The Moneychanger
Weekly Commentary
Friday, 20 December a.d. 2013 Browse the commentary archive
Here's the weekly scorecard:
  13-Dec-13 20-Dec-13 Change % Change
Silver, cents/oz. 1,955.90 1,941.80 -14.10 -0.7
Gold, dollars/oz. 1,235.70 1,205.10 -30.60 -2.5
Gold/silver ratio 63.178 62.061 -1.117 -1.8
Silver/gold ratio 0.0158 0.0161 0.0003 1.8
Dow in Gold Dollars (DIG$) 263.57 278.25 14.68 5.6
Dow in gold ounces 12.75 13.46 0.71 5.6
Dow in Silver ounces 805.53 835.36 29.83 3.7
Dow Industrials 15,755.36 16,221.08 465.72 3.0
S&P500 1,775.82 1,818.52 42.70 2.4
US dollar index 80.21 80.71 0.50 0.6
Platinum 1,362.00 1,331.90 -30.10 -2.2
Palladium 715.75 697.85 -17.90 -2.5

Big week for stocks, bad week for metals. Again. Dow gained 3% this week while the S&P500 gained 2.4%. US dollar index may have turned up. Gold, platinum, & palladium took a beading, down 2.5% while silver lost only 0.7% (14.1 cents). You know it ain't good when you're reduced to saying things like that.

By reaching new highs today, stocks showed that they intend to move higher still. Dow gained 42 (0.26%) to 16,221.08 & the S&P500 gained 8.92 (0.49%) to 1,818.52. This will likely continue the rest of the year, as stocks have a strong seasonal tendency to rise into year-end.

Dow in Gold and Dow in Silver blipped down after a long rise this week. Dow in Gold at end of day dropped 1.12% to 13.48 oz. Dow in Silver dropped 0.92% to 833.86 oz. Both indicators are plainly floating to higher altitudes.

Schizophrenic US dollar index pierced the downtrend line & rose as high as 81 today, only to turn and drop 8 basis points to 80.71 by day's end. Will it rise or not? I reckon it will, but if so it needs to climb over 81 next week. Euro rose 0.1% today to $1.3676 but it's uptrend seems broken. Yen turned a bit today, up 0.16% to 96.09 cents per Y100. No telling what will happen there.

Gold regained $10.10 to $1,205.10 on Comex. Silver rose 27.5 cents to 1941.8 cents.

I'm still scratching my head -- why is silver holding up better than gold? Silver's MACD hasn't crossed over in a sell signal, gold's has. Stocks have made less headway against silver than gold. Maybe it's just marginal & silver will catch up, or maybe it says something else, like a non-confirmation of weakness.

Think a minute about a double bottom. Markets make two bottoms about the same level, with a recovery inbetween. Those two bottoms mark where the market has found its footing & reverses. If silver & gold intend a double bottom, they're about there. Gold's low yesterday was $1,186 intraday, versus June's $1,179.40. Silver's low yesterday was 1910c, versus 1817c in June, although at the beginning of December silver did hit 1889c. All of that qualifies as a double bottom, because the market needn't hit the selfsame price both times.

The double bottom is one possibility for a reversal. Another is a further slide down to the low $1,100s for gold and 1700c for silver.

However they might bottom, they must flash some sign, some confirmation, they have indeed turned. We don't have that yet.

On weekly charts silver is floating just beneath its downtrend line, while gold stands at $1,203 looking up at the line at $1,350 above. An uptrend shows week after week higher prices, with only a few weeks lower. That trend must change to confirm a reversal.

Be calm. Be patient. We will likely see a metals' low by year end. Our business has considerably picked up in the last three weeks, which itself says buyers are coming back into the market.

The truth is still the truth, cause still brings effect. Years ago Merritt Newby of Alabama sent me something that has stuck with me when people heap scorn on my position & I even doubt myself:

"God has given to every man his work. It is his business to do it and the devil's business to hinder him if he can. . . Keep about your work. Do not flinch because the lion roars. Do not stop to stone the devil's dogs. . . Keep about your work. Let your aim be steady as a star. Let the world brawl and bubble. You may be assaulted, wronged, insulted, slandered, wounded, and rejected . . . Abused by foes, forsaken by friends. But see to it with steadfast determination, with unfaltering zeal, that you pursue the great purpose of your life & the object of your being, until at last you can say, 'I have finished the work You gave me to do'."

One thing we know about dealers in the gold & silver market: a large number of them would steal the quarters off a dead man's eyes. Wherefore, y'all ought to be very cautious. I got a slug of emails in the last couple of days offering "Rare Silver Dollar Coins Poised To Jump in Value" at only $39 each. Only 3,805 for sale.

Look at the fine print: Each coin is guaranteed to be "in Brilliant Uncirculated to Fine condition."

Those are technical grades, BU and F. Since BU costs about $39 at wholesale, I heartily doubt these philanthropists will send you BU. You'll be lucky to get any Fines.

These are the same coins I offered on 4 December at $26.50 each. And if you want to pay me $39 each, let me know and I'll get a TRUCKLOAD for you.

Y'all enjoy your weekend!

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
20-Dec-13 Price Change % Change
Gold, $/oz 1,205.10 10.10 0.8
Silver, $/oz 19.42 0.28 1.4
Gold/Silver Ratio 62.061 0.511 0.8
Silver/Gold Ratio 0.0161 0.0002 1.4
Platinum 1,331.90 13.90 1.1
Palladium 697.85 2.55 0.4
S&P 500 1,818.52 8.92 0.5
Dow 16,221.08 42.00 0.3
Dow in GOLD $s 278.25 -1.60 -0.6
Dow in GOLD oz 13.46 -0.08 -0.6
Dow in SILVER oz 835.36 -9.81 -1.2
US Dollar Index 80.71 -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: 1,202.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,238.58 1,244.59 1,244.59
1/2 AE 0.50 612.77 634.32 1,268.64
1/4 AE 0.25 319.90 323.17 1,292.69
1/10 AE 0.10 127.36 132.28 1,322.75
Aust. 100 corona 0.98 1,172.80 1,182.80 1,206.69
British sovereign 0.24 284.77 296.77 1,260.69
French 20 franc 0.19 226.19 229.31 1,228.21
Krugerrand 1.00 1,222.94 1,233.94 1,233.94
Maple Leaf 1.00 1,217.50 1,232.50 1,232.50
1/2 Maple Leaf 0.50 691.44 631.31 1,262.63
1/4 Maple Leaf 0.25 306.64 321.67 1,286.68
1/10 Maple Leaf 0.10 127.47 131.07 1,310.73
Mexican 50 peso 1.21 1,439.59 1,452.85 1,204.99
.9999 bar 1.00 1,206.71 1,218.50 1,218.50
SPOT SILVER: 19.34      
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 14,468.03 14,718.03 20.58
US 40% silver 1/2s 0.30 5,512.08 5,662.08 19.19
100 oz .999 bar 100.00 1,923.50 1,983.50 19.84
10 oz .999 bar 10.00 198.35 199.35 19.94
1 oz .999 round 1.00 19.44 19.94 19.94
Am Eagle, 200 oz Min 1.00 21.09 22.34 22.34
SPOT PLATINUM: 1,331.90      
Platinum Platypus 1.00 1,356.90 1,396.90 1,396.90
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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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