The Moneychanger
Daily Commentary
Saturday, 4 January a.d. 2014 Browse the commentary archive

Something very odd and very encouraging happened in gold today. I'll explain later.

Stocks continued to trip and stumble today, tracing out a reversal. All indices fell, and the Dow fell 44.89 (0.27%) to 16,425.10. It tried to rally out of the gate, but fell sharply before noon. Traded underwater until about 2:00, then tried to rally, peaked its head above the surface of unchanged, then sank again. Very weak.

S&P500 lost 0.25% (4.6 points) to end at 1,826.77. Clearly a correction is brewing -- or better, has begun.

Dow in Gold & Dow in silver are yea-saying both lower stock prices and higher prices for metals. Even with gold lower at Comex close, the Digs lost 0.25% to 13.28 oz (G$274.52 gold dollars). The 20 day moving average at 13.25 can feel the DiG's breath on its neck.

Dow in silver lost 0.22% to 814.74 oz today, & fell below its 20 DMA (818.8). Both indicators remain above their 50 DMA (783.55 oz & 12.71 oz), which roughly marks their trading channel's lower boundary line. To make it clearer, a fall through that level will be a lot like diving with an anvil tied to your ankle.

By the way, the gold mining stock indices are still encouraging. GDX, XAU, & HUI all rose slightly today. All have turned up, but all need to confirm by rallying higher.

US dollar index today swooned, whether on bad economic numbers from the ISM report, or Janet Yellen's confirmation as the new head criminal at the Fed, no one can say. If we lived in a rational world, the appointment of a mouth-foaming inflationist as head currency guardian would have people selling dollars like the Russians were on Main Street. Anyhow, the dollar lost 26 basis points (0.32%) to 80.78, turning back to kiss the downtrend line good-bye. Technically, dollar index remaineth "broken-out" above its downtrend.

Euro made time at the dollar's expense, up 0.35% to $1.3636. However, buying the euro would be like taking a job carrying fruit jars of nitroglycerin by hand riding a goat up Pike's Peak -- 'tain't no job with a future. Euro has already made a double peak, leaving behind an island reversal on this last one, and when it clears $1.3575, it will dive like one of those Mexicans off the cliffs at Acapulco. Only problem will be -- whoops! -- somebody drained the ocean.

Yen seems to have turned up today, breaking through the downtrend line. Added 0.66% to end at 95.99 cents/Y100. Faced with a choice of buying the yen or a dose of the flu, I reckon I wouldn't have to ponder long to choose the flu.

Here's what happened in gold. "Somebody" early this morning dumped one huge 11,660 contract sell order (1,166,000 ounces) on the futures market, BUT IT FAILED TO BREAK THE PRICE. Gold dropped $30 an ounce in less than a minute, but instead of triggering an avalanche of new selling, gold quickly rebounded. The trick "somebody" has been playing since since April no longer works.

What does that say? Gold has been shaken out of the weak hands, & loads of sellers are ready to buy at lower prices. That event helps confirm my working assumption that silver & gold bottomed on 31 December, and have completed the 2011-2013 correction by posting double bottoms with the June lows.

That said, bear in mind we need to witness confirmations.

It's sort of like that wonderful girl you have your eye on. It's progress when she accepts your offer of a date, but confirmation when she accepts your proposal of marriage.

But at Comex close gold had lost 60 cents to $1,237.80 & silver 10.5 cents to 2007.7c. Considering the pounding gold took, that's not bad.

Now look: gold & silver both remain ABOVE their 20 day moving average, so short term momentum is upward. Both are within spitting distance of their 50 DMAs ($1,258.65 & 2044c). All other indicators are signaling higher prices, and the 12 day rate of change just today turned up.

What about Unconfirming? Well, a gold close below $1,195 or silver close below 1935 cents would gainsay my rally assumption. Even aware of that, I'm riding this wave.

I have Thirteen (13) one hundred ounce silver bars, Engelhard, Johnson-Matthey, or equal, that I will sell in lots of four (4), Five (5) or one lot of Thirteen at $2120 each, plus $35/order shipping. That's about $50 a bar below usual retail. First emails to buy 'em. Remember that all sales are final, whether the market rises or falls tomorrow. You'll come nearer getting a fill if you say "13 or fewer." If you order 'em, you bought 'em. Include your name & phone number in your email. I don't read minds since I lost mine. No re-orders at that price.

Today is the celebration of the Epiphany, the manifestation of Christ to the Gentiles embodied in the visit of the Three Magi to the infant Jesus. It is also the 12th and final day of Christmas.

On 6 January 1941 President Frankiln D for Deficit Roosevelt delivered his Four Freedoms speech: Freedom of speech, freedom of worship, freedom from fear, and freedom from silly political speeches promising impossibilities. Wait, wait -- did I get that right?

If you like ORGANIC stone-ground grits, plennta, popcorn, or rolled oats, visit McEwen & Sons, www.mcewenandsons. Susan & I have a tough time finding organic corn products. These folks produce a wonderful product and it does NOT contain GMOs. Tell 'em The Moneychanger sent you. I have no financial interest in making this recommendation, I just like their products and want to share them with y'all.

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
6-Jan-14 Price Change % Change
Gold, $/oz 1,237.80 -0.60 -0.05%
Silver, $/oz 20.08 -0.11 -0.52%
Gold/Silver Ratio 61.653 0.291 0.47%
Silver/Gold Ratio 0.0162 -0.0001 -0.47%
Platinum 1,413.70 2.20 0.16%
Palladium 737.60 7.30 1.00%
S&P 500 1,826.77 -4.60 -0.25%
Dow 16,425.10 -44.89 -0.27%
Dow in GOLD $s 274.31 -0.62 -0.22%
Dow in GOLD oz 13.27 -0.03 -0.22%
Dow in SILVER oz 818.11 2.03 0.25%
US Dollar Index 80.78 -0.26 -0.32%
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: 1,236.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,272.56 1,279.98 1,279.98
1/2 AE 0.50 630.21 652.36 1,304.72
1/4 AE 0.25 329.01 332.36 1,329.45
1/10 AE 0.10 130.98 136.04 1,360.37
Aust. 100 corona 0.98 1,206.15 1,216.15 1,240.72
British sovereign 0.24 292.87 304.87 1,295.10
French 20 franc 0.19 232.62 235.69 1,262.41
Krugerrand 1.00 1,258.96 1,269.96 1,269.96
Maple Leaf 1.00 1,251.70 1,266.70 1,266.70
1/2 Maple Leaf 0.50 711.10 649.27 1,298.54
1/4 Maple Leaf 0.25 315.36 330.82 1,323.27
1/10 Maple Leaf 0.10 131.09 134.80 1,348.00
Mexican 50 peso 1.21 1,479.04 1,494.09 1,239.19
.9999 bar 1.00 1,241.03 1,252.70 1,252.70
SPOT SILVER: 20.13      
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 15,107.95 15,357.95 21.48
US 40% silver 1/2s 0.30 5,746.60 5,896.60 19.99
100 oz .999 bar 100.00 2,003.00 2,098.00 20.98
10 oz .999 bar 10.00 206.30 207.30 20.73
1 oz .999 round 1.00 20.23 20.73 20.73
Am Eagle, 200 oz Min 1.00 21.88 23.13 23.13
SPOT PLATINUM: 1,413.70      
Plat. Platypus 1.00 1,438.70 1,478.70 1,478.70
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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.

Other Important Information

This is not an offer to buy or sell. Prices subject to change without notice. To enter an order, call us at (888) 218-9226 or (931) 766-6066. Sorry, no sales to Tennessee.

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