The Moneychanger
Weekly Commentary
Thursday, 28 March a.d. 2013 Browse the commentary archive
Here's the weekly scorecard:
  22-Mar-13 28-Mar-13 Change % Change
Silver, cents/oz. 2,866.60 2,829.20 -37.40 -1.3
Gold, dollars/oz. 1,606.20 1,594.80 -11.40 -0.7
Gold/silver ratio 56.032 56.369 0.340 0.6
Silver/gold ratio 0.0178 0.0177 -0.0001 -0.6
Dow in Gold Dollars (DIG$) 186.77 188.97 2.20 1.2
Dow in gold ounces 9.04 9.14 0.11 1.2
Dow in Silver ounces 506.25 515.29 9.04 1.8
Dow Industrials 14,512.03 14,578.54 66.51 0.5
S&P500 1,556.89 1,569.19 12.30 0.8
US dollar index 82.37 82.98 0.61 0.7
Platinum 1,580.70 1,571.20 -9.50 -0.6
Palladium 759.75 767.10 7.35 1.0

We will be closed tomorrow to observe Good Friday, so I am giving y'all the weekly summary today.

Parsing this market is almost as easy as milking a ticklish cat. Nothing works exactly as it ought to work, and hints, whispers, & innuendos on the chart keep coming to nothing, or continue senselessly like MacBeth's description of life.

This week silver fell a little, whether for good or ill remains to be revealed. Gold fell too, & is in the same case. Stocks rose modestly, & today the S&P500 finally bested its 1,565.15 high. And proving who is telling the tale, palladium rose this week.

Mayhap I am deceived, but right now I perceive events as a storm circling around the bank bailout/depositor-backstabbing in Cyprus. Whirling around in this storm are exchange rates which the Nice Government Men are at their wits' end, frantically trying to keep the euro from tanking & the US dollar from soaring. Flying by go US bond yields, then stock indices which must not show signs of fear as they fly high. Silver & gold must be pressed down further, bank runs quelled, & meanwhile all the news must be carefully managed to make it appear, "The lark's on the wing/ the snail's on the thorn/Central bankers are in heaven/All's right with the world."

To the point. The US dollar closed today 24.1 basis points higher than this time yesterday, up 0.29% at 82.98. True, it backed away from its over-83 stance, but now appears headed higher anyway as long as it remains above 82.7.

In this Best of All Possible Financial Worlds, the euro sneaked above $1.2818 today, rising 0.30% and -- somebody hopes -- restored hopes murdered by yesterday's plunge through $1.2800. Oh, how suspicious I am, & thus expect to see a lower euro come Easter Monday.

The Yen gained 0.33% to 106.22 cents/Y100. Inscrutable & untouchable, far's I'm concerned.

STOCKS encouraged their cheerleaders today with new highs in the Dow ($14,585.10) and, finally, the S&P500 (1,570.28). It don't get no better than this. Wait? What did I just say? Maybe it doesn't.

Dow gained 52.38 (0.36%) to 14,578.54 & the S&P gained 6.34 (0.41%) to 1569.19, but the chart patterns abide unchanged: megaphone widening out to gobble down investors' hopes, and a market stalled for the last 11 days, unable to make meaningful headway despite the token new tops.

Considering my views on the stock market, y'all can understand why the Federal Reserve won't hire me for the Board of Governors.

Ya'll know that I am watching more closely, as more worthy of attention. the Dow in Gold and the Dow in Silver. Both have stalled, both are tracing out tops, painfully slow. Those tops are also megaphones or Jaws of Death.

Dow in Gold closed at 9.13 oz (G$188.73 gold dollars) but in spite of a new Dow high did not reach a new high. Same holds true for the S&P500 in gold.

Dow in Silver did make a new high today, at 513.87 oz. This brings it up against long term overhead resistance. Could mark the top of the move.

Gold lost $11.40 to close Comex at $1,594.80. the 1,593.90 low came a bit higher than yesterday's $1,591.45. Those buyers at that low level just won't go away. Gold now has touched the same $1,591 low, & it's beginning to look like an impermeable bottom -- unless it proves not to be.

Silver lost 28.5 cents to 2829.2c. Today's 2820c low makes a double bottom with yesterday's 2813.9c. Today silver did not rise strongly off its low as it did yesterday.

Silver vexed every optimist by falling this week below the 2840c bottom boundary of its 26 trading day range. That's not all bad, since it might mark the end of the correction and preparation for turning up into a rally. That, however, is only my anticipating. Gold broke out of a pennant, rose weakly, and now has rolled over, BUT refuses to close below its 20 DMA ($1,592.39).

For the nonce, central bankers sit in the catbird seat, but their time is short. Unless cause & effect have ceased in this world, the Federal Reserve (which is not "federal" and hath no "reserve" at all) cannot print $85 billion month in and month out without the inflation at some point ballooning prices. More, the entire world monetary system has inflation poisoning bulging out everywhere. And inflation, of course, is what drives the silver & gold markets.

Y'all just be patient. If silver drops below 2800 cents, wait a day and buy some. Ditto for gold below $1,570. Up above, if gold closes through $1,625 and silver through 2950c, buy some.

May God bless you all at Easter and always with all Christ's tender mercies.

Y'all enjoy your weekend!

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-Mar-13 Price Change % Change
Gold, $/oz 1,594.80 -11.40 -0.7
Silver, $/oz 28.29 -0.29 -1.0
Gold/Silver Ratio 56.369 -0.397 -0.7
Silver/Gold Ratio 0.0177 -0.0002 -1.0
Platinum 1,571.20 -8.60 -0.5
Palladium 767.10 -0.05 -0.0
S&P 500 159.19 6.34 4.1
Dow 14,578.54 52.38 0.4
Dow in GOLD $s 188.97 2.03 1.1
Dow in GOLD oz 9.14 0.10 1.1
Dow in SILVER oz 515.29 6.97 1.4
US Dollar Index 82.98 24.10 40.9
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: 1,596.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,643.21 1,650.40 1,650.40
1/2 AE 0.50 817.90 844.36 1,688.72
1/4 AE 0.25 412.94 430.16 1,720.66
1/10 AE 0.10 167.57 175.26 1,752.60
Aust. 100 corona 0.98 1,552.76 1,566.76 1,598.41
British sovereign 0.24 378.17 388.17 1,648.96
French 20 franc 0.19 298.14 301.14 1,612.97
Krugerrand 1.00 1,616.06 1,631.06 1,631.06
Maple Leaf 1.00 1,606.90 1,621.90 1,621.90
1/2 Maple Leaf 0.50 918.22 838.37 1,676.75
1/4 Maple Leaf 0.25 407.21 427.17 1,708.68
1/10 Maple Leaf 0.10 169.27 174.06 1,740.62
Mexican 50 peso 1.21 1,915.60 1,931.38 1,601.88
.9999 bar 1.00 1,602.49 1,613.49 1,613.49
SPOT SILVER: 28.38      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 30.50 34.00 44.44
VG+ Peace dollar 0.77 28.00 31.00 40.52
90% silver coin bags 0.72 21,292.70 21,617.70 30.23
US 40% silver 1/2s 0.30 8,003.35 8,373.35 28.38
100 oz .999 bar 100.00 2,838.00 2,878.00 28.78
10 oz .999 bar 10.00 288.80 289.80 28.98
1 oz .999 round 1.00 28.48 28.93 28.93
Am Eagle, 200 oz Min 1.00 29.63 30.73 30.73
SPOT PLATINUM: 1,571.20      
Platinum Platypus 1.00 1,596.20 1,636.20 1,636.20
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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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