The Moneychanger
Daily Commentary
Monday, 28 January a.d. 2013 Browse the commentary archive

Nothing much happened today beyond the foreseeable. Stocks fell, silver & gold fell a little further, dollar was flat, & the other scabby fiat currencies as well.

Friday (25 January) I somehow posted the wrong closes for the Dow & S&P500. Correct closes were Dow 13895.98 (up 70.65) and S&P500 at 1,502.96 (up 8.14). I have no idea how that error crept in. Please forgive me.

That's the build-up for quoting today's drops in stocks: the Dow at 13,881.93 down 14.05 (0.1%) & the S&P500 down 2.78 (0.18%) at 1,500.18. Only 4 or 5 times in the last 10 years have stocks been more highly oversold. They stand at their upper trendline resistance. They've sketched out a massive head and shoulders top that stretches back to 1996, and they've both lately reached the point of rising wedge formations.

Sure, maybe they can rise from here -- but don't bet on it.

Dollar, yen, & euro were all flat today. US dollar index closed 79.804, basically unchanged from Friday. Euro fell a miniscule 0.07% to $1.3450, while the yen rose 0.07% to 110.17 cents/Y100.

These gappy cahrts are hard to read. Euro gapped up on Friday, then traded in almost exactly the same range today, leaving a little isolated island up there. Must fill in that gap or advance sharply or it runs the risk of breaking down.

Be certain the world's big central bankers are furious with the Japanese and their competitive devaluation. They don't know much, but they remember the currency wars of the 1930s & would like to avoid them.

US$1=Y90.85=E0.7435=0.325139 oz Ag=0.000605 oz Au.

Gold fell a little further, $3.70, to $1,652.90. Silver lost 42.4 cents to 3075.6.

Today gold's range touched the uptrend line from June '12 and the downtrend line from the November 12 high. In fact, it touched them exactly where they crossed.

Try to picture a falling wedbge in your mind. Gold breaks out of that wedge about 2/3 of the way down, rallies to $1,698, then falls back, but (so far) only for a Kiss Back to the downtrend line it has just broken trhough upward. If you can't picture that, go see

Frustrating as this is, it doesn't point to a fall to the earth's core, but rather, another rise. Worst hand raised against that is gold's fall beneath its 200 day moving average on Friday. Needs to fix that quickly.

Silver chart looks much the same. See However, silver hasn't kissed back all the way to that short term down trend line, and remains above its 200 DMA (3065c), but not by much. About 3045c tomorrow will lie the strong uptrend line from the June '12 low.

I was going back over some trades today from 2008 - 2009. I remember buying gold at $858 with my heart in my mouth in December. In May 2009 I was still nervous at 978.50, but bought anyway. And in November 2009, 17.098 silver looked awfully risky, but still I bought. Point is, markets always look risky, and exactly the right time to buy is the time your mind, body, & intestines will scream loudest. And sometimes, they're right.

Life comes with no guarantees, unless you are a slave.

I found out something unusual about my new book, At Home in Dogwood Mudhole. People keep writing me that they're reading the book outloud with wife or husband, or reading it to their children. One of my sons has been reading it to his two boys, Gus (6) & Felix (4). Thinking, I reckon, on something he had heard at school, he stopped my son Christian while he was reading and asked, "Dad, were Mama Sue & Big Daddy alive in colonial times?" I didn't know we looked THAT old.

Y'all can still get copies of AHIDM at

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
28-Jan-13 Price Change % Change
Gold, $/oz 1,652.90 -3.70 -0.22%
Silver, $/oz 30.77 -0.42 -1.36%
Gold/Silver Ratio 53.725 0.612 1.15%
Silver/Gold Ratio 0.0186 -0.0002 -1.14%
Platinum 1,661.20 -32.70 -1.93%
Palladium 739.80 -0.45 -0.06%
S&P 500 1,500.18 -2.78 -0.18%
Dow 13,881.93 -14.05 -0.10%
Dow in GOLD $s 173.61 7.50 4.51%
Dow in GOLD oz 8.40 0.36 4.51%
Dow in SILVER oz 451.21 5.68 1.28%
US Dollar Index 79.80 -0.00 -0.00%
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: 1,653.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,696.80 1,709.20 1,709.20
1/2 AE 0.50 842.93 871.14 1,742.28
1/4 AE 0.25 421.46 443.84 1,775.35
1/10 AE 0.10 173.54 181.09 1,810.91
Aust. 100 corona 0.98 1,612.95 1,626.95 1,659.81
British sovereign 0.24 389.30 393.30 1,670.79
French 20 franc 0.19 308.76 312.76 1,675.22
Krugerrand 1.00 1,685.22 1,700.22 1,700.22
Maple Leaf 1.00 1,663.80 1,678.80 1,678.80
1/2 Maple Leaf 0.50 950.94 868.25 1,736.49
1/4 Maple Leaf 0.25 421.72 442.39 1,769.57
1/10 Maple Leaf 0.10 175.30 180.26 1,802.64
Mexican 50 peso 1.21 1,983.85 2,000.85 1,659.49
.9999 bar 1.00 1,659.59 1,670.59 1,670.59
SPOT SILVER: 30.82      
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 22,461.73 22,819.23 31.92
US 40% silver 1/2s 0.30 9,046.18 9,121.18 30.92
100 oz .999 bar 100.00 3,081.50 3,121.50 31.22
10 oz .999 bar 10.00 313.15 315.65 31.57
1 oz .999 round 1.00 30.92 31.37 31.37
Am Eagle, 200 oz Min 1.00 32.07 33.07 33.07
SPOT PLATINUM: 1,661.20      
Plat. Platypus 1.00 1,686.20 1,726.20 1,726.20
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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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