The Moneychanger
Daily Commentary
Tuesday, 23 April a.d. 2013 Browse the commentary archive

R.I.P, Howard Phillips. At age 72 he passed peacefully away on 20 April. In his long life working in and around politics, he was the anomaly: he always put principles before politics or personal advancement. Nixon named him head of the Office of Economic Opportunity, then welched on his promise to shut it down, so Howard resigned. In 1974 he left the Republican party because it had failed to uphold conservative principles.

All of these things mark Howard Phillips as an exceptional man, but he stands out in my heart for another reason. When the IRS was trying to bury me because I had started a gold & silver bank, and the whole world was running away from me as fast as their chicken legs could carry them, Howard Phillips never did. He was a man of magnificent integrity.

TODAY'S MARKETS:

Another tedious day.

Stocks turned and rallied largely. Dow rose 1.05% (152.29) to 14,719.46 while the S&P500 rose 1.04% (16.28) to 1,578.78. Both closed above their 20 day moving averages. Unless the Dow can close above the last high (14,887.51) this will remain a reaction in a downtrend from that high.

Dow in gold broke its five day downtrend by rising today to 10.42 oz (G$215.40 gold dollars). This doesn't alter the downtrend, only zigs against its zag -- normal reaction. Dow in Silver rose, too, to 641.93 ounces (+2.3%). It's more equivocal than gold, but still appears to have topped.

US dollar Index rose to 83.005, up 35.2 basis points or 0.45%. Dollar got a boost overnight in European trading, jumping from 82.50 to 82.95 in half an hour while all the hyenas in New York were still sleeping. In US trading it oscillated from 82.85 to 83.05. A strong close above 83 takes the dollar into a new upleg.

Euro ate something that didn't agree with it & looks sick. Closing at $1.3000 (down 0.49%) today, it's below its 50 DMA ($1.3058) and barely above its 20 DMA ($1.2985). Nor is the 200 DMA far off, at $1.2903. A fall through $1.3000, which looks certain for tomorrow, with scatter all the euros fans & attract the short sellers.

Yen remains flat, down today 0.18% at 100.57 cents/Y100.

Today gold lost $12.40 (0.9%) to $1,408.60 but silver stumbled 50.7 cents (2.2%) to 2281.3c.

Gold today ran out of shorts covering, hit $1,427, and busted its nose on the wall. Well, it wasn't that bad since gold found footing about $1,406.70 and didn't offer to break lower. This is that first reaction after five rising days, as I mentioned yesterday. Gold is trying to turn up, at least the MACD is, but lets see how it deals with more hostility in a correction. Can it hold above $1,400?

Silver is flirting with last week's 2255.6c low. Today it hit 2265.9c, dropped 50.7c, and volume rose. Not a promising mixture. Could get slammed hard tomorrow. Of course, how it withstands that will tell us a lot about how long this pain will last.

If y'all like me don't like to bathe your body in chemicals (aluminum chlorhydrate & propylene glycol), here's a solution for deodorant: zinc oxide. Right, just plain zinc oxide in petrolatum, about $1.50 a tube. Rub it under your arms and unless you are working way down in a coal mine, it will keep you smelling sweet for days and days. When it stops, do it again. Best to rub it in at night, then wash it off next morning.

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
23-Apr-13 Price Change % Change
Gold, $/oz 1,408.60 -12.40 -0.87%
Silver, $/oz 22.81 -0.51 -2.17%
Gold/Silver Ratio 61.745 0.811 1.33%
Silver/Gold Ratio 0.0162 -0.0002 -1.31%
Platinum 1,416.80 -19.00 -1.32%
Palladium 672.15 -8.60 -1.26%
S&P 500 1,578.78 16.28 1.04%
Dow 14,719.46 152.29 1.05%
Dow in GOLD $s 216.01 7.50 3.60%
Dow in GOLD oz 10.45 0.36 3.60%
Dow in SILVER oz 645.22 20.56 3.29%
US Dollar Index 83.01 0.35 0.43%
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: 1,411.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,456.26 1,461.90 1,461.90
1/2 AE 0.50 722.68 746.12 1,492.24
1/4 AE 0.25 364.86 380.12 1,520.46
1/10 AE 0.10 154.41 162.28 1,622.77
Aust. 100 corona 0.98 1,374.86 1,388.86 1,416.92
British sovereign 0.24 334.17 344.17 1,462.05
French 20 franc 0.19 263.45 266.45 1,427.17
Krugerrand 1.00 1,440.73 1,455.73 1,455.73
Maple Leaf 1.00 1,421.10 1,436.10 1,436.10
1/2 Maple Leaf 0.50 811.38 740.83 1,481.66
1/4 Maple Leaf 0.25 359.83 377.47 1,509.88
1/10 Maple Leaf 0.10 149.58 153.81 1,538.10
Mexican 50 peso 1.21 1,690.16 1,706.16 1,415.08
.9999 bar 1.00 1,416.04 1,427.04 1,427.04
SPOT SILVER: 22.92      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 28.50 32.00 41.83
VG+ Peace dollar 0.77 25.50 29.00 37.91
90% silver coin bags 0.72 18,961.80 19,961.80 27.92
US 40% silver 1/2s 0.30 6,392.65 6,762.65 22.92
100 oz .999 bar 100.00 2,292.00 2,367.00 23.67
10 oz .999 bar 10.00 234.20 239.20 23.92
1 oz .999 round 1.00 23.02 23.92 23.92
Am Eagle, 200 oz Min 1.00 24.17 27.42 27.42
SPOT PLATINUM: 1,416.80      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,441.80 1,481.80 1,481.80
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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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