob of non-elected bureaucrats from ruling the country. Besides, the longer they stay, the more corrupt and arrogant & oppressive they become. Turnover keeps bureaucrats from building nests.

Another mistake: on 16 January 1919 the 18th or Prohibition amendment was ratified, and took effect the same date in 1920. Prohibition kept nobody sober, shifted the public taste from relatively harmless beer to hard liquor, & established crime syndicates by making liquor trafficking so lucrative. Say, does that sound like any other prohibition we know of today?

I really have a gutful of all this gun control talk. Some of gun ownership's "friends" are stupider than their enemies. Get this straight right now: owning guns isn't about hunting, target practice, sport shooting, or skeet. Owning guns is about having something to use against the government when they come to put your family up against the wall and shoot them. Ask the Russians, Germans, Chinese, and anybody else in the world. The only thing preventing total tyranny right now in the USA is that there are 300 million guns out there, & government doesn't know where they are.

Only two (2) gun organizations get this: Gun Owners of America & Jews for the Preservation of Firearms Ownership. Rest of 'em just don't get it.

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
16-Jan-13 Price Change % Change
Gold, $/oz 1,682.70 0.70 0.04%
Silver, $/oz 31.51 0.02 0.05%
Gold/Silver Ratio 53.395 -0.005 -0.01%
Silver/Gold Ratio 0.0187 0.0000 0.01%
Platinum 1,692.20 4.20 0.25%
Palladium 725.70 13.10 1.84%
S&P 500 1,472.63 0.29 0.02%
Dow 13,511.23 -23.60 -0.17%
Dow in GOLD $s 165.98 7.50 4.73%
Dow in GOLD oz 8.03 0.36 4.73%
Dow in SILVER oz 428.74 -0.97 -0.23%
US Dollar Index 79.81 0.04 0.05%
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: 1,679.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,728.21 1,735.76 1,735.76
1/2 AE 0.50 856.04 884.68 1,769.35
1/4 AE 0.25 428.02 450.74 1,802.94
1/10 AE 0.10 176.24 183.91 1,839.05
Aust. 100 corona 0.98 1,634.72 1,648.72 1,682.03
British sovereign 0.24 395.35 399.35 1,696.49
French 20 franc 0.19 313.56 317.56 1,700.92
Krugerrand 1.00 1,709.73 1,724.73 1,724.73
Maple Leaf 1.00 1,689.50 1,704.50 1,704.50
1/2 Maple Leaf 0.50 965.71 881.74 1,763.48
1/4 Maple Leaf 0.25 428.27 449.27 1,797.07
1/10 Maple Leaf 0.10 178.03 183.07 1,830.66
Mexican 50 peso 1.21 2,008.61 2,025.61 1,680.03
.9999 bar 1.00 1,685.38 1,696.38 1,696.38
SPOT SILVER: 31.46      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 30.50 34.00 0.04
VG+ Peace dollar 0.77 29.00 33.00 0.04
90% silver coin bags 0.72 22,815.65 23,030.15 32.21
US 40% silver 1/2s 0.30 9,236.45 9,311.45 31.56
100 oz .999 bar 100.00 3,146.00 3,186.00 31.86
10 oz .999 bar 10.00 319.60 322.10 32.21
1 oz .999 round 1.00 31.56 32.01 32.01
Am Eagle, 200 oz Min 1.00 32.71 33.71 33.71
SPOT PLATINUM: 1,692.20      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,717.20 1,757.20 1,757.20
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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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