The Moneychanger
Weekly Commentary
Friday, 19 July a.d. 2013 Browse the commentary archive
Here's the weekly scorecard:
  12-Jul-13 19-Jul-13 Change % Change
Silver, cents/oz. 1,977.90 1,944.80 -33.10 -1.7
Gold, dollars/oz. 1,277.80 1,293.30 15.50 1.2
Gold/silver ratio 64.604 66.500 1.900 2.9
Silver/gold ratio 0.0155 0.0150 -0.0004 -2.9
Dow in Gold Dollars (DIG$) 250.18 248.45 -1.73 -0.7
Dow in gold ounces 12.10 12.02 -0.08 -0.7
Dow in Silver ounces 781.85 799.25 17.39 2.2
Dow Industrials 15,464.30 15,543.74 79.44 0.5
S&P500 1,680.19 1,692.09 11.90 0.7
US dollar index 82.97 82.62 -0.35 -0.4
Platinum 1,409.60 1,429.70 20.10 1.4
Palladium 721.60 748.65 27.05 3.7

Strange week. Stocks keep eking out new highs, slowly, slowly. US dollar is struggling to maintain respectability, platinum & palladium are jumping, but gold & silver are gainsaying each other, talking at cross purposes.

Dow dropped today 4.8 (0.03%) to end at 15,543.74, down on the day but up 0.5% for the week. S&P500 rose today 2.72 (0.16%) to 1,692.09. It gained 0.7% for the week.

I really don't pay much attention to the raw numbers for the Dow or S&P500, leastways, not as much attention as I pay to the Dow in Silver or Dow in Gold. That tells me more clearly how stocks are performing against silver & gold. Once stocks are consistently dropping once more against silver & gold, we can be sure the metals' bottom is behind us.

Today the Dow in gold fell 0.7% to 12.019 oz (GS248.45 gold dollars). It remains in a downtrend, and more importantly, the 12 day rate of change has dipped into negative territory, meaning it's lower today than it was 12 days ago. Trending down.

Dow in silver is clouding the picture. It dropped today 0.4% (3.22 oz) to 799.25 oz. That's positive for silver, and overall the rate of change is trending down, but in the past few days it has popped up to a positive 3.72%. What we want to see is both the Dow in Silver & Dow in Gold in firm downtrends with rates of change below zero.

The US dollar index lost 35.1 basis points this week (0.4%, 17.4 basis points today). Weak, but still it has bounced off support at 82.50 & support at 82 will be stronger still. If I speculated in currencies, and I don't, any more than I shoot craps & for like reasons, I would be looking a chance to buy rather than sell dollars right now.

Yen lost another 0.18% today to close at 99.38 cents/Y100. Yen must hold 98.5 cents to remain in its intermediate uptrend. Euro rose 0.25% to $1.3143. Euro successfully tested support of its short term uptrend line this week and remains headed higher in the short term. Long term, I'd rather sleep with bed bugs than own the euro.

Silver & gold can't agree with each other. Gold was knocked from the top of its trading range to the bottom this week and came right back to close the week higher. Added another $8.70 today to end at $1,293.30, ending the week up 1.2%.

Silver ended the week down 1.7%, although it rose 7.2 cents today to 1944.8c. It broke down and past the bottom of its 5 day trading range, but came back with gold reluctantly. This disagreement casts a cloud over gold's performance. It's perfectly possible that gold ran up to $1,300 resistance, fell back, then came back for this second try today only to fail again & fall to lower lows. In any event, gold has not beaten its way through $1,300 yet, its first barrier to conquer. Next week will tell.

Thus we still can't claim those June metals' lows to be the ultimate lows, until they confirm upside with higher prices. We keep waiting for technical evidence. Meanwhile, the fundamental evidence against the dollar and currencies and economies around the world keeps worsening. While all the goofs in the media applaud Bernanke & the criminals who run the world's central banks, the loonies have taken the world -- and the dollar -- where they have never been before, and this ain't Star Trek, this is the real world, with real economies, and they are running dangerously close to wrecking everything by their foolhardy inflation. The outcome of such a collapse would be so devastating, so catastrophic, that I can almost hope Bernanke & the other psychopaths get away with their gamble.

Now I know that my garlicky language will draw rebukes from some of y'all, but I want to define "psychopath": a person who manifests amoral and antisocial behavior, lack of the ability to love, extreme egocentricity, & failure to learn from experience. If that don't define our central banking criminals, words cannot.

On 19 July 1813 was born a man who did more to improve manners than all the world's Emily Vanderbilts -- Samuel Colt, inventor of the revolver.

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
19-Jul-13 Price Change % Change
Gold, $/oz 1,293.30 8.70 0.7
Silver, $/oz 19.45 0.07 0.4
Gold/Silver Ratio 66.500 0.445 0.7
Silver/Gold Ratio 0.0150 0.0001 0.4
Platinum 1,429.70 16.40 1.2
Palladium 748.65 2.25 0.3
S&P 500 1,692.09 2.72 0.2
Dow 15,543.74 -4.80 -0.0
Dow in GOLD $s 248.45 -1.73 -0.7
Dow in GOLD oz 12.02 -0.08 -0.7
Dow in SILVER oz 799.25 -3.22 -0.4
US Dollar Index 82.62 -0.17 -0.2
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: 1,294.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,329.76 1,336.88 1,336.88
1/2 AE 0.50 659.84 682.04 1,364.07
1/4 AE 0.25 329.92 347.49 1,389.97
1/10 AE 0.10 135.85 141.78 1,417.81
Aust. 100 corona 0.98 1,260.28 1,271.28 1,296.96
British sovereign 0.24 306.62 318.62 1,353.55
French 20 franc 0.19 241.74 248.74 1,332.29
Krugerrand 1.00 1,312.93 1,324.93 1,324.93
Maple Leaf 1.00 1,309.80 1,324.80 1,324.80
1/2 Maple Leaf 0.50 744.51 679.77 1,359.54
1/4 Maple Leaf 0.25 330.17 346.36 1,385.44
1/10 Maple Leaf 0.10 137.25 141.13 1,411.33
Mexican 50 peso 1.21 1,553.21 1,564.14 1,297.29
.9999 bar 1.00 1,299.33 1,310.33 1,310.33
SPOT SILVER: 19.45      
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 15,833.68 16,333.68 22.84
US 40% silver 1/2s 0.30 5,544.53 5,694.53 19.30
100 oz .999 bar 100.00 1,934.50 2,014.50 20.15
10 oz .999 bar 10.00 199.45 200.45 20.05
1 oz .999 round 1.00 19.55 20.35 20.35
Am Eagle, 200 oz Min 1.00 20.70 22.25 22.25
SPOT PLATINUM: 1,429.70      
Platinum Platypus 1.00 1,454.70 1,494.70 1,494.70
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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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