The Moneychanger
Daily Commentary
Thursday, 18 July a.d. 2013 Browse the commentary archive

Whoa, wait a minute! Silver & gold were supposed to follow through downside after yesterday's dip, but they didn't. In fact, gold rose $6.70 to $1,284.60 and silver fell 3.3 cents to 1937.6c. Yet here in the aftermarket they are trading at $1,286.30 and 1948c.

What meaneth this? It could be a sign of strength, if both were driven to the bottom of their trading range, silver even further, yet they didn't break down the next day. Gold remains above its 20 DMA ($1,259.48) & silver nearby (1944c). Gold's 12 day rate of change remains positive at 2.38% (good sign, but slowing), but silver's has dipped below zero at -0.69% (not a good sign). We'll just have to wait to see what the market tells us tomorrow.

Stocks continue their feeding mania. Dow rose 78.02 (0.5%) to 15,548.54 and the S&P500 trailed right along, rising 8.46 (0.5%) to 1,689.37.

Dow in gold was basically flat, down 0.02% to 12.104 oz (G$250.21 gold dollars), but Dow in silver rose 0.68% or 5.38 oz to 802.46 oz.

Whatever 'twas the Bernancubus said yesterday, it helped the dollar index today. It rose 9.7 basis points (0.12%) to 82.783. I mistrust, however, that gap it left getting down here, and it abides below its 20 DMA. Expect lower prices before the dollar turns around with a will -- but this is all short term stuff. Dollar remain in intermediate term rally mode.

Yen fell 0.87% to 99.56 cents/Y100, fairly wrecking its short term uptrend. Euro lost only 0.11% to $1.3110, still in a short term uptrend.

I suspect Bernanke's main goal this week was to talk down interest rates (or talk up the bond market, as interest rates move opposite to bond prices). He has fallen into his own trap, and blown up the Grendel's mother of all bubbles in US bonds. He has forgotten Hippocrates' first rule, the one that other generations of central bankers always observed religiously: first, do no harm. Hard as it is to conceive, playing "Masters of the Universe" he and his trolls have actually created a bubble big enough to bring down the US dollar. I'd rather have a gas station manager, a genuine businessman in charge. At least he'd know not to water down the gasoline.

I'm travelling today so must make this short. My wife's hungry, and my main goal in this life is to keep her well fed and happy, so I've got to find her something to eat.

On 18 July 1927 Ty Cobb set a major league baseball record with his 4,000th career hit. Before he retired in 1928 he hit 4,191. Y'all know he came from Georgia?

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
18-Jul-13 Price Change % Change
Gold, $/oz 1,284.60 6.70 0.52%
Silver, $/oz 19.38 -0.03 -0.17%
Gold/Silver Ratio 66.299 0.458 0.70%
Silver/Gold Ratio 0.0151 -0.0001 -0.69%
Platinum 1,413.30 1.70 0.12%
Palladium 746.40 12.05 1.64%
S&P 500 1,689.37 8.46 0.50%
Dow 15,548.54 78.02 0.50%
Dow in GOLD $s 250.21 -0.05 -0.02%
Dow in GOLD oz 12.10 -0.00 -0.02%
Dow in SILVER oz 802.46 5.38 0.68%
US Dollar Index 82.78 0.10 0.12%
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: 1,286.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,321.03 1,328.10 1,328.10
1/2 AE 0.50 655.50 677.56 1,355.12
1/4 AE 0.25 327.75 345.21 1,380.84
1/10 AE 0.10 134.96 140.85 1,408.50
Aust. 100 corona 0.98 1,252.01 1,263.01 1,288.52
British sovereign 0.24 304.61 316.61 1,344.99
French 20 franc 0.19 240.15 247.15 1,323.79
Krugerrand 1.00 1,304.31 1,316.31 1,316.31
Maple Leaf 1.00 1,301.30 1,316.30 1,316.30
1/2 Maple Leaf 0.50 739.62 675.31 1,350.62
1/4 Maple Leaf 0.25 328.01 344.09 1,376.34
1/10 Maple Leaf 0.10 136.35 140.21 1,402.07
Mexican 50 peso 1.21 1,543.01 1,553.89 1,288.79
.9999 bar 1.00 1,290.80 1,301.80 1,301.80
SPOT SILVER: 19.48      
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 15,858.70 16,358.70 22.88
US 40% silver 1/2s 0.30 5,554.85 5,704.85 19.34
100 oz .999 bar 100.00 1,938.00 2,018.00 20.18
10 oz .999 bar 10.00 199.80 200.80 20.08
1 oz .999 round 1.00 19.58 20.38 20.38
Am Eagle, 200 oz Min 1.00 20.73 22.28 22.28
SPOT PLATINUM: 1,413.30      
Plat. Platypus 1.00 1,438.30 1,478.30 1,478.30
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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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