The Moneychanger
Weekly Commentary
Friday, 4 October a.d. 2013 Browse the commentary archive
Here's the weekly scorecard:
  27-Sep-13 4-Oct-13 Change % Change
Silver, cents/oz. 2,178.30 2,170.50 -7.80 -0.4
Gold, dollars/oz. 1,338.40 1,309.70 -28.70 -2.1
Gold/silver ratio 61.442 60.341 -1.100 -1.8
Silver/gold ratio 0.0163 0.0166 0.0003 1.8
Dow in Gold Dollars (DIG$) 235.67 237.90 2.23 0.9
Dow in gold ounces 11.40 11.51 0.11 0.9
Dow in Silver ounces 700.47 694.43 -6.04 -0.9
Dow Industrials 15,258.24 15,072.58 -185.66 -1.2
S&P500 1,691.75 1,690.50 -1.25 -0.1
US dollar index 80.27 80.17 -0.10 -0.1
Platinum 1,414.90 1,384.70 -30.20 -2.1
Palladium 730.80 700.95 -29.85 -4.1

Y'all probably want to read this commentary carefully, because I've changed my mind about silver & gold, but I'll explain below. Also, I may be travelling all next week, so won't send out any commentaries. God willing, I'll return on Monday, 14 October.

The week took silver & gold, platinum & palladium lower, but in the same range they've been trading in. Dow lost 1.2% & wallowed with gunwales shipping water all week long. US dollar index only showed life today, & spent the rest of the week fainting like a sixteen year old girl in a wool dress at a ball without air conditioning.

O'Bama is playing the drama like a little boy pulling the wings off flies -- mean. His remark this week that there was a danger the US might default kicked stocks in the head. Hard to imagine he didn't do that a-purpose.

Dow lost more this week than the S&P500. Dow today gained 76.1 (0.51%) to 15,072.58. S&P500 picked up 11.84 (0.71%) to 1,690.50. Dow can probably fall to 14,850 still & theS&P500 to 1,660. The jubilating will become general whatever day the debt ceiling stand-off ends, & that should take it stocks to the final high.

One of the very strongest arguments that silver & gold have bottomed is the Dow in Gold & Dow in Silver. Both bounced up today (stocks rose, metals fell minutely), but all against the backdrop of a well established downtrend. For the week the Dow in gold rose 0,9% to 11.508 oz (G$237.90 gold dollars). Dow in silver fell 0.9% to 694.43 oz.

Remember that a FALLING Dow/Gold or Dow/Silver means that metals are GAINING value against stocks, which has been the primary trend since 1999 and 2000. Forget ye not: The trend is your friend.

US Dollar Index behaved all week like a dog eating poisoned meat. Low close was 79. 763, close enough to the cliff at 79.50 to leave frost on its neck. Today it closed above 80, at 80.166, up 43.2 basis points or 0.56%. That rise might show no more than shorts closing out their profitable position for the week, so I wouldn't swing over any chasms using today's gain for a rope.

That dollar also might have dropped too low to suit the Nice Government Men of all three nations, so today the Euro & yen took tumbles. Yen lost 0.18% to 102.62, but the euro lost 0.5% to $1.3554. Euro left behind an ugly toppy patter in the last three days, a high rising day, a higher day still spiking up, then a sharp collapse today. Don't swing on that rope, either, unless you just LIKE broken bones.

Gold lost $7.70 today to close Comex at $1,309.70. Silver coughed up a tiny 3.4 cents to end at 2170.5c. Today, the picture cleared for me. You can see what I see by visiting the gold chart at and the silver chart at

From May through mid-August gold formed an upside down head & shoulders with a measured target at $1,550. Pushed out, but reached on $1,434. Now if you look there is a bigger upside-down head and shoulders, and gold is just completing the bottom of the right shoulder.

There's something else. This also appears to be the bottom of the first corrective wave of this rally, which is the lowest risk place to buy. How do we know they won't fall further? We never do, absolutely, but that H&S formation, as well as gold's behavior so far, argues it shouldn't drop further. It dropped down to the bottom of the shoulder sharply at $1,276.90, , & just as sharply reversed upward the next day. Last three days it has traded sideways, & yesterday fended off an attempt to break it that dragged it all the way to $1,302. Gold still recovered.

