The Moneychanger
Weekly Commentary
Friday, 14 February a.d. 2014 Browse the commentary archive
Here's the weekly scorecard:
  7-Feb-14 14-Feb-14 Change % Change
Silver, cents/oz. 1,992.00 2,141.10 149.10 7.5
Gold, dollars/oz. 1,263.30 1,319.00 55.70 4.4
Gold/silver ratio 63.419 61.604 -1.815 -2.9
Silver/gold ratio 0.0158 0.0162 0.0005 2.9
Dow in Gold Dollars (DIG$) 258.44 253.18 -5.27 -2.0
Dow in gold ounces 12.50 12.25 -0.25 -2.0
Dow in Silver ounces 792.88 754.49 -38.39 -4.8
Dow Industrials 15,794.08 16,154.39 360.31 2.3
S&P500 1,797.02 1,838.63 41.61 2.3
US dollar index