The Moneychanger
Weekly Commentary
Friday, 30 August a.d. 2013 Browse the commentary archive
Here's the weekly scorecard:
  23-Aug-13 30-Aug-13 Change % Change
Silver, cents/oz. 2,373.00 2,346.30 -26.70 -1.1
Gold, dollars/oz. 1,395.70 1,396.10 0.40 0.0
Gold/silver ratio 58.816 59.502 0.690 1.2
Silver/gold ratio 0.0170 0.0168 -0.0002 -1.2
Dow in Gold Dollars (DIG$) 222.32 219.29 -3.03 -1.4
Dow in gold ounces 10.75 10.61 -0.15 -1.4
Dow in Silver ounces 632.55 631.22 -1.33 -0.2
Dow Industrials 15,010.51 14,810.31 -200.20 -1.3
S&P500 1,663.50 1,632.97 -30.53 -1.8
US dollar index 81.36 82.07 0.70 0.9
Platinum 1,540.70 1,526.20 -14.50 -0.9
Palladium 750.35 722.10 -28.25 -3.8

'Twasn't much of a week for stocks, down 1.3% and 1.8%. Dollar index probably turned up this week. Dow in Gold & Dow in Silver probably are bouncing because they are striking their long term downtrend lines (strong resistance usually needs more than one attack to break). Platinum lost 0.9% while palladium took a beating, giving up 3.8%.

Stocks have probably about finished their correction and are turning up for one last rally before crashing. Closes below 14,600 or 1,590 would contradict that outlook & argue that the end of this rally from last November has ended.

Today the Dow lost 30.64 (0.21%) to end at 14,810.31. S&P500 shaved off 5.2 (0.32%) to 1,632.97.

Dow in Gold & Dow in Silver both hit and pierced their long term downtrend lines this week. It was predictable that they would bounce off it before continuing lower. Dow in gold rose 1% today to G$219.29 gold dollars (10.608 oz). Dow in Silver rose 15.16 oz or 2.5% to 631.22 oz. Don't mistake what I mean: both have turned down AND confirmed the downturn. This upward motion is only correcting the long fall we've recently seen, but they don't contradict my interpretation that the Dow measured in metals have both reversed gravityward.

US dollar index at last broke through 82 to end at 82.065, up 0.08%, above the 20 DMA & 200 DMA and touching the 50 DMA. Momentum now points up.

Mercy! Y'all ought to rejoice & dance that y'all don't own any of those nasty euros. They sank another 0.18% today to $1.3215. 200 DMA stands below at $1.3132, and when the euro breaches it, its downward speed will increase with the square of the ECB's stupidity

Yen hangeth on by its fingernails. Rose 0.17% today to 101.84 cents/Y100, but it's a lost cause, about to drop out of its intermediate upward trading channel. Has a future as bright as Constantinople in 1452.

Silver & gold completed the first furious leg of their rally this week & began a little correction. Today gold dropped $16.80 to $1,396.10, yes, below $1,400. Silver lost 62.7 cents to end Comex at 2346.3 cents.

As long as gold remains above $1,350 (most likely target for this correction) and silver above 2200c, metals remain in rally mode, and that is what I expect. Very small chance exists that they might make one final leg down as low as the June lows, but I don't expect that. All the same, humility requires that I mention it.

Here's an article I wrote for my July Moneychanger newsletter that I'd like y'all to see:

On 30 August 1781 the French fleet arrived in Chesapeake Bay to bottle up the British General Cornwallis and seal his doom.

On 30 August 1797 was born Mary Wollenstone Shelley, who wrote the novel Frankenstein.

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
30-Aug-13 Price Change % Change
Gold, $/oz 1,396.10 -16.80 -1.2
Silver, $/oz 23.46 -0.63 -2.6
Gold/Silver Ratio 59.502 -0.700 -1.2
Silver/Gold Ratio 0.0168 -0.0004 -2.6
Platinum 1,526.20 4.70 0.3
Palladium 722.10 -15.65 -2.1
S&P 500 1,632.97 -5.20 -0.3
Dow 14,810.31 -30.64 -0.2
Dow in GOLD $s 219.29 2.18 1.0
Dow in GOLD oz 10.61 0.11 1.0
Dow in SILVER oz 631.22 15.16 2.5
US Dollar Index 82.07 0.06 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: 1,393.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,425.96 1,439.20 1,439.20
1/2 AE 0.50 710.38 734.24 1,468.47
1/4 AE 0.25 355.19 374.09 1,496.35
1/10 AE 0.10 146.25 152.63 1,526.32
Aust. 100 corona 0.98 1,359.47 1,370.47 1,398.15
British sovereign 0.24 330.09 342.09 1,453.24
French 20 franc 0.19 260.24 267.24 1,431.39
Krugerrand 1.00 1,410.63 1,422.63 1,422.63
Maple Leaf 1.00 1,408.90 1,423.90 1,423.90
1/2 Maple Leaf 0.50 801.49 731.80 1,463.60
1/4 Maple Leaf 0.25 355.44 372.87 1,491.47
1/10 Maple Leaf 0.10 147.75 151.94 1,519.35
Mexican 50 peso 1.21 1,668.72 1,681.72 1,394.81
.9999 bar 1.00 1,398.78 1,409.78 1,409.78
SPOT SILVER: 23.46      
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 17,664.08 18,164.08 25.40
US 40% silver 1/2s 0.30 6,727.48 6,877.48 23.31
100 oz .999 bar 100.00 2,355.50 2,420.50 24.21
10 oz .999 bar 10.00 235.55 242.05 24.21
1 oz .999 round 1.00 23.56 24.31 24.31
Am Eagle, 200 oz Min 1.00 24.71 26.46 26.46
SPOT PLATINUM: 1,526.20      
Platinum Platypus 1.00 1,536.20 1,566.20 1,566.20
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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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