The Moneychanger
Daily Commentary
Wednesday, 4 December a.d. 2013 Browse the commentary archive

Well, you'd better pay attention to details. I overlooked a little one yesterday & got stung for it. More below.

It's really instructive to read media reports about stocks. Anyone not biased toward stocks would look at the chart and say, "Whoa! A correction has begun! After all, it has (1) a key reversal, confirmed three days, & (2) a close below the 20 day moving average (15,917.84)." Instead the media reports that stock traders are "baffled" by the employment reports. Another case where you can just ignore the news and listen to the chart.

The Dow lost 24.85 (0.16%) today to perch finally at 15,889.77. S&P500 lost 2.34 (0.13%) to end at $1,792.81, not quite below the 20 DMA (1,788.36).

At the end of the day, just like at the end of a football game, it doesn't matter how much you came back from your loss at halftime, it matters only what the final scoreboard said. Dow's low came today at 15,791 & S&P500's at 1,779. Even though they climbed back to nearly unchanged, both still closed lower.

The Dow in Gold & Dow in Silver added depth to the story. Dow in Gold was off sharply, from a 13.138 ounce (G$271.59 gold dollar) high two days ago to 12.79 oz today (basis end of day). Dow in silver dropped 3% today to 807.61 oz, down from the high at 836.19 oz on Monday.

All this looks very promising, but we must see some milestone crossed for confirmation. MACD is rolling over but hasn't yet crossed, Rate of Change has turned down, RSI is moving off overbought, but still I need some further confirmation.

The HUI gold stock index appeared to have broken down last week, i.e., below its June low. This comes after an apparent double bottom with June in October. If it could climb above resistance about 210 again, it would encourage gold.

US dollar index punched its enemies in the eye today, but did nothing to prove its intention. Rose a mighty 1.6 basis points, which you can almost see with an electron microscope. Days range was a bit narrower than the last two days, but couldn't through the 20 DMA (81.87). Meanwhile, the MACD is calling for lower prices.

After a wide ranging day when it tested the 50 and 62 day moving averages, the Euro closed up 0.02%, essential unchanged at $1,3594. Looks as if it intends to move up more than down, but stalled here at $1.3600. A break through that mark would send it jumping higher.

Yen made good yesterday's threat to rally by climbing another 0.08% to 97.70 cents/Y100. Still nothing to excite anyone here.

Yield on the 10 year Treasury note today rose 2.38% to 2.841%, gapped up actually, although traded in a very narrow range. It stands now right at the last little peak, so if it rises much more it will aim for 2.984%, the last high. Bond rates easing upward must make Ben Bernanke sweat bullets and Janet Yellen grow a mustache.

Here's' where I messed up not paying attention to details. Yesterday end of day gold price showed the first half of a key reversal. Aww, I thought, it fell sixty cents on the Comex. Besides, silver showed no such gumption, so it probably won't amount to a hill of beans.

Wrong. Gold rose $26.50 today to $1,248.20. Let us, however, hold on to our chapeaux. Gold must close above $1,252 to confirm this is anything more than a corrective bounce. Then a rally needs to be confirmed by a close over $1,295.

There's more good news, but only hints & whispers. Rate of Change has turned up. MACD is rolling up. Volume surged today, confirming the rising price. But none of these have crossed that red line yet, just as gold hasn't yet confirmed with a close over $1,252.

Ohh, but I'm itching all over.

Silver added 76.3 cents to close Comex at 1977.4c. Yet here, too, for all the zest it remained below the needful level, 2005c.

Wait, wait -- look at that! Silver posted the first half of a key reversal. Traded to a new low at 1889c then ended the day higher -- much higher -- at 1977.4c.

Oh, yes -- a close higher tomorrow would confirm gold's key reversal (confirmed today).

More: Markets rarely behave exactly as everyone expects, & the more that expect a certain thing, the less likely it is. Even gold & silver's friends seem to think they must yet make lower lows. Well, maybe, but maybe the waterfall on Monday was THE low. Tomorrow will tell that tale.

This may be the upturn we've been waiting for or a mere bounce. That's why we need confirmation. SPECIAL OFFER: Inventory Cleanup

I've had these pre-1905 Morgan silver dollars hanging around forever but I don't get a lot of call for them so here's your chance for a great buy. Inventory must move, so I'd like to say good-bye to these.

OFFER No. 1.

Seventy-five (75) each pre-1905 Morgan, silver dollars at $26.50 each, for a total of $1987.50 plus $35 shipping or $2,022.50. These are not bright, shiny uncirculated coins, all are simply graded strict Very Good or better, no culls, no rim dings, full rims, etc. Each coin contains 0.765 troy ounce of silver, allowing wear for circulation. Great coin for survival. I have only six (6) lots.

OFFER No. 2.

