The Moneychanger
Weekly Commentary
Friday, 26 April a.d. 2013 Browse the commentary archive
Here's the weekly scorecard:
  19-Apr-13 26-Apr-13 Change % Change
Silver, cents/oz. 2,295.50 2,375.80 80.30 3.5
Gold, dollars/oz. 1,395.30 1,453.60 58.30 4.2
Gold/silver ratio 60.784 61.184 0.400 0.7
Silver/gold ratio 0.0165 0.0163 -0.0001 -0.7
Dow in Gold Dollars (DIG$) 215.53 209.23 -6.30 -2.9
Dow in gold ounces 10.43 10.12 -0.30 -2.9
Dow in Silver ounces 633.74 619.27 -14.47 -2.3
Dow Industrials 14,547.51 14,712.55 165.04 1.1
S&P500 1,555.25 1,582.24 26.99 1.7
US dollar index 82.73 82.50 -0.23 -0.3
Platinum 1,423.30 1,475.20 51.90 3.6
Palladium 675.90 680.85 4.95 0.7

It was a better week for silver & gold, but turmoil hath not yet passed. Stocks rose, but notice that the Dow in Gold and the Dow in Silver sank, meaning that silver & gold rose faster than stocks, a portentous outcome. And the US Nice Government Men are doing a great job of keeping the dollar down, while carrying like Atlas the whole plumb-broke world on their shoulders.

Today all the stock indices except the Potemkin Dow declined. Dow rose an infinitesimal 11.75 (0.08%) to 14,712.55, but "it finished the week higher," reflecting credit on the Nice Government Men. S&P declined slightly, down 2.92 (0.18%) to 1,582.24.

Both indices are a hard to parse here, but both are correcting. Both ended this week above their 20 day moving averages, which leaves their momentum up temporarily, although technically both are in a down trend (lower low & lower high in sequence). You all may think I'm crazy, but as sure as ax heads don't float, stocks will yet this year come down with a mighty crash. I am not tempted to share that experience.

Dow in Gold rose a little today, up 0.95% to 10.12 oz (G$209.20 gold dollars) but remains in a down trend. 20 DMA stands at 9.90. Dow in Silver rose 2.34% to 619.27 oz, but also still trendeth down. Breach of 600.00 oz. will accelerate the fall.

Miss not, neither pass by, what this signifieth: the trend of stocks gaining value against silver & gold has been broken in favor of silver & gold. I remind y'all that when stocks peaked against gold in August 1999, that was our sign & warning that stocks were peaking. The Dow did not top until January 2000 at 11,722, but the Dow in Gold never reached higher than that August 1999 high. Dow/Gold and Dow/Silver are VERY reliable forward indicators for stocks and metals.

Currencies are moving sideways. Yen closed up today 1.33% at 102.05 cents/Y100, and pierced but closed not above its 20 DMA (102.33). Clearly the loonies who manage the yen are managing it lower. And speaking of loonies, the euro moved a little today, up 0.13% to $1.3028 from yesterday's $1.3010, & closed above its 20 DMA ($1.3015). Doesn't look ready to run away anywhere. Next big move will most likely be gravity-ward.

Yesterday silver & gold soared, today they glided down. Gold lost $8.20 & closed Comex at $1,453.60. Silver gave back 38.2 cents (of yesterday's 130.7 cent gain) to close Comex at 2375.8c.

Both silver & gold posted the first half of key reversals today, a new intraday high for the move with a close lower than yesterday's. A close on Monday lower than today's would forecast lower prices.

All here hinges on which of two outcomes ensures, (1) a recovery above the cliff metals fell from or (2) a fall to a double bottom or lower low. This week gold merely recovered a bit more than 50% of its fall from 12 April, silver about 45%. So far, that's only a normal correction, & leans toward yet another drop.

To repair the damage done by the great fall, gold must close above $1,550 without any equivocation. Silver must close above 2950c.

Will silver & gold plunge to lower lows? Three witnesses argue against that, the Dow/Gold, the Dow/Silver, & the gold/silver ratio. Stocks have turned down against metals, and the gold/silver ratio has turned lower. All three of those are aligned for strength in silver & gold. By the way, the gold/silver ratio is still high enough to make swaps from gold into silver very attractive.

I no more know how long it will take silver & gold to recover than I know how to shear a hog. May is often not a happy month for metals, yearly lows often fall in June or early July, and August cyclically they turn & begin a rally into the fall. Generally. Usually. Except when they don't.

I am certain of this: the gold & silver primary uptrend (bull market) has not ended, any more than the primary downtrend (bear market) in stocks has ended. These are the PRIMARY trends, and despite up or down phases, over the years these trends will express themselves plainly.

QUOTATION OF THE WEEK: "There are some things worse than hanging and extermination. We reckon giving up the right of self-government one of those things." -- Jefferson Davis, first president of the Confederacy.

Another Health Tip: If you have gum disease or tooth problems, check out Dr. Mark Manhart's website, I interviewed him for my newsletter, & you can read that at Several readers reported back astounding healing after using his products. I use them myself, and best of all, they're not expensive. Beware, though, Dr. Manhart is a kind of dental heretic. Check him out.

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
26-Apr-13 Price Change % Change
Gold, $/oz 1,453.60 -8.20 -0.6
Silver, $/oz 23.76 -0.38 -1.6
Gold/Silver Ratio 61.184 -0.335 -0.5
Silver/Gold Ratio 0.0163 -0.0003 -1.6
Platinum 1,475.20 12.40 0.8
Palladium 680.85 0.65 0.1
S&P 500 1,582.24 -2.92 -0.2
Dow 14,712.55 11.75 0.1
Dow in GOLD $s 209.23 1.36 0.7
Dow in GOLD oz 10.12 0.07 0.7
Dow in SILVER oz 619.27 10.29 1.7
US Dollar Index 82.50 -0.28 -0.3
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SPOT GOLD: 1,458.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,505.17 1,511.01 1,511.01
1/2 AE 0.50 746.97 771.18 1,542.36
1/4 AE 0.25 377.13 392.88 1,571.53
1/10 AE 0.10 159.60 167.73 1,677.28
Aust. 100 corona 0.98 1,421.04 1,435.04 1,464.03
British sovereign 0.24 345.39 355.39 1,509.73
French 20 franc 0.19 272.30 275.30 1,474.57
Krugerrand 1.00 1,490.59 1,505.59 1,505.59
Maple Leaf 1.00 1,468.50 1,483.50 1,483.50
1/2 Maple Leaf 0.50 838.64 765.71 1,531.43
1/4 Maple Leaf 0.25 371.92 390.15 1,560.60
1/10 Maple Leaf 0.10 154.60 158.98 1,589.77
Mexican 50 peso 1.21 1,747.82 1,763.82 1,462.90
.9999 bar 1.00 1,463.60 1,474.60 1,474.60
SPOT SILVER: 23.91      
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 19,451.58 20,451.58 28.60
US 40% silver 1/2s 0.30 6,683.23 7,053.23 23.91
100 oz .999 bar 100.00 2,390.50 2,465.50 24.66
10 oz .999 bar 10.00 244.05 249.05 24.91
1 oz .999 round 1.00 24.01 24.91 24.91
Am Eagle, 200 oz Min 1.00 25.16 28.41 28.41
SPOT PLATINUM: 1,475.20      
Platinum Platypus 1.00 1,500.20 1,540.20 1,540.20
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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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