The Moneychanger
Weekly Commentary
Friday, 9 August a.d. 2013 Browse the commentary archive
Here's the weekly scorecard:
  2-Aug-13 9-Aug-13 Change % Change
Silver, cents/oz. 1,990.30 2,039.90 49.60 2.5
Gold, dollars/oz. 1,310.60 1,312.90 2.30 0.2
Gold/silver ratio 65.849 64.361 -1.490 -2.3
Silver/gold ratio 0.0152 0.0155 0.0004 2.3
Dow in Gold Dollars (DIG$) 246.98 242.88 -4.10 -1.7
Dow in gold ounces 11.95 11.75 -0.20 -1.7
Dow in Silver ounces 786.73 756.19 -30.54 -3.9
Dow Industrials 15,658.36 15,425.51 -232.85 -1.5
S&P500 1,709.67 1,691.42 -18.25 -1.1
US dollar index 81.90 81.12 -0.78 -1.0
Platinum 1,450.60 1,499.00 48.40 3.3
Palladium 728.80 740.65 11.85 1.6

Here's your assignment for this weekend. Go to and click on the map of your state, then go to your city, to find the Troubled Asset Ratio of YOUR bank compared to the national median. If it's too high above that median versus other banks in your area, you ought to change banks. Best way to avoid a bar fight is not to be in the bar when the fight breaks out.

'Twas a heavy week for stocks, laden with tears, & the US dollar index shared their sorrow. On the other hand metals danced & sang. Platinum ran hog wild. About time.

Yeeee-haw! [Y'all will have to substitute in your minds a Rebel Yell for that. I don't know how to spell a Rebel Yell, just know how to yell one.] Look at that Dow in Silver! It sank 1.5% today, down 11.66 oz to 740.10 oz., down 1.5% today alone and 3.9% for the week AND hovering just above its 50 day moving average (754.23).

Dow in Gold isn't nearly as sprightly as Dow in Silver, but don't sneer. It fell 0.6% today to 11.749 oz (G$242.88 gold dollars), below its 20 DMA (11.87 oz) but still above the 50 DMA (11.64 oz) -- O, gravity, sweet gravity! A close below 10.55 oz will take the DiG back below the long term downtrend & I can breathe easy again.

Stocks in dollar terms had a rough day. At the low the Dow had lost 151.67, but it came back to close losing "only" 72.81 or 0.47%. S&P500 gave back that six points it had gained yesterday -- down 6.06 (0.36%) to 1,691.42.

Stand ye back, & ponder this perspective: stocks now are undergoing a correction that will reach the 50 DMA (1,652.36) at least, maybe lower. Might go lower, but afterwards comes the last, last push to an all time high and completion of that gigantic Broadening Top/Jaws of Death formed since 1997. Then the smash-up.

US dollar index had better stop at 80.50, the June low. If not, 'twill tumble, twist, and plummet toward 79, where it must grab hold or die. The Euro is reaching the $1.3450-ish top of its range, & therefore is a candidate for reversing. Lost 0.31% to $1.3333 today. Yen left behind a breakaway gap three days ago, and gained 0.47% today to 103.9c/Y100. Headed up, but who wants to ride a horse like that?

Today gold polished off a well played week with another little rise, up $2.20 to $1,312.90. Silver jumped 21.5 cents to 2039.9c, highest close since July 22.

Despite efforts to crush it down early in the day, by 11:00 gold had fended them all off and crossed above yesterday's close. Soon reached a high of $1,313.10, but backed off slightly toward the close to end at $1,312.90. You, there! Don't go getting all starry-eyed -- gold still hasn't closed ABOVE its 50 DMA ($1,315.58) which it must do. This week was great -- trading down to a $1,271.80 low, key reversing yesterday & today, all just pretty as a new puppy, but gold must improve those gains.

Next roadblocks fall at $1,350, then $1,487 to $1,500. And by the way, a close above that 50 DMA will also take gold above the downtrend line from May, so a move through $1,325 is liable to pop fast.

