The Moneychanger
Daily Commentary
Monday, 26 August a.d. 2013 Browse the commentary archive

Y'all, I looked at the news today but it was so sick & sorry, so full of the same old propaganda from the yankee government trying to run our lives & everybody else's in the world, I just packed it in and saved myself some stomach acid.

The black shirts on the Comex painted the tape with a cosmetic close for gold, down $2.70 to $1,393. What does that mean? Zip. Nothing. Mouse navel lint.

How can I be so sure? Aftermarket is trading at $1,404.60 -- strong as a garlic milkshake, to trade through $1,400 resistance in the aftermarket.

Also silver rose 27.2 cents to 2401c on Comex, & in the aftermarket its trading at 2432.5c.

Can anybody spell "H-o-g-w-a-s-h"?

Silver & gold are both overbought (RSI) & both will head higher in spite of it. If you have been waiting to see what would happen in silver & gold, STOP. Stop waiting. It's happening now. Gonna be a good week for metals.

Here's more proof: the Dow in gold fell off 0.23% today to end at 10.73 oz (G$221.80 gold dollars), a gnat's whisker from falling through the long term downtrend line at 10.50oz.

Dow in Silver is even better: down another 9.83 oz or 1.55% to 622.51 oz. After silver closed it traded down to 614.83 oz, right smack on the long term downtrend line.

These two indicators, the most reliable I know, are both shouting & screaming that silver & gold are about to gain beaucoup value against stocks. Ignore at your own peril.

Stocks were in positive territory until about 3:00 p.m. then something happened. Maybe folks got tired of waiting for 4:00, but stocks sank clean through Friday's closes and ended down on the day. Dow peeled off 64.05 (0.43%) to end at 14,946.46, about where it was last Thursday. S&P500 lost 6.72 (0.72%) to 1,656.78.

And the bad news just keeps on coming. For both stock indices today posted the first half of a key reversal with a break to new high territory for the move and a lower close. Lower close tomorrow guarantees more downside for stocks.

Time to sell stocks & put the proceeds in silver & gold.

US dollar index was flat today at 81.367. Dollar's playing a dangerous game, flirting with its intermediate uptrend. I expect it will resolve to the upside, but only because the yen & euro look so sorry.

Euro lost 0.11% today & closed at $1.3369, just waiting to drop. Yen gained 0.24%to 101.52 cents/Y100, enough to stay above its long term trend line but not enough to climb over its 20 DMA (102.25). Going earthward.

Anticipating just a little, on 28 August 1862 CS Major-Gen'l. Stonewall Jackson captured US General John Pope's supply depot at Manassas Junction, threatening to cut Pope off from Washington. In what seems a haze of incomprehension. Pope thought he had Jackson trapped and threw assaults against Jackson's position along an unfinished railroad grade. CS General Longstreet arrived and took up a position on Jackson's right flanks. Pope renewed his attacks on the 30th, again in a haze. After a failed Union assault into Confederate artillery, Longstreet counterattack, crushed the Union left flank, and the Army barely escaped to Bull Run. Jackson's victory proved beyond all doubt that the technological innovation of the rifle (over the musket) had heavily shifted the odd in favor of the defensive.

From 26 - 30 August 1914 the Imperial Russian Army engaged the German Imperial Army in one of the first battles of World War I. The Germans almost completely destroyed the Russian Second army.

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
26-Aug-13 Price Change % Change
Gold, $/oz 1,393.00 -2.70 -0.19%
Silver, $/oz 24.01 0.27 1.15%
Gold/Silver Ratio 58.017 -0.779 -1.32%
Silver/Gold Ratio 0.0172 0.0002 1.34%
Platinum 1,543.60 2.90 0.19%
Palladium 746.05 -4.80 -0.64%
S&P 500 1,656.78 -6.72 -0.40%
Dow 14,946.46 -64.05 -0.43%
Dow in GOLD $s 221.80 -0.52 -0.23%
Dow in GOLD oz 10.73 -0.03 -0.23%
Dow in SILVER oz 622.51 -9.83 -1.55%
US Dollar Index 81.37 0.00 0.00%
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: 1,404.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,438.31 1,450.25 1,450.25
1/2 AE 0.50 715.84 739.87 1,479.75
1/4 AE 0.25 357.92 376.96 1,507.84
1/10 AE 0.10 147.38 153.80 1,538.04
Aust. 100 corona 0.98 1,369.90 1,380.90 1,408.80
British sovereign 0.24 332.63 344.63 1,464.00
French 20 franc 0.19 262.24 269.24 1,442.09
Krugerrand 1.00 1,418.65 1,430.65 1,430.65
Maple Leaf 1.00 1,419.60 1,434.60 1,434.60
1/2 Maple Leaf 0.50 807.65 737.42 1,474.83
1/4 Maple Leaf 0.25 358.17 375.73 1,502.92
1/10 Maple Leaf 0.10 148.89 153.10 1,531.01
Mexican 50 peso 1.21 1,681.53 1,694.53 1,405.43
.9999 bar 1.00 1,409.52 1,420.52 1,420.52
SPOT SILVER: 23.33      
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 17,714.13 18,142.13 25.37
US 40% silver 1/2s 0.30 6,689.13 6,839.13 23.18
100 oz .999 bar 100.00 2,342.50 2,407.50 24.08
10 oz .999 bar 10.00 234.25 240.75 24.08
1 oz .999 round 1.00 23.43 24.18 24.18
Am Eagle, 200 oz Min 1.00 24.58 26.33 26.33
SPOT PLATINUM: 1,543.60      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,553.60 1,583.60 1,583.60
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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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