The Moneychanger
Weekly Commentary
Friday, 31 January a.d. 2014 Browse the commentary archive
Here's the weekly scorecard:
  24-Jan-14 31-Jan-14 Change % Change
Silver, cents/oz. 1,947.30 1,910.50 -36.80 -1.9
Gold, dollars/oz. 1,264.50 1,240.10 -24.40 -1.9
Gold/silver ratio 64.936 64.910 -0.026 -0.0
Silver/gold ratio 0.0154 0.0154 0.0000 0.0
Dow in Gold Dollars (DIG$) 260.29 261.69 1.40 0.5
Dow in gold ounces 12.59 12.66 0.07 0.5
Dow in Silver ounces 817.66 821.71 4.06 0.5
Dow Industrials 15,922.27 15,698.85 -223.42 -1.4
S&P500 1,794.23 1,782.59 -11.64 -0.6
US dollar index 80.46 81.37 0.92 1.1
Platinum 1,427.10 1,374.10 -53.00 -3.7
Palladium 733.90 703.00 -30.90 -4.2

Looking at the weekly scorecard forces me to ask whether the stock market's dive means that the peak we have seen is the final one, marking a 300 year top. I'm thinking. I'll let y'all know. Picture in precious metals has not yet cleared. US dollar index has resumed rising.

Let's talk hard and fast today. Stocks bounce yesterday was probably engineered by the NGM, since they lost yesterday's gains and then some today. Milestone comes when the Dow crosses below its 200 DMA (15,466) -- and stays there. Same marker for the S&P500 is 1706.44.

Today the Dow scraped off another 149.76 (0.94%) to end at 15,698.85. S&P500 gave back 11.6 (0.65%) to 1,782.59.

Both silver & gold fell today but stocks fell more, pulling down the Dow measured in metals. Dow in gold ended the day at 12.66 oz, down 0.67% Dow in silver lost 7.62 oz (0.92%) to 821.07%. Still above 20 & 50 DMA, reflecting silver's weakness against gold.

US dollar index jumped 53 basis points yesterday, and another 18 (0.22%) to 81.37 today. This brings it back to the 200 DMA at 81.51. Indicators have turned up, so maybe the dollar can breach that 200 DMA this time.

Euro looks puking sick. Gapped down two days running, lost another 0.49% today to $1.3489. Yen resumed its rise, up 0.68% to 98.01 cents/Y100.

Gold lost $2.10 today to close at $1,240.10. Silver lost 6/10 cent to end on Comex at 1910.5c.

Gold closed lower this week than last, breaking a five week winning streak. Also stopped short of the 20 week moving average. Best I can say is that on the daily chart gold remains above its 50 DMA ($1,235.41). Frankly, I can't parse this divergence between gold and silver. Which is right, the stronger gold or the weaker silver? Gold's MACD is about to flash a sell signal, so maybe gold will catch up with silver.

Silver also closed lower on a weekly basis, down three of the last six weeks, & the last two weeks running. Today's silver low came at 1907c, and really doesn't tell us much after yesterday's close. Any break below 1897c will carry silver lower. Next week gold needs to hold on above $1,210.00. Platinum and palladium are tying an anchor around gold's ankles so they need to turn up, too, before gold can rally.

Dear friends, many of you responded most generously when I asked for help for a member of our Church, Mark Hinkle, whose house burned down. Thank you most kindly. If any of you meant to send a donation but forgot, you can still send those to Christ Our Hope Church, P.O. Box 178, Westpoint, Tennessee 38486. Thank you for your compassion and your willingness to help.

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
31-Jan-14 Price Change % Change
Gold, $/oz 1,240.10 -2.10 -0.2
Silver, $/oz 19.11 -0.01 -0.0
Gold/Silver Ratio 64.910 -0.110 -0.2
Silver/Gold Ratio 0.0154 -0.0000 -0.0
Platinum 1,374.10 -6.60 -0.5
Palladium 703.00 -3.65 -0.5
S&P 500 1,782.59 -11.60 -0.6
Dow 15,698.85 -149.76 -0.9
Dow in GOLD $s 261.69 -2.02 -0.8
Dow in GOLD oz 12.66 -0.10 -0.8
Dow in SILVER oz 821.71 -7.58 -0.9
US Dollar Index 81.37 0.18 0.2
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SPOT GOLD: 1,244.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,276.86 1,285.57 1,285.57
1/2 AE 0.50 634.19 655.85 1,311.70
1/4 AE 0.25 318.65 334.15 1,336.59
1/10 AE 0.10 130.57 136.27 1,362.73
Aust. 100 corona 0.98 1,213.76 1,222.76 1,247.46
British sovereign 0.24 294.71 306.71 1,302.94
French 20 franc 0.19 234.09 237.15 1,270.21
Krugerrand 1.00 1,263.17 1,273.17 1,273.17
Maple Leaf 1.00 1,259.50 1,274.50 1,274.50
1/2 Maple Leaf 0.50 715.59 653.36 1,306.73
1/4 Maple Leaf 0.25 317.35 332.90 1,331.62
1/10 Maple Leaf 0.10 131.92 135.65 1,356.51
Mexican 50 peso 1.21 1,488.37 1,499.37 1,243.56
.9999 bar 1.00 1,248.86 1,263.50 1,263.50
SPOT SILVER: 19.14      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 23.00 25.00 32.68
VG+ Peace dollar 0.77 20.00 22.00 28.76
90% silver coin bags 0.72 14,471.60 14,721.60 20.59
US 40% silver 1/2s 0.30 5,454.55 5,604.55 19.00
100 oz .999 bar 100.00 2,414.00 1,959.00 19.59
10 oz .999 bar 10.00 191.40 197.40 19.74
1 oz .999 round 1.00 19.14 19.69 19.69
Am Eagle, 200 oz Min 1.00 20.39 21.84 21.84
SPOT PLATINUM: 1,374.10      
Platinum Platypus 1.00 1,399.10 1,439.10 1,439.10
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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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