The Moneychanger
Daily Commentary
Thursday, 8 August a.d. 2013 Browse the commentary archive

Yesterday I was pondering what looked like rounding bottoms in both gold and silver. Also, I mentioned that both metals put in the first half of a key reversal yesterday. Second half is a higher close, & both silver & gold posted that in high spades today.

Gold jumped $24.60 (1.91%) to end at 1,310.70. Silver rose -- be still, my beating heart! -- 3.52% or 68.6 cents to 2018.4c. Let's look a little closer & savor that.

Beginning at midnight New York time, silver gapped up from 1940c-1950c to 1965c, traded sideways until the New York open, gapped from 1976.5c and burst through 2000c like a basketball held underwater, then climbed steadily to 2028.2c. Backed off a little & flattened out the rest of the day, but closed Comex at 2018.4c, leaving the shorts puking in their wastebaskets. They'll be hitting that Scotch tonight.

Gold gapped up about midnight from $1,282 to $1,292. Opened Comex at $1,290 and climbed straight up to $1,312.90 just before noon. Flatlined the rest of the day, but closed near the high at $1,310.70. Trading $1,312 - 1,314 in the aftermarket.

Metals made more progress than that alone. Silver jumped clean through its 20 DMA (1983c) nearly to touch its 50 dma (2035c), first time it's been near that mark since January. Because of the form of the waves up I am sniffing for a trap, but if silver jumps over 2050c then over 2135, I'll stop sniffing.

Gold also vaulted clean through its 20 DMA (1,307.70) to reach for its 50 DMA (1,315.54). A close above that level also takes gold above its resistance at $1,325, sets it up to crash through $1,350 resistance, & run for $1,500.

Best day silver & gold have seen in months. Very solid gains, now improve 'em!

Stocks bounced today like a dead cat thrown off the roof. Dow gained 27.65 (0.18%) about half what it lost yesterday. S&P500 gained 6.57 (0.39%) a gnat's eyebrow more than it lost yesterday. This is the kiss good-bye before the jump out the window.

Dow in gold dropped 1.7% to 11.824 oz (G$244.43 gold dollars) & sank back under its 20 DMA (11.88 oz). Clarifies the little peak last couple of days as no more than a touchback to breakdown, preparing to fall further. Dow in silver lost 3.23%, a whopping 25.6 oz, to 767.85 oz. One more little scootch sends it over the cliff.

Looks like the US dollar will fall to 80.50 at least, maybe further. Lost another 26.6 basis points (0.34%) today to end at 81.017. Fifth down day running. Euro made a fool of me, rose 0.35% today, reaching for the top of the range around $1.3450. Doesn't matter, I wouldn't buy that nasty thing with YOUR money. Yen dropped back 0.28% to 103.57 cents per Y100. Still headed way higher.

I have to run. It's been fun visiting with y'all, but I have a supper engagement with my wife, and if I'm late she will skin me & nail my hide to the barn to dry.

This really was a fine day for silver & gold, y'all. Makes that low on 27 June look like it really was the bottom.

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
8-Aug-13 Price Change % Change
Gold, $/oz 1,310.70 24.60 1.91%
Silver, $/oz 20.18 0.69 3.52%
Gold/Silver Ratio 64.938 -1.023 -1.55%
Silver/Gold Ratio 0.0154 0.0002 1.58%
Platinum 1,490.70 53.30 3.71%
Palladium 737.65 15.40 2.13%
S&P 500 1,697.48 6.57 0.39%
Dow 15,498.32 27.65 0.18%
Dow in GOLD $s 244.43 -4.23 -1.70%
Dow in GOLD oz 11.82 -0.20 -1.70%
Dow in SILVER oz 767.85 -25.60 -3.23%
US Dollar Index 81.02 -0.27 -0.33%
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: 1,312.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,342.79 1,355.26 1,355.26
1/2 AE 0.50 668.92 691.41 1,382.82
1/4 AE 0.25 334.46 352.27 1,409.08
1/10 AE 0.10 137.72 143.73 1,437.30
Aust. 100 corona 0.98 1,280.18 1,291.18 1,317.26
British sovereign 0.24 310.84 322.84 1,371.45
French 20 franc 0.19 245.06 252.06 1,350.09
Krugerrand 1.00 1,330.32 1,342.32 1,342.32
Maple Leaf 1.00 1,327.60 1,342.60 1,342.60
1/2 Maple Leaf 0.50 754.75 689.12 1,378.23
1/4 Maple Leaf 0.25 334.71 351.12 1,404.48
1/10 Maple Leaf 0.10 139.14 143.07 1,430.73
Mexican 50 peso 1.21 1,571.39 1,585.60 1,315.09
.9999 bar 1.00 1,317.19 1,328.19 1,328.19
SPOT SILVER: 20.24      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25.50 28.00 36.60
VG+ Peace dollar 0.77 21.50 25.00 32.68
90% silver coin bags 0.72 16,219.78 16,569.78 23.17
US 40% silver 1/2s 0.30 5,777.58 5,927.58 20.09
100 oz .999 bar 100.00 2,033.50 2,098.50 20.99
10 oz .999 bar 10.00 203.35 209.85 20.99
1 oz .999 round 1.00 20.34 21.09 21.09
Am Eagle, 200 oz Min 1.00 21.49 23.24 23.24
SPOT PLATINUM: 1,490.70      
Plat. Platypus 1.00 1,500.70 1,530.70 1,530.70
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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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