The Moneychanger
Daily Commentary
Wednesday, 6 November a.d. 2013 Browse the commentary archive

Ahead of the ECB meeting this week apparently the propagandists are trying to talk down gold, because "potentially" the ECB might cut interest rates. Duhh, lessee -- ECB cuts rates so people will borrow more & inflation will rise, & THAT will make the euro rise against gold? In today's lunatic markets -- yes, lunatic -- I guess depreciating your currency is grounds for it to rise against gold. Works for the dollar, right? Well, very briefly. Merely until reality catches up. Hide & watch.

Personally, I love all the negative publicity for silver & gold. It signals (1) the bottoming of sentiment which lays the foundation for a price reversal, and (2) the mouth-foaming desperation of the central bankers who are using their most efficient weapon, jawboning (it was Samson's favorite, too, & he was using the same jawbone) to do with propaganda what they cannot accomplish with manipulation. Or, maybe that should be viewed as just another part of the manipulation. Prince Potemkin would be proud of these, his spiritual descendants.

Stocks behaved very oddly today. The Dow Jones Industrial Average which so long & steadfastly resisted making a new high, surged 128.66 to a new high at 15,746.88, up 0.82%. S&P500 added 7.52 (0.43%) but did NOT close at a new high. Meanwhile, the Nasdaq Composite, Nasdaq 100, Russell 2000 & Wilshire 5000 all --- dropped.

Somebody needs to teach this choir to sing in tune. Bad juju when they're off key.

Dow in Silver & Dow in Gold both rose a little today, but nothing to amount to much. Dow in gold rose 0.8% (Is it really a number when it's that small?) to 11.95 oz (G$247.03). Dow in silver rose 0.21% to 724.13 oz. I still believe that both these topped at the June 27 gold & silver lows, & that those tops will hold. Trend has turned down.

Since Friday the US dollar index has made a series of lower lows & lower highs -- right, that DOES define a "downtrend." This is fairly flat or sideways, but if it breaks 80.40 might pick up steam. Longer term the dollar appears to have bottomed at 79.06 back in October, but closed today below its 50 dma (80.63), never a particularly encouraging sign for an uptrend.

Maybe the dollar is showing strength merely because I a world of wholly rotten currencies and economies, it's the prettiest hog in the wallow. That's one whale of a recommendation, ain't it?

Euro has caught at (what was) its upper channel line & 62 DMA. This wouldn't impress your eight year old. It may trade up to fill in the gap it left behind when it fell off that cliff, but that won't hardly take it to $1.3600. Today it rose 0.33% to $1.3516.

Now y'all think about it. What does a central banker want more than anything else? Stability, good old predictable stability. He doesn't want any brash, uncontained moves, so he floods the markets with propaganda before he announces anything, just to keep 'em off balance. Hogwash. Pure Tennessee hogwash, 'cept this brand is coming off European hogs.

Yen today closed 101.36, down 0.16%, trading in a tighter & tighter range, all of it kind of pointless.

Gold jumped up $9.70 today & closed at $1,317.70. Silver added 13.2 cents to end at 2174.6c. Yeah, I know, I know -- no more'n back & forth trading . . .

Or maybe not. If you take a straightedge & draw a line from the 15 October $1,251 low to the low yesterday about $1,302, as I did with the red line on the chart here http://bit.ly/17929Lh you'll find a little uptrend from October till now. That's our line in the sand, and it has squeezed gold up past the 20 DMA ($1,316.91).. Long as gold stays above that, say, tomorrow above $1,318 or so, it's in a rising trend. Sort of tautological, but there 'tis.

Likewise pull out your ruler and draw another red line on the silver chart from the 2050c low 15 October to Tuesday's low, you find another uptrend. Go look at http://bit.ly/17cyi9V

Other indicators are talking out of both sides of their mouths. Wouldn't it be funny if all those folks out there (including some of y'all) so sure that silver & gold are destined to drop to $800 & $10 were all wrong? Wouldn't it be a gigantic horse laugh if this was merely a small reaction and start of another rally? Yeah, buddy! Y'all'd just be laughing yourselves sick, watching gold & silver from the end where the rocket fire comes out.

If y'all have ears, listen.

Susan & I spent yesterday at Vanderbilt Hospital in ICU with our friend Freda Freemon and her husband. In spite of everything the doctors could do, she passed away from septic shock just 48 hours after her illness began. Thanks & praise to God for her life, & I know she will rest in peace by the grace of God & the work of Christ.

I thank all y'all who kindly prayed for her, and beg you further to pray that God would comfort her husband, Daniel, and her 6 year old daughter, Kenlee, with all the peace of Christ.

"The Lord gave, & the Lord hath taken away. Blessed be the Name of the Lord."

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
6-Nov-13 Price Change % Change
Gold, $/oz 1,317.70 9.70 0.74%
Silver, $/oz 21.75 0.13 0.61%
Gold/Silver Ratio 60.595 0.079 0.13%
Silver/Gold Ratio 0.0165 -0.0000 -0.13%
Platinum 1,465.60 17.90 1.24%
Palladium 763.80 14.05 1.87%
S&P 500 1,770.49 7.52 0.43%
Dow 15,746.88 128.66 0.82%
Dow in GOLD $s 247.03 0.20 0.08%
Dow in GOLD oz 11.95 0.01 0.08%
Dow in SILVER oz 724.13 1.53 0.21%
US Dollar Index 80.51 -0.19 -0.23%
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: 1,317.45      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,353.02 1,363.56 1,363.56
1/2 AE 0.50 671.39 694.95 1,389.91
1/4 AE 0.25 350.50 354.06 1,416.26
1/10 AE 0.10 139.54 144.92 1,449.20
Aust. 100 corona 0.98 1,282.32 1,292.32 1,318.43
British sovereign 0.24 311.99 323.99 1,376.33
French 20 franc 0.19 247.81 250.77 1,343.16
Krugerrand 1.00 1,339.85 1,350.85 1,350.85
Maple Leaf 1.00 1,332.45 1,347.45 1,347.45
1/2 Maple Leaf 0.50 757.53 691.66 1,383.32
1/4 Maple Leaf 0.25 335.95 352.42 1,409.67
1/10 Maple Leaf 0.10 139.65 143.60 1,436.02
Mexican 50 peso 1.21 1,580.38 1,591.45 1,319.94
.9999 bar 1.00 1,322.06 1,333.45 1,333.45
SPOT SILVER: 21.82      
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 16,137.55 16,387.55 22.92
US 40% silver 1/2s 0.30 6,245.15 6,395.15 21.68
100 oz .999 bar 100.00 2,172.00 2,242.00 22.42
10 oz .999 bar 10.00 223.20 224.20 22.42
1 oz .999 round 1.00 21.92 22.47 22.47
Am Eagle, 200 oz Min 1.00 23.57 24.32 24.32
SPOT PLATINUM: 1,465.60      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,490.60 1,530.60 1,530.60
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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.
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  • 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.
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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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