The Moneychanger
Daily Commentary
Thursday, 23 May a.d. 2013 Browse the commentary archive

I reckon FEAR, old rank, steaming FEAR, sent Salvador Dali and his irrationality packing. Looks like Bodacious Ben's peeping & muttering satisfied nobody, & what's worse, scared the market AND the horses.

Japanese Nikkei stock index dropped -- gag! -- 7.3% while we slept in Tennessee, & the Hong Kong Hang Seng index fell over 2%. The wave of selling washed clean around the globe: German DAX down 2.1%, French CAC down 2.07%, Euro Stoxx down 2.12%, London FTSE down 2.1%.

Let us always remember & never forget that yesterday the S&P500 & the Dow posted the first half of a Key Reversal (intraday rise to new high with lower close). So. . .what happened today?

Dow traded as low as 12,180 before it rallied back (Fine job, Nice Government Men! Float that ax head!) to close down only 12.67 (-.08%) at 15,294.50. S&P500 fell to 1,635.53 then recovered some to close down only 4.84 (0.29%) at 1,650.51.

Down? Did I say "down"? Yes. Well, how down?

Dow as in "broke the ascending trendline beneath." Down as in "scared the 20 day moving average" (now 15,085 & 1,630). Down, as in broke.

Y'all bear in mind that stocks compose a huge market, & usually don't turn very fast, crash only seldom, so this is liable to unfold slowly. Mmmm . . . come to think of it, if it DOESN'T unfold slowly that would be even worse news for stocks.

Y'all listen, now, & don't forget this no matter what market it is, stocks, gold, silver, bananas: stocks have gained over 15% this year. That ain't normal. When you see performance like that, run the other way, cause a break is coming.

Durn! I'm trying hard not to be mean & crow, but I'm just not succeeding. I'm trying to rein in my grin & keep reminding myself "One day up, next day down, guard your equanimity" but it's just not working. I've been spitting out black crow feathers for the better part of a month, & it feels right good to be on the right side today. I had to cough up all that before I look at the Dow/Gold & Dow/Silver charts or I'd never stop crowing.

Dow in gold fell 0.205 oz (G$4.24 gold dollars) to 10.987 oz (G$227.12). In itself this may not sound significant, but it gapped down thru the uptrend line. Broke clean through it.

Dow in silver scraped off 1.65 oz or 0.24% to end at 679.94 oz ($879.09 silver dollars). Let's take a look at that chart -- Well, what have we here but another broken trend line.

Crowing & cackling aside, these are the sort of breaks that ought to follow through lower, &, of course, they need that confirmation. Reason all this mattereth so largely is that the Dow/Gold & Dow/Silver are quite reliable indicators of the direction of metals against stocks. They are saying that metals are about to gain a lot of value against stocks.

US dollar index took a body blow today. Lost 58.4 basis points (3/4%) to 83.70 and has broken its sharp uptrend line, but that might mark nothing more than a routine correction.

Yen gapped up 1.16% to 98.13 cents/Y100. Stocks fall, yen riseth. (Y'all reckon the hot money has been borrowing yen on Abe's promise he would keep on cheapening them & buying stocks with the proceeds? If so, the hot money got hotter today.) Euro rose 0.6% to $1.2933, not terrible far from the 200 dma at $1.2986. Has the dollar turned down?

I looked at those gold & silver Comex warehouse inventory charts on Nick Laird's, and sure enough, gold inventories have dropped sharply (ca. -18%) this year, although silver has not.

I got to tell y'all, there ain't nothing normal going on in the silver & gold markets. Gold today closed up $24.40 (+1.78%) while silver rose -- ready for this? -- 3.6 cents (0.16%) to 2249.4c.

Every time markets challenge the same resistance or support, that line becomes more likely to yield. I'm looking at the 5-day gold chart, and I see not one, not two, not three, but five (5) challenges of $1,395. I also see 'twas driven down to $1,360 twice. This won't persist much longer. If I had to bet, I'd bet on gold piercing that barrier & shooting higher.