One hundred Thirty-five (135) each pre-1905 Morgan, silver dollars at $26.50 each, for a total of $3,577.5 plus $35 shipping or $3612.50. Same as the coins in Offer No. 1, above, but I only have one lot this size. This is the balance lot, so if I come up short I'll reduce the quantity and adjust the total price.

OFFER No. 3.

Eight-five (85) each pre-1905 Morgan, CULL silver dollars at $23.00 each, for a total of $1,955.00 plus $35 shipping or $1,990. A "CULL" dollar won't meet the grade of Very Good or better. Worn and might have rim dings or rims worn down in spots, but won't quite reach an honest Very Good. Another great survival coin. I have three (3) lots only.

OFFER No. 4.

One hundred Twenty-Nine (129) each pre-1905 Morgan CULL silver dollars at $23.00 each, for a total of $2,967.00 plus $35 shipping for a grand total of $3,002.00. This is a balance lot so if my inventory comes up short, I will reduce the quantity and adjust the total price.

Special Conditions:

First come, first served, and no re-orders at these prices. I will write orders based on the time I receive your e-mail.

We will not take orders for less than the minimum shown above.

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It increases your chances of getting your order filled if you offer me a second choice, e.g., "I want to order One of Lot 3, but if not available will take One of Lot 1." ORDERING INSTRUCTIONS:

1. You may order by e-mail only to offers@the-moneychanger.com. No phone orders, please. Please do NOT order by replying to this email, because it will delay your email.

Your email must include your complete name, address, & phone number. We cannot ship to you without your address. Sorry, we cannot ship outside the United States or to Tennessee.

Repeat, you must include your complete name, address, and phone number. Our clairvoyant quit without warning last week, I tripped, dropped, & smashed my crystal ball, & our fortune-teller is on strike, so I can no longer read your mind.

2. When you buy from us, we cannot later change or cancel the trade. We are giving you our word that we will sell at that price, & you are giving us your word that you will buy at that price, regardless what later happens in the market, up or down.

If you break your word to us, we will never again do business with you.

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4. "First come, first-served" means that we will enter the orders in the order that we receive them by e-mail.

5. If your order is filled, we will e-mail you a confirmation. If you do not receive a confirmation, your order was not filled.

6. You will need to send payment by personal check or bank wire (either one is fine) within 48 hours. It just needs to be in the mail, not in our hands, in 48 hours.

7. "No Nag Basis" means that we allow fourteen (14) days for personal checks to clear before we ship. Want your order faster? Send a bank wire, but that's not required. Once we ship, the post office takes four to fourteen days to get the registered mail package to you. All in all, you'll see your order in about one month if you send a check.

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-Dec-13 Price Change % Change
Gold, $/oz 1,248.20 26.50 2.17%
Silver, $/oz 19.77 0.76 4.01%
Gold/Silver Ratio 63.123 -1.140 -1.77%
Silver/Gold Ratio 0.0158 0.0003 1.81%
Platinum 1,375.10 20.20 1.49%
Palladium 728.60 14.55 2.04%
S&P 500 1,792.81 -2.34 -0.13%
Dow 15,889.77 -24.85 -0.16%
Dow in GOLD $s 263.16 -6.13 -2.28%
Dow in GOLD oz 12.73 -0.30 -2.28%
Dow in SILVER oz 803.57 -33.56 -4.01%
US Dollar Index 80.62 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: 1,245.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,282.87 1,289.09 1,289.09
1/2 AE 0.50 634.70 657.00 1,314.00
1/4 AE 0.25 331.35 334.73 1,338.91
1/10 AE 0.10 131.92 137.01 1,370.05
Aust. 100 corona 0.98 1,211.07 1,221.07 1,245.74
British sovereign 0.24 294.95 306.95 1,303.95
French 20 franc 0.19 234.28 237.33 1,271.21
Krugerrand 1.00 1,266.67 1,277.67 1,277.67
Maple Leaf 1.00 1,260.50 1,275.50 1,275.50
1/2 Maple Leaf 0.50 716.16 653.89 1,307.78
1/4 Maple Leaf 0.25 317.60 333.17 1,332.69
1/10 Maple Leaf 0.10 132.02 135.76 1,357.60
Mexican 50 peso 1.21 1,489.56 1,504.70 1,247.99
.9999 bar 1.00 1,249.86 1,261.50 1,261.50
SPOT SILVER: 19.72      
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 14,850.55 15,100.55 21.12
US 40% silver 1/2s 0.30 5,625.65 5,775.65 19.58
100 oz .999 bar 100.00 1,962.00 2,022.00 20.22
10 oz .999 bar 10.00 202.20 203.20 20.32
1 oz .999 round 1.00 19.82 20.32 20.32
Am Eagle, 200 oz Min 1.00 21.47 22.72 22.72
SPOT PLATINUM: 1,375.10      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,400.10 1,440.10 1,440.10
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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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