It would say mighty things about the strength underlying metals if silver led a rally up.

Now silver broke through its 50 DMA (2030c) AND the May downtrend line, just poked its head up their like a turtle looking for a sunny log. Meanwhile volume is pushing up. MACD has turned up. 12 day & 21 day rates of change have turned up. About time something happened. Silver's so far below its 200 DMA it needs a telescope to spy it.

That's all right, silver can zip like a Roadrunner when it wants. For now, let's calm down and think. Needs to climb above the last breakdown about 2150c, then reach 2500c. Seasonally, silver has often seen the end of a corrections or beginning of a new move up in August.

All these witnesses are lining up to testify that the June 27 lows were the bottom for silver & gold. Hold it! Bear in mind that both must ADVANCE from here, no slouching. And any close below this week's lows wipes out all this optimism.

But all in all it appears that the long correction from 2011 had ended. The best part of the bull market, with the greatest gains, lies before us. Assuming silver & gold continue advancing next week, stop waiting & buy.

Whoa! One last thing -- gold/silver ratio today closed at 64.361. If you want to swap gold for silver, your time rapidly is running out.

On 9 August 1814 Major General Andrew Jackson signed the Treaty of Fort Jackson ending the Creek War (actually the war with the Upper Creeks). Under the treaty the Creeks surrendered 23 million acres, much of Alabama's center and most of south Georgia, to the United States. With the Creeks pacified behind him, Jackson proceeded to New Orleans where on 8 January 1815 he fought the Battle of New Orleans against the British.

If any of y'all are having tooth or gum trouble, I strongly recommend you check out Dr. Mark Manhart's

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
9-Aug-13 Price Change % Change
Gold, $/oz 1,312.90 2.20 0.2
Silver, $/oz 20.40 0.22 1.1
Gold/Silver Ratio 64.361 0.101 0.2
Silver/Gold Ratio 0.0155 0.0002 1.1
Platinum 1,499.70 9.00 0.6
Palladium 740.10 2.45 0.3
S&P 500 1,691.42 -6.06 -0.4
Dow 15,425.51 -72.81 -0.5
Dow in GOLD $s 242.88 -1.53 -0.6
Dow in GOLD oz 11.75 -0.07 -0.6
Dow in SILVER oz 756.19 -11.66 -1.5
US Dollar Index 81.12 0.10 0.1
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: 1,313.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,343.51 1,355.98 1,355.98
1/2 AE 0.50 669.27 691.78 1,383.56
1/4 AE 0.25 334.64 352.46 1,409.83
1/10 AE 0.10 137.79 143.81 1,438.06
Aust. 100 corona 0.98 1,280.86 1,291.86 1,317.96
British sovereign 0.24 311.01 323.01 1,372.16
French 20 franc 0.19 245.19 252.19 1,350.79
Krugerrand 1.00 1,330.37 1,342.37 1,342.37
Maple Leaf 1.00 1,328.30 1,343.30 1,343.30
1/2 Maple Leaf 0.50 755.15 689.48 1,378.97
1/4 Maple Leaf 0.25 334.89 351.31 1,405.23
1/10 Maple Leaf 0.10 139.21 143.15 1,431.50
Mexican 50 peso 1.21 1,572.23 1,586.45 1,315.79
.9999 bar 1.00 1,317.90 1,328.90 1,328.90
SPOT SILVER: 20.42      
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 16,352.05 16,702.05 23.36
US 40% silver 1/2s 0.30 5,832.15 5,982.15 20.28
100 oz .999 bar 100.00 2,052.00 2,117.00 21.17
10 oz .999 bar 10.00 205.20 211.70 21.17
1 oz .999 round 1.00 20.52 21.27 21.27
Am Eagle, 200 oz Min 1.00 21.67 23.42 23.42
SPOT PLATINUM: 1,499.70      
Platinum Platypus 1.00 1,509.70 1,539.70 1,539.70
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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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