The Moneychanger
Weekly Commentary
Friday, 8 November a.d. 2013 Browse the commentary archive
Here's the weekly scorecard:
  1-Nov-13 8-Nov-13 Change % Change
Silver, cents/oz. 2,180.40 2,130.70 -49.70 -2.3
Gold, dollars/oz. 1,313.10 1,284.50 -28.60 -2.2
Gold/silver ratio 60.223 60.285 0.060 0.1
Silver/gold ratio 0.0166 0.0166 -0.0000 -0.1
Dow in Gold Dollars (DIG$) 245.83 253.66 7.83 3.2
Dow in gold ounces 11.89 12.27 0.38 3.2
Dow in Silver ounces 716.18 739.75 23.57 3.3
Dow Industrials 15,615.55 15,761.78 146.23 0.9
S&P500 1,761.64 1,770.61 8.97 0.5
US dollar index 80.72 81.24 0.52 0.6
Platinum 1,449.40 1,441.10 -8.30 -0.6
Palladium 737.70 757.35 19.65 2.7

It was an aching week for silver & gold, while the US dollar and stocks rather enjoyed it. No market seems to have changed its mind this past week, except maybe bonds, but looks can deceive.

US dollar index gained 38.7 basis points today (0.5%), climbing at last over the fence at 81. Next test for the dollar is, "Can you climb through the 200 DMA (81.78)?" It appears so. Dollar will reach for 83.00 if it bursts through the 200 DMA.

Euro lost another 0.43% today & ended at $1.3360. Bottom is dropping out. Once it crosses the 200 DMA at $1.3230 its fall will accelerate.

Yen yesterday made a strange, huge move from down to up, then reversed most of that today. Lost 1.05% to end at 100.87. NGM must be nervous, & getting sloppy, letting the yen trade like that.

US 10 year treasury note yield rose sharply today (=bond prices fell) and closed at 2.746, up 5.09% and above its 50 DMA (2.689%). Dollar rose, bonds fell? The kept & clueless media laid the blame on a better than forecast unemployment report today. They "reason" that the good unemployment report fueled speculation that the fed might taper sooner than expected. Beneath all this lies a deep anxiety that the bond bubble Ben Bernanke blew up with his Zero Interest Rate Policy might be bursting. The 10 year note broke (as did the 30 year) in June of this year. Although they have recovered some across the fall, the end & further fall shows in the chart. When this bubble bursts in earnest, they'll be playing "Hell Broke Loose in Georgia" in the bond market.

Despite strength today, I reckon stocks next week will drop after their long rise. This will be sharp & raise blisters on your eye-balls, but shouldn't carry too far. One more rise left in stocks yet. These big moves that slam & lurch from side to side show confusion, not strength. Dow today ended up 167.80 (down 152.90 yesterday) at 15,761.78. S&P500 gained 23.46 or 1.34% today after losing 23.34 yesterday. Ended at 1,770.61.

Last few days have sent the Dow in Gold & Dow in Silver much higher. I have to infer (absent a big drop contradicting) they are headed for those June highs at 12.514 oz & 816.77 oz. Ended today at 739.40 oz & 12.27 oz. Catches my eye that the Dow in Silver has not regained nearly as much territory as the Dow in Gold, showing silver is stronger against stocks than gold. Another inference from this chart guesses that silver & gold may drop toward their June lows, but silver will stop higher than June.

Gold lost 1.8% today ($23.90), falling to $1,284.50. Silver lost "only" 1.5% or 33.2 cents, ending at 2130.7c.

The rising trend line from Gold's $1,179.40 June low through the October $1,251 low now becomes the next target. Today that line hits about $1,265. If that doesn't hold, look at $1,180 again.

Silver's rising trend line from the same bottoms lies today a little above 2100c. Below that, 2000c might catch, or 1900c.

To gainsay this gloomy outlook gold needs to close suddenly above $1,330 and silver above 2300c.

Both metals have a seasonal tendency to post lows in September. Two years out of the last 14, gold has made its yearly low in November. But not once in all that time is there a December low. Lots in January.

The long bull markets in silver & gold have NOT ended. All the ingredients are in place to send them into their next rally. Y'all will swallow hard & swear I'm a lunatic, but you'd better use these declines as opportunities to buy more. Watch close. Stay calm. The federal government & the Federal Reserve are both on gold and silver's side.

On 9 November 1226 Louis IX succeeded Louis VIII as King of France. The change in monarchs came during a severe name shortage in France when almost every man in France answered either to Jean or Louis. Not until new name technology surfaced in the early 19th century was the shortage relieved with a few Henris, Alberts, & Justins.

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
8-Nov-13 Price Change % Change
Gold, $/oz 1,284.50 -23.90 -1.8
Silver, $/oz 21.31 -0.33 -1.5
Gold/Silver Ratio 60.285 -1.112 -1.8
Silver/Gold Ratio 0.0166 -0.0003 -1.5
Platinum 1,441.10 -13.90 -1.0
Palladium 757.35 -1.25 -0.2
S&P 500 1,770.61 23.46 1.3
Dow 15,761.78 167.80 1.1
Dow in GOLD $s 253.66 7.31 3.0
Dow in GOLD oz 12.27 0.35 3.0
Dow in SILVER oz 739.75 19.10 2.7
US Dollar Index 80.85 0.36 0.4
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: 1,287.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,322.57 1,332.87 1,332.87
1/2 AE 0.50 656.27 679.31 1,358.63
1/4 AE 0.25 342.61 346.10 1,384.39
1/10 AE 0.10 136.40 141.66 1,416.58
Aust. 100 corona 0.98 1,253.47 1,263.47 1,288.99
British sovereign 0.24 304.97 316.97 1,346.50
French 20 franc 0.19 242.24 245.23 1,313.51
Krugerrand 1.00 1,310.98 1,321.98 1,321.98
Maple Leaf 1.00 1,302.80 1,317.80 1,317.80
1/2 Maple Leaf 0.50 740.49 676.10 1,352.19
1/4 Maple Leaf 0.25 328.39 344.49 1,377.95
1/10 Maple Leaf 0.10 136.51 140.37 1,403.70
Mexican 50 peso 1.21 1,544.81 1,555.70 1,290.29
.9999 bar 1.00 1,292.31 1,303.80 1,303.80
SPOT SILVER: 21.47      
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 15,883.73 16,133.73 22.56
US 40% silver 1/2s 0.30 6,140.43 6,290.43 21.32
100 oz .999 bar 100.00 2,136.50 2,206.50 22.07
10 oz .999 bar 10.00 219.65 220.65 22.07
1 oz .999 round 1.00 21.57 22.12 22.12
Am Eagle, 200 oz Min 1.00 23.22 23.97 23.97
SPOT PLATINUM: 1,441.10      
Platinum Platypus 1.00 1,466.10 1,506.10 1,506.10
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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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