The Moneychanger
Daily Commentary
Tuesday, 10 December a.d. 2013 Browse the commentary archive

Well, silver & gold did it today.

Stocks, on the other hand, must have disappointed their cheerleaders. Every index fell. Dow lost 52.4 (0.33%) to 15,973.13 and punched into but closed not beneath its 20 DMA (15,966). S&P500 gave back 5.75 (0.32%) and ended at 1,808.62. Pattern in both indices is the same, a pair of descending tops. Not a good sign, unless they can turn around on the morrow & climb past the previous high. Otherwise, look out below.

Yeee-haaaaaa! All this showed far more clearly in the Dow in Gold and Dow in Silver, which both tumbled sharply. Dow in Gold ended at 12.66 oz (G$261.70 gold dollars), down 2.03% AND below the 20 DMA at 12.77 oz. That crossing under the 20 DMA confirms what looked like a head & shoulders top.

Dow in Silver did likewise. Closed down 3.21% at 782.61 oz and below the 20 DMA at 799.23.

Mercy, y'all, look at this! If this pattern completes, it will be double tops in both the DiG & DiS, June & December, and 'twill signal that silver & gold have turned up against stocks. Hold on -- we need further confirmation, like closes below the 50 DMA. MACD has already flashed sell signals for both indicators, and 12 day Rate of Change went negative in both. All right!

US DOLLAR INDEX broke 80 today. Lost 20 basis points or 0.25% to close at 79.94. There is what I take to be the neckline of a head and shoulders that started forming in 2011 that now hits the US dollar index about 79. It may be some other pattern, but since late 2011 a line from 78.10 in Spring 2013 through about 80 today has stopped every decline. Well, every decline except that dip down to 79.06 in October. Now the US Dollar Index, after a climb, is right back at that 80 support. Maybe if it falls through this time it will just keep on falling to 74.75, or 72.70? Little but air stands beneath it now.

The Euro rose 0.17% to $1.3761, clearly on its way to $1.3825 or higher. It's the battle of the junk currencies for the title, "Sorriest Fiat Money On The Planet."

Japanese yen rose 0.43% to 97.26 cents/Y100. If it breaks the last low at 96.41, who knows where it might perch?

About 6:00 a.m. Eastern time while all y'all were still snugged up tight in bed, silver broke through 2000c and gold through $1,245. Time an old slugabed like me got to work, gold was already at $1260 & silver at 2030c.

Gold ended the day on Comex at $1,262.40, up $27.10 or 2.2%. Silver finished up 61.2 cents (3.1%) at 2025.6c. Both jumped clean thru resistance at $1,250 and 2000c. Better yet, both jumped o'er their 20 DMAs ($1,251 & 1999c).

Folks, it don't get much stouter than this. Silver & gold fought off an attack at new lows for the move last week, reversed upward, and advanced steadily. MACD flashed a buy signal on Friday, and the Rate of Change for both has climbed sharply since 1 December & today entered POSITIVE territory.

What's next? (Moneychanger, are you NEVER satisfied?) No, I want to see both close above their last highs ($1,295 & well, silver did that today) & their 50 DMAs (2115c & $1,288.80).

What's more, I want both to close once again ABOVE that uptrend line from the June Low, for silver tomorrow 2160c & for gold $1,288. Wait -- did I mention that volume is rising with price, to confirm the price move? No, I didn't. Well, there 'tis.

Friends, nothing in this life is sure except that we will all exit this world feet first, but this is the best price action I've seen in gold and silver for several months.

I bought some more today.

On 10 December 1688 King James II fled London, finally freeing England from the males of the Stuart line, distinguished only by their ability to learn nothing from their fathers' stupidity.

On 12 December 1817 Mississippi was admitted to the United States as the 20th state. On 10 December 1861 Kentucky was admitted to the Confederate States. By 1860 Mississippi with Louisiana & South Carolina had the highest per capita incomes in the US.

Australians! If y'all didn't pay attention yesterday, here's another chance. Look here:

An Australian named Rod Holden has started a petition to repatriate Australia's Gold reserves. If you're an Ozzie, go to his website and think about helping,

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
10-Dec-13 Price Change % Change
Gold, $/oz 1,262.40 27.10 2.19%
Silver, $/oz 20.26 0.61 3.12%
Gold/Silver Ratio 62.322 -0.562 -0.89%
Silver/Gold Ratio 0.0160 0.0001 0.90%
Platinum 1,387.80 20.20 1.48%
Palladium 738.00 3.50 0.48%
S&P 500 1,802.62 -5.75 -0.32%
Dow 15,973.13 -52.40 -0.33%
Dow in GOLD $s 261.56 -6.61 -2.47%
Dow in GOLD oz 12.65 -0.32 -2.47%
Dow in SILVER oz 788.56 -27.23 -3.34%
US Dollar Index 79.98 -0.18 -0.22%
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: 1,261.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,299.14 1,305.45 1,305.45
1/2 AE 0.50 642.75 665.34 1,330.67
1/4 AE 0.25 335.55 338.97 1,355.90
1/10 AE 0.10 133.59 138.74 1,387.43
Aust. 100 corona 0.98 1,227.67 1,237.67 1,262.67
British sovereign 0.24 298.69 310.69 1,319.84
French 20 franc 0.19 237.25 240.28 1,287.01
Krugerrand 1.00 1,281.48 1,292.48 1,292.48
Maple Leaf 1.00 1,276.30 1,291.30 1,291.30
1/2 Maple Leaf 0.50 725.25 662.18 1,324.37
1/4 Maple Leaf 0.25 321.63 337.40 1,349.59
1/10 Maple Leaf 0.10 133.70 137.48 1,374.82
Mexican 50 peso 1.21 1,508.46 1,523.75 1,263.79
.9999 bar 1.00 1,265.71 1,277.30 1,277.30
SPOT SILVER: 20.27      
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 15,136.55 15,386.55 21.52
US 40% silver 1/2s 0.30 5,787.90 5,937.90 20.13
100 oz .999 bar 100.00 2,017.00 2,077.00 20.77
10 oz .999 bar 10.00 207.70 208.70 20.87
1 oz .999 round 1.00 20.37 20.87 20.87
Am Eagle, 200 oz Min 1.00 22.02 23.27 23.27
SPOT PLATINUM: 1,387.80      
Plat. Platypus 1.00 1,412.80 1,452.80 1,452.80
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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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