The Moneychanger
Daily Commentary
Monday, 1 July a.d. 2013 Browse the commentary archive

Before I forget, I need to remind y'all that if you ever want to swap gold for silver, now's the time with the gold/silver ratio up around 64. Need to move fast.

We will be closed on Thursday & Friday, 4 & 5 July. My daughter Mercy is getting married on Saturday, 6 July. And 9 July is a perpetual Sabbath for my fmaily & me in memory of our acquittal in Federal court on 9 July 1991, thanks only to God's great mercy and power. You can read about that at "The Most Dangerous Man in the Mid-South,

Since we will be closed those days, I won't be sending out a commentary, either. Reckon I'll have to make it good the next two days.

The Fed has pulled off what may be its greatest propaganda coup forever, convincing markets that it will "taper" later this year. I see analysts treating this as a certainty, ignoring Bodacious Ben's "IF" the economy improves -- up to his Alice in Wonderland projections. Y'all, B-Ben has the Fed riding a tiger, & sure as they try to dismount, that tiger will maul everybody. Watch your toes!

I don't seem to be easily able to find stock market capitalizations for the S&P500 or the Wilshire 5000, but if y'all are wondering where all the Ben's inflation has gone, look ye no further than stock markets. There 'tis, not in oatmeal & Vienna sausages.

Stocks eked out miserly gains. Dow rose 65.346 (0.44%) to 14,974.96 while the S&P500 scratched out 8.68 or 0.54% to 1,614.96.

I tell y'all, when any market falls out of a long-established trading channel, as stocks did little more than a week ago, it is harder to climb back into that channel than it is to get back up on a horse that's just thrown you. Both indices are rasslin' with their 50 day moving averages, but not quite able to climb above them (15,050 & 1,623). If they can climb over that, they might stand a chance of swinging a leg up over that lower channel line again.

Frustrating to try to read the Dow in Gold and Dow in Silver. Every once in a while they'll pop up, only to give back all that gain. Look like markets rolling over, but slowly.

Dow in Gold today closed at 11.924 oz (G$246.48 gold dollars) down 2.13%. Dow in silver lost 0.93 oz (-.12%) to close 765.69 oz. It has turned down sharply from an 819,52 oz intraday high two days ago.

Gas has leaked out of the US dollar index's balloon. Lost 13.6 basis points (0.17%) to end barely above 83 at 83.011. Falling below 83 will wound morale.

Euro & yen both look puking green sick, but may be sitting up. Yen closed 100.35 cents/Y100, down 0.34%, while the Euro ended up 0.38% at $1.3064, still below its moving averages and parlously close to $1.3000 support.

'Twas another smart day for silver & gold. Gold leapt $32.10 to $1,355.90 while silver slugged along with only a 10.9 cent gain, ending at 1956c.

In the last two days, gold has gained 3.7% and silver 5.5%. This looks great on a chart -- both have bounced up after hitting their lower trading channel lines. You can view charts at & Gold's chart off Thursday's $1,179 low has traded as an uptrend ought, not as a correction. That Thursday low looks like a V bottom.

Yet both silver & gold must confirm any rise. First for gold is a close about $1,275 where it last broke down, then $1,350, $1,425, and $1,550. If you wait for all that confirmation, gold will be $300 higher.

To confirm a reversal, poor silver must climb over 2000c, then 2100c, then 2750c. But first, it must climb above 2000c.

Strengthening a bullish case for gold & silver is the collapse in the gold/silver ratio the last three days. If silver hadn't acted so sluggishly today, it would be lower still.

As I said Friday, I am starting to nibble at silver & gold some, but would really like to see some sort of double bottom, a quick retreat back toward or to those lows with a very quick recovery. But then, if wishes were horses central bankers' economic predictions would come true, now wouldn't they? We just have to wait for the market to tell us its mind.

On 1 July 1869 the US mint opened at Carson City, Nevada to mint some of the fabulous production of the Comstock Lode. One reason the Carson City silver dollars are so hard to find in perfect condition is that they had to carry them out packed on mules, which caused them to bump and rub against each other.

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
1-Jul-13 Price Change % Change
Gold, $/oz 1,255.90 32.10 2.62%
Silver, $/oz 19.56 0.11 0.56%
Gold/Silver Ratio 64.208 1.290 2.05%
Silver/Gold Ratio 0.0156 -0.0003 -2.01%
Platinum 1,379.20 42.30 3.16%
Palladium 684.90 25.70 3.90%
S&P 500 1,614.96 8.68 0.54%
Dow 14,974.96 65.36 0.44%
Dow in GOLD $s 246.48 -5.36 -2.13%
Dow in GOLD oz 11.92 -0.26 -2.13%
Dow in SILVER oz 765.59 -0.93 -0.12%
US Dollar Index 83.01 -0.14 -0.16%
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: 1,251.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,284.98 1,291.86 1,291.86
1/2 AE 0.50 637.60 659.07 1,318.14
1/4 AE 0.25 318.80 335.79 1,343.16
1/10 AE 0.10 131.27 137.01 1,370.06
Aust. 100 corona 0.98 1,216.61 1,227.61 1,252.41
British sovereign 0.24 296.30 308.30 1,309.68
French 20 franc 0.19 233.60 240.60 1,288.69
Krugerrand 1.00 1,262.46 1,274.46 1,274.46
Maple Leaf 1.00 1,266.20 1,281.20 1,281.20
1/2 Maple Leaf 0.50 719.44 656.88 1,313.76
1/4 Maple Leaf 0.25 319.06 334.70 1,338.78
1/10 Maple Leaf 0.10 132.63 136.38 1,363.81
Mexican 50 peso 1.21 1,500.90 1,511.57 1,253.69
.9999 bar 1.00 1,255.58 1,266.58 1,266.58
SPOT SILVER: 19.53      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26.00 29.00 37.91
VG+ Peace dollar 0.77 24.00 27.00 35.29
90% silver coin bags 0.72 15,393.95 15,893.95 22.23
US 40% silver 1/2s 0.30 5,569.60 5,719.60 19.39
100 oz .999 bar 100.00 1,943.00 2,023.00 20.23
10 oz .999 bar 10.00 200.30 201.30 20.13
1 oz .999 round 1.00 19.63 20.43 20.43
Am Eagle, 200 oz Min 1.00 20.78 22.33 22.33
SPOT PLATINUM: 1,379.20      
Plat. Platypus 1.00 1,404.20 1,444.20 1,444.20
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© 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.

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