The Moneychanger
Weekly Commentary
Wednesday, 27 November a.d. 2013 Browse the commentary archive
Here's the weekly scorecard:
  22-Nov-13 27-Nov-13 Change % Change
Silver, cents/oz. 1,986.20 1,963.30 -22.90 -1.2
Gold, dollars/oz. 1,244.10 1,237.80 -6.30 -0.5
Gold/silver ratio 62.637 63.047 0.410 0.7
Silver/gold ratio 0.0160 0.0159 -0.0001 -0.6
Dow in Gold Dollars (DIG$) 266.93 268.83 1.90 0.7
Dow in gold ounces 12.91 13.00 0.09 0.7
Dow in Silver ounces 808.82 819.91 11.09 1.4
Dow Industrials 16,064.77 16,097.33 32.56 0.2
S&P500 1,804.76 1,807.23 2.47 0.1
US dollar index 80.70 80.74 0.04 0.1
Platinum 1,380.90 1,351.20 -29.70 -2.2
Palladium 714.05 714.35 0.30 0.0

Tomorrow is the Thanksgiving holiday and I'm taking off Friday, so I am sending you this weekly summary today.

Leading into a holiday week in the US, most everything has travelled sideways, except for silver, gold, & palladium, which have edged down.

Oh, no! Another crisis, the Hot Sauce Crisis! The sole global source of the incomparable Sriracha chili sauce, Huy Fong Foods in Irwindale, California, has been ordered to stop emitting odors. Some neighbors complained that grinding red-hot jalapeno peppers caused breathing trouble and watery eyes. Other residents said it only made them hungry, and wondered who'd be complaining in an industrial area o'ershadowed by the smell of burning rubber. Other cities including Philadelphia and Denton, Texas, have contacted Huy Fong urging them to move there, where there are willing workers aplenty and a shortage of whiners.

Why doesn't the yankee government do something about this? How about sending a free bottle of hot sauce to everyone who signs up for Obamacare?

The US dollar index today closed below its 20 day moving average & so turned its momentum heading down. Unless the dollar can turn around & close above the last high at 81.58, it is headed back to 79. That might help silver & gold.

Euro was flat today, up 0.4% at $1.3579. However, in the past two days it has once again edged over that upper trading channel line & closed above its 20 & 50 DMAs, so the euro should keep climbing. Six days ago the yen gapped down sharply, and has tumbled since. Dropped another 0.885 today to 97.89 cents/Y100, below the last two lows & evidently headed for 96.40 cents or lower. Amazing what a powerful weapon a jawbone is, especially in a world of illusion.

Dow & S&P500 both made new all time highs today while the Nasdaq Comp made a new high for the move. Dow rose 24.53 (0.15%) to 16,097.33. S&P500 edged up 4.48 (0.25%) to 1,807.23. Both are overripe for a correction, but after that should make one last leg up into first quarter 2014.

Silver & gold won't get any relief until the Dow in Gold & Dow in Silver turn down. Today the DiG closed at another new high for the move, 13 oz. against the June high at 12.514 oz. Dow in silver finally gave in & posted a new high at 819.91 oz against the June high at 816.77 oz. Both are monstrously overbought, but that can persist quite a while. We wait.

Gold dropped $3.60 to $1,237.80 on Comex. Silver gave back 21.5 cents and ended at 1963.3 cents.

Behold, how the 5 day chart instructeth us! Overnight Monday-Tuesday gold rose to $1,255, then was slammed on the US open. Dropped to $1,245, but yesterday after the close began rising again, reached $1,254.80 overnight, then was cold-cocked again about the same time, leaving behind a huge gap on the chart from $1,294 to $1,240, and a low at $1,237.30.

Ditto silver. Only difference is that silver fell nearly to Monday's low while gold caught hold higher than Monday's $1,225.70, namely, $1,237.30. Actually, there's a modicum of hope buried in that. Also in interest rates rising a teentch today (10 year yield rose 1.48% to 2.736%). Rising rates will help silver & gold by blowing apart the Fed's Zero Interest Rate Policy.

Yet today was the first day of the move gold closed below $1,240. Hard to believe there's not one more plunge coming, and that right soon.

Keep your powder -- or, money, as the case may be -- dry because a great buying opportunity in silver & gold is coming. But we have to wait for some evidence the falling has ended. Steady. Steady. Steady.

The bull market in silver and gold has NOT ended. Keep your eyes on the Federal Reserve's balance sheet. So far they've managed to sideline about $2.5 trillion into bank reserves and keep it out of the money supply. Once interest rates rise, banks will have no incentive to leave reserves with the Fed earning 0.25%. The results will be catastrophic. The Fed remains the best friend silver and gold have.

On 27 November 1991 both houses of congress approved legislation authorizing $70 billion in borrowing authority for the Federal Deposit Insurance Corporation in response to the Savings & Loan failures. As the French say, The more this thing changes, the more it stays the same.

On 27 November 1701 Anders Celsius was born, destined to become an astronomer and inventor of the Celsius scale thermometer and the hand operated Swedish tortilla press.

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
27-Nov-13 Price Change % Change
Gold, $/oz 1,237.80 -3.60 -0.3
Silver, $/oz 19.63 -0.22 -1.1
Gold/Silver Ratio 63.047 -0.176 -0.3
Silver/Gold Ratio 0.0159 -0.0002 -1.1
Platinum 1,351.20 -19.20 -1.4
Palladium 714.35 -1.85 -0.3
S&P 500 1,807.23 4.48 0.2
Dow 16,097.33 24.53 0.2
Dow in GOLD $s 268.83 1.22 0.5
Dow in GOLD oz 13.00 0.06 0.5
Dow in SILVER oz 819.91 10.12 1.2
US Dollar Index 80.73 0.08 0.1
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: 1,239.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,275.86 1,283.30 1,283.30
1/2 AE 0.50 631.84 654.05 1,308.09
1/4 AE 0.25 329.86 333.22 1,332.89
1/10 AE 0.10 131.32 136.39 1,363.89
Aust. 100 corona 0.98 1,205.63 1,215.63 1,240.18
British sovereign 0.24 293.62 305.62 1,298.32
French 20 franc 0.19 233.23 236.29 1,265.61
Krugerrand 1.00 1,262.22 1,273.22 1,273.22
Maple Leaf 1.00 1,254.90 1,269.90 1,269.90
1/2 Maple Leaf 0.50 712.94 650.95 1,301.90
1/4 Maple Leaf 0.25 316.17 331.67 1,326.69
1/10 Maple Leaf 0.10 131.43 135.15 1,351.49
Mexican 50 peso 1.21 1,482.86 1,497.95 1,242.39
.9999 bar 1.00 1,244.24 1,255.90 1,255.90
SPOT SILVER: 19.69      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25.00 26.50 34.64
VG+ Peace dollar 0.77 22.00 24.25 31.70
90% silver coin bags 0.72 14,936.35 15,186.35 21.24
US 40% silver 1/2s 0.30 5,616.80 5,766.80 19.55
100 oz .999 bar 100.00 1,959.00 2,019.00 20.19
10 oz .999 bar 10.00 201.90 202.90 20.29
1 oz .999 round 1.00 19.79 20.29 20.29
Am Eagle, 200 oz Min 1.00 21.44 22.69 22.69
SPOT PLATINUM: 1,351.20      
Platinum Platypus 1.00 1,376.20 1,416.20 1,416.20
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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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