Silver seems strangely subdued in all this. Ratio closed at the high end of the range today, 61.883. Silver has been contained between 2200c & 2290c the last three days, but today couldn't get higher than 2267c. Scratch your head! Silver's performance against gold does tend to move same direction as stocks, but . . .

Stocks broke today for this leg, but probably not for the all-time (don't y'all just love that word?) grand finale top. However, since all the stock markets in the world are skipping in step, it could be brutal. Meanwhile, more evidence accumulates that silver & gold have indeed bottomed. Looking over your shoulder for one last possible plunge down, y'all might start pecking at buying some silver & gold.

Tomorrow, 24 May, is Victoria Day, celebrated in England and Canada as the British sovereign's birthday. Queen Victoria & I share the same birthday. Wait, wait -- not in the same year. She's 128 years older than I am.

On 23 May 1934 Dr. Wallace Carothers, a chemist at Du Pont, first produce Nylon. He later named it for his wife, Nylene.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
23-May-13 Price Change % Change
Gold, $/oz 1,392.00 24.40 1.78%
Silver, $/oz 22.49 0.04 0.16%
Gold/Silver Ratio 61.883 0.987 1.62%
Silver/Gold Ratio 0.0162 -0.0003 -1.60%
Platinum 1,457.20 -12.00 -0.82%
Palladium 738.25 -13.50 -1.80%
S&P 500 1,650.51 -4.84 -0.29%
Dow 15,294.50 -12.67 -0.08%
Dow in GOLD $s 227.13 -4.24 -1.83%
Dow in GOLD oz 10.99 -0.21 -1.83%
Dow in SILVER oz 679.94 -1.65 -0.24%
US Dollar Index 83.70 -0.58 -0.69%
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: 1,389.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,428.61 1,436.25 1,436.25
1/2 AE 0.50 711.71 734.80 1,469.61
1/4 AE 0.25 359.33 374.35 1,497.40
1/10 AE 0.10 145.81 152.52 1,525.20
Aust. 100 corona 0.98 1,354.01 1,368.01 1,395.64
British sovereign 0.24 329.10 339.10 1,440.52
French 20 franc 0.19 259.46 262.46 1,405.77
Krugerrand 1.00 1,413.32 1,426.32 1,426.32
Maple Leaf 1.00 1,404.70 1,419.70 1,419.70
1/2 Maple Leaf 0.50 799.08 729.59 1,459.19
1/4 Maple Leaf 0.25 354.37 371.74 1,486.98
1/10 Maple Leaf 0.10 147.31 151.48 1,514.77
Mexican 50 peso 1.21 1,667.05 1,681.56 1,394.68
.9999 bar 1.00 1,394.56 1,405.56 1,405.56
SPOT SILVER: 22.54      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 29.00 32.00 41.83
VG+ Peace dollar 0.77 26.00 29.00 37.91
90% silver coin bags 0.72 17,757.03 18,187.03 25.44
US 40% silver 1/2s 0.30 6,279.08 6,649.08 22.54
100 oz .999 bar 100.00 2,253.50 2,328.50 23.29
10 oz .999 bar 10.00 230.35 231.35 23.14
1 oz .999 round 1.00 22.64 23.54 23.54
Am Eagle, 200 oz Min 1.00 23.79 25.54 25.54
SPOT PLATINUM: 1,457.20      
Plat. Platypus 1.00 1,482.20 1,522.20 1,522.20
Home Questions & Answers Articles & Resources
The Moneychanger, P.O. Box 178, Westpoint, TN 38486

Copyright Notice

© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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.

Other Important Information

This is not an offer to buy or sell. Prices subject to change without notice. To enter an order, call us at (888) 218-9226 or (931) 766-6066. Sorry, no sales to Tennessee.

For complete details on how to buy from us or sell to us, please click here.