The Moneychanger
Daily Commentary
Wednesday, 12 June a.d. 2013 Browse the commentary archive

Following my words last night about how long your yankee government has been spying on you, my dear wife Susan reminded me of an event during our 1991 federal trial for willful failure to file income tax returns and conspiracy to delay and defeat the IRS (we were all acquitted). A major thrust of the government's case was to show they could retrieve every piece of financial data about everyone. Susan was on the witness stand, and the prosecutor asked her if she had spent XXX dollars on tee shirts at J Crewe the weekend before. Matter of fact, she had, & she had charged them. Never losing her aplomb (she never does), with withering sweetness Susan said, "Yes, I did, I bought them for my children. They're good kids, and they deserve a new tee shirt now & then."

Government could not have known about that charge without having access to credit card company records. And since that charge occurred AFTER the date of the dirty deeds we were accused of, government was abusing process by continuing to spy on us. But we're not special -- now they're spying on all y'all, too!

Everybody grows more bearish on gold (let alone silver) by the day. This is great, because the lower sentiment drops, the closer we are to a bottom. Gold is already at the bottom of its trading channel back to 2005. How much more can it drop? Could drop lots more, BUT its position sitting on that channel line argues against it, since gold remains in a long term bull market. Also the sentiment indicators argue against it.

Stock markets around the world have succumbed to fear that central banks will shut down the inflation pipeline. This smacked the Dow down 126.79 (0.84%) to 14,995.23. S&P500 was knocked down 13.61 (0.84%) to 1,612.52.

That leaves the Dow below its uptrending bottom channel line, and the S&P500 right on its. S&P500 touched its 50 DMA today (1,610.55) & the Dow stopped a bit above its 14,969.20 fifty day moving average. If they don't turn here, Dow could fall to 14,500 & the S&P500 to 1,540.

Dow in gold tumbled 1.89% today to 10.774 oz (G$222.72 gold dollars). That's a 0.208 oz loss. This leaves the Dow in Gold well below its 10.97 20 DMA. Trending down.

Dow in silver also fell today. Lost 10.66 oz (1.53%) to end at 687.98 oz, barely above its 682.45 20 DMA. Appears to be rolling over downward.

US dollar index broke 81 today along with its 200 day moving average, and ended down 14.5 basis points (0.19%) at 80.906. Makes it look puking sick on a chart, like it has in mind to fall to 79 or so.

Japanese yen stood flatfooted today, gaining 0.03% to 104.12 cents per 100 yen. Euro gained 0.15% to end at $1.3333. Stretching for $1.3500.

US$=Y96.04=E0.7500=0.045 880 oz. Ag=0.000 718 oz Au.

Silver & gold rose a little today, but without much meaning. Silver bumped up 15.1 cents (0.7%) to 2179.6c while gold climbed $14,80 (1.07%) to $1,391.80.

That does no more than float gold up to resistance. Here's a little spark, though: gold did close above its $1,389.41 twenty day moving average.

Silver has merely established another tight sideways range between 2140 and 2200c.

Interest in both markets has dwindled down to nothing. Again, this is a good sign. Just be patient. Gold & silver will come back.

On 12 June 1381 in the Peasants' Revolt or Wat Tyler's Rebellion the rebels arrived at Blackheath. Since the Black Death in the 1340s (in some areas 90% died) economics had been tilting in the direction of labor. High taxes for the war in France finally lit the match. In the end the rebels gained little more than the abolition of serfdom.

On 12 June 1859 the Comstock Silver Lode was discovered in Virginia City, Nevada. Half of the value of its production came from byproduct gold.

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
12-Jun-13 Price Change % Change
Gold, $/oz 1,391.80 14.80 1.07%
Silver, $/oz 21.80 0.15 0.70%
Gold/Silver Ratio 63.856 0.238 0.37%
Silver/Gold Ratio 0.0157 -0.0001 -0.37%
Platinum 1,481.40 2.40 0.16%
Palladium 755.25 4.50 0.60%
S&P 500 1,612.52 -13.61 -0.84%
Dow 14,995.23 -126.79 -0.84%
Dow in GOLD $s 222.72 -4.30 -1.89%
Dow in GOLD oz 10.77 -0.21 -1.89%
Dow in SILVER oz 687.98 -10.66 -1.53%
US Dollar Index 80.91 -0.15 -0.18%
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: 1,387.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,415.45 1,434.19 1,434.19
1/2 AE 0.50 710.68 733.75 1,467.49
1/4 AE 0.25 358.81 373.81 1,495.25
1/10 AE 0.10 145.60 152.30 1,523.00
Aust. 100 corona 0.98 1,350.70 1,364.70 1,392.27
British sovereign 0.24 328.62 338.62 1,438.51
French 20 franc 0.19 259.08 262.08 1,403.77
Krugerrand 1.00 1,404.35 1,417.35 1,417.35
Maple Leaf 1.00 1,402.70 1,417.70 1,417.70
1/2 Maple Leaf 0.50 797.93 728.54 1,457.09
1/4 Maple Leaf 0.25 353.86 371.21 1,484.84
1/10 Maple Leaf 0.10 147.10 151.26 1,512.59
Mexican 50 peso 1.21 1,664.65 1,679.15 1,392.68
.9999 bar 1.00 1,392.56 1,403.56 1,403.56
SPOT SILVER: 21.70      
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 16,552.25 17,192.25 24.05
US 40% silver 1/2s 0.30 6,032.75 6,402.75 21.70
100 oz .999 bar 100.00 2,170.00 2,245.00 22.45
10 oz .999 bar 10.00 222.00 223.00 22.30
1 oz .999 round 1.00 21.80 22.55 22.55
Am Eagle, 200 oz Min 1.00 22.95 24.35 24.35
SPOT PLATINUM: 1,481.40      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,506.40 1,546.40 1,546.40
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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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