The Moneychanger
Daily Commentary
Tuesday, 12 November a.d. 2013 Browse the commentary archive

One of the meanest things about trying to read market charts is your own mind stabbing you in the back, wheedling & betraying. The chart says what it says, not what you want it to say. And sometimes the chart speaks out of both sides of its mouth.

What do we know? Both silver & gold have been trending down since mid-August. They made a break for the old highs in November, and failed wretchedly. Not enough buyers.

I've been watching the uptrend (green line) on both the gold & silver charts. See gold here at http://bit.ly/17929Lh & silver at http://bit.ly/1aRU43I.

Today gold lost $9.90 (0.8%) to close at $1,271.10, smack on that uptrend line. Silver pierced the line and closed below it. About the only thing that might create optimism is that both have been falling four days, & today was the largest fall for silver. That argues for at least a small bounce.

I've thought over this some much I feel like I've got steel ball-bearings bouncing around in my empty skull. Here's what it boils down to: if simply printing new money can really float the stock market up forever & hold together an economy riddled with debt-induced mal-investment WHILE the dollar RISES & interest rates are kept near zero, then the Elite & their central bankers have repealed the economic law of gravity, and I don't know sic 'em from come here. In fact, I'm even stupider than I thought I was.

Something in my nature screams and wails like a banshee at the thought that Our Masters have repealed, nay, co-opted reality to their will -- call it my unshakeable, foundational conviction that sooner or later justice will be done, that reality will have its revenge. If that's not so, then I'll just lie down here in this ditch by the side of the road & let y'all cover me up. I'll go quietly.

In the meantime, I'm gonna stay in the boat I came in. I'll keep taking this beating a little longer, because I know (if any history teaches anything) that this bubble will blow up, and that silver & gold will begin rallying again.

I'm Scotch-Irish. We put up with the English for 100s of years, then Indians, then yankees, hookworm, pellagra, boll weevils, & sharecropping landlords, & we're still here. If we can't beat Our Masters any other way, we'lll outlast 'em.

Stocks stumbled today. Dow lost 32.43 (0.21% to 15,750.67. S&P500 lost 0.24% (4.2) to 1,767.69. If they can go higher from here, they'll go a lot higher. However, it seems more likely from the charts that a correction lies before them.

The Dow in Silver is literally at the upper limit of its downtrend line, Dow in Gold slightly above the same. If they don't turn down soon, they will be signaling more pain for silver & gold investors.

US dollar index gained a huge 1.6 basis points today & ended at 81.09. Stalled here below 81.50. Whole world it seems, is expecting a dollar rally. Maybe so.

Yen is flat lining just above 100 cents. Closed today down 0.47% to 100.34. Euro rose today to fill a gap, up 0.21% to $1.3435.

Just hang on to your gold and silver. Be calm. Keep your eyes on the horizon, not on the shell game right in front of you. The end of this correction is near.

On 12 November 1859 the first flying trapeze act was performed at the Cirque Napoleon in Paris by Jules Leotard. As you may have guessed, he also designed the garment that bears his name.

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
12-Nov-13 Price Change % Change
Gold, $/oz 1,271.10 -9.90 -0.77%
Silver, $/oz 20.77 -0.50 -2.37%
Gold/Silver Ratio 61.205 0.985 1.64%
Silver/Gold Ratio 0.0163 -0.0003 -1.61%
Platinum 1,437.80 7.20 0.50%
Palladium 741.85 -12.20 -1.62%
S&P 500 1,767.69 -4.20 -0.24%
Dow 15,750.67 -32.43 -0.21%
Dow in GOLD $s 256.15 1.46 0.57%
Dow in GOLD oz 12.39 0.07 0.57%
Dow in SILVER oz 758.41 16.44 2.22%
US Dollar Index 81.09 0.02 0.02%
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: 1,267.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,301.21 1,311.35 1,311.35
1/2 AE 0.50 645.66 668.34 1,336.69
1/4 AE 0.25 337.07 340.51 1,362.03
1/10 AE 0.10 134.20 139.37 1,393.70
Aust. 100 corona 0.98 1,231.98 1,241.98 1,267.07
British sovereign 0.24 300.04 312.04 1,325.58
French 20 franc 0.19 238.32 241.35 1,292.71
Krugerrand 1.00 1,291.07 1,302.07 1,302.07
Maple Leaf 1.00 1,282.00 1,297.00 1,297.00
1/2 Maple Leaf 0.50 728.53 665.18 1,330.35
1/4 Maple Leaf 0.25 323.09 338.92 1,355.69
1/10 Maple Leaf 0.10 134.30 138.10 1,381.03
Mexican 50 peso 1.21 1,516.80 1,530.62 1,269.49
.9999 bar 1.00 1,271.43 1,283.00 1,283.00
SPOT SILVER: 20.70      
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 15,301.00 15,551.00 21.75
US 40% silver 1/2s 0.30 5,914.75 6,064.75 20.56
100 oz .999 bar 100.00 2,060.00 2,130.00 21.30
10 oz .999 bar 10.00 212.00 213.00 21.30
1 oz .999 round 1.00 20.80 21.35 21.35
Am Eagle, 200 oz Min 1.00 22.45 23.20 23.20
SPOT PLATINUM: 1,437.80      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,462.80 1,502.80 1,502.80
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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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