The Moneychanger
Daily Commentary
Monday, 23 September a.d. 2013 Browse the commentary archive

In the German elections over the weekend perennial Eurozone devotee Angela Merkel won. At least, folks think she won. In fact, as results now stand, she has not enough votes for a majority government & lost her FDP coalition partner. Might have to rule in a minority government, taking fire from all sides.

My wife will skin me & nail my hide to the barn if I don't get out of here fast, so here it comes:

Silver & gold charts have twisted my brain around to their side. Today silver lost 7.1 cents to 2180.5c while gold lost $5.60 to $1,326.90. So? So, gold did not follow through on last week's weakness, but instead has grabbed hold here around $1,325 support. The mere fact that it held on today shows strength enough.

But the chart also shows an upside-down head & shoulder with a shoulder in May, head in June, and another shoulder in early August. Neckline today comes in about $1,280, so all last week's fainting spell merely took gold for a touchback to the neckline. No cause for panic there. Now if gold broke $1,300, then we might consider just a mild spell of panic, but not much.

Silver has made a pattern much like gold's, but way more complicated. Suffice it to say that a strong support line gradually declines from the April low at 2200c to last week's low at 2123c.

Other indicators -- MACD & RSI -- are either neutral or ambiguous.

Long & short here? As long as gold clings above $1,320 or so, it's August - September correction has ended. Bear in mind that any close under $1,320 pretty well nay-says that, and a close below $1,300 fully negates that interpretation.

Stocks lost again today: Dow down 49.71 (0.32% to 15,401.38 & S&P500 down 8.07 (0.47%) to 1,701.84. Still looking like Big Bird stepped on the chart. Fifty day moving averages are probably the target.

Dow in gold and silver turned slightly down today. Nothing significant.

US dollar index looks sick. Rose 6.3 paltry basis points today, nothing. And why didn't the euro RISE today on euro-positive news of a Merkel victory? It sank 0.24%. Maybe the result of "buy the rumor, sell the news" but stinks of death to me.

On 23 September 1973 Juan Peron was re-elected president of Argentina after being overthrown in 1955. Apparently he and his supporters had not yet finished wrecking the Argentine economy & wanted another shot at it. Argentina -- like the US -- is a sobering example of how government & politics can ruin an economy. In 1910 Argentina had one of the world's top ten economies. A succession of politicians -- including Peron -- came to power aiming to "fix" things. They sure did, and they are fixing still, no matter how many new currencies later. The economic problem with Argentina has never been the people, only the government. Come to think of it, it's the same in the US!

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
23-Sep-13 Price Change % Change
Gold, $/oz 1,326.90 -5.60 -0.42%
Silver, $/oz 21.81 -0.07 -0.32%
Gold/Silver Ratio 60.853 -0.058 -0.10%
Silver/Gold Ratio 0.0164 0.0000 0.10%
Platinum 1,425.40 -6.70 -0.47%
Palladium 716.30 -4.00 -0.56%
S&P 500 1,701.84 -8.07 -0.47%
Dow 15,401.38 -49.71 -0.32%
Dow in GOLD $s 239.94 0.24 0.10%
Dow in GOLD oz 11.61 0.01 0.10%
Dow in SILVER oz 706.32 0.02 0.00%
US Dollar Index 80.46 0.06 0.08%
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SPOT GOLD: 1,322.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,355.56 1,365.48 1,365.48
1/2 AE 0.50 673.97 696.63 1,393.25
1/4 AE 0.25 336.98 354.93 1,419.70
1/10 AE 0.10 138.76 144.81 1,448.14
Aust. 100 corona 0.98 1,289.83 1,299.83 1,326.09
British sovereign 0.24 313.18 325.18 1,381.41
French 20 franc 0.19 246.91 253.91 1,359.99
Krugerrand 1.00 1,338.37 1,349.37 1,349.37
Maple Leaf 1.00 1,337.50 1,352.50 1,352.50
1/2 Maple Leaf 0.50 760.44 694.31 1,388.63
1/4 Maple Leaf 0.25 337.24 353.77 1,415.08
1/10 Maple Leaf 0.10 140.19 144.15 1,441.53
Mexican 50 peso 1.21 1,583.25 1,597.54 1,324.99
.9999 bar 1.00 1,327.13 1,338.13 1,338.13
SPOT SILVER: 21.63      
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 16,066.05 16,501.05 23.08
US 40% silver 1/2s 0.30 6,189.10 6,339.10 21.49
100 oz .999 bar 100.00 2,153.00 2,233.00 22.33
10 oz .999 bar 10.00 221.30 222.30 22.23
1 oz .999 round 1.00 21.73 22.53 22.53
Am Eagle, 200 oz Min 1.00 22.88 24.43 24.43
SPOT PLATINUM: 1,425.40      
Plat. Platypus 1.00 1,450.40 1,490.40 1,490.40
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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.

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  • 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.
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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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