This interpretation would be fatally gainsaid by a close below $1,276.00. Otherwise, it will keep climbing to the neckline, now about $1,410. Once it crosses that neckline, gold will turn on the afterburner. Rule of thumb measurement yields a target of $1,675.

But I could be wrong.

LO! Now behold silver! Similar upside-down H&S appeareth on that chart, Silver this week tested the bottom of the right shoulder, and traded, like gold, back up to the top boundary of its falling wedge -- as in "wedge that usually breaks out upside." If that is correct, silver (1) must not close below 2100c, & (2) should keep on rising toward that neckline about 2500c. A breakout there targets 3183c.

Like I said, the charts today changed my mind. I'm no longer looking for the possibility of another touch toward the June lows. I believe that was THE bottom. Note carefully, however, that gold & silver must not break $1,276 or 2100c.

My mind is changed. I am buying. Not waiting any longer.

Folks, the US is choking on its own paranoia & regulations. (And by the way, NEVER fly American Airlines.) My son wanted to take his wife to Costa Rica for her birthday, & convinced my wife we should accompany them. Six months ago we made reservations through Bookit. Six months ago. American Airlines cancelled and changed our flights, making a miserable late arrival in Costa Rica and forcing us to cut a day off our trip. But here's the kicker. In all the re-booking, somebody at Bookit re-entered my name as "C. Sanders." My full name, which I never use but which the yankee government insists appear on everything, is Claude Franklin Sanders. Yesterday Susan found out that without a name on the reservation, American Airlines won't let me board. (God only knows what those poor fellows whose parent actually named them "A.J." or "B.W." will do.) Most likely this is some moronic government regulation born of the Patriot Act. Right now, I literally don't know whether I'm going to board that plane on Monday.

I don't know which I despise most, the yankee government or American Airlines. Shucks, how about just despising BOTH equally?

Every adult with a brain has pulled out of the US economy, it seems, & we already knew that brains were rarer in Washington than snow cones in hell.

Y'all have a wonderful weekend. Go home, kiss your spouse & children, and thank God that the yankee government does not yet govern EVERY aspect of your life. Otherwise y'all would starve to death by Friday.

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
4-Oct-13 Price Change % Change
Gold, $/oz 1,309.70 -7.70 -0.6
Silver, $/oz 21.71 -0.03 -0.2
Gold/Silver Ratio 60.341 -0.354 -0.6
Silver/Gold Ratio 0.0166 -0.0000 -0.2
Platinum 1,384.70 15.20 1.1
Palladium 700.95 1.75 0.3
S&P 500 1,690.50 11.84 0.7
Dow 15,072.58 76.10 0.5
Dow in GOLD $s 237.90 2.61 1.1
Dow in GOLD oz 11.51 0.13 1.1
Dow in SILVER oz 694.43 4.59 0.7
US Dollar Index 80.17 0.43 0.5
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SPOT GOLD: 1,308.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,342.32 1,350.82 1,350.82
1/2 AE 0.50 666.72 689.15 1,378.29
1/4 AE 0.25 333.36 351.12 1,404.46
1/10 AE 0.10 137.27 143.26 1,432.59
Aust. 100 corona 0.98 1,275.98 1,285.98 1,311.96
British sovereign 0.24 309.82 321.82 1,367.13
French 20 franc 0.19 244.26 251.26 1,345.79
Krugerrand 1.00 1,331.85 1,342.85 1,342.85
Maple Leaf 1.00 1,323.30 1,338.30 1,338.30
1/2 Maple Leaf 0.50 752.27 686.86 1,373.72
1/4 Maple Leaf 0.25 333.62 349.97 1,399.88
1/10 Maple Leaf 0.10 138.68 142.60 1,426.05
Mexican 50 peso 1.21 1,569.40 1,580.42 1,310.79
.9999 bar 1.00 1,312.88 1,323.88 1,323.88
SPOT SILVER: 21.62      
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 16,133.98 16,383.98 22.91
US 40% silver 1/2s 0.30 6,184.68 6,334.68 21.47
100 oz .999 bar 100.00 2,151.50 2,231.50 22.32
10 oz .999 bar 10.00 221.15 222.15 22.22
1 oz .999 round 1.00 21.72 22.52 22.52
Am Eagle, 200 oz Min 1.00 22.87 24.42 24.42
SPOT PLATINUM: 1,384.70      
Platinum Platypus 1.00 1,409.70 1,449.70 1,449.70
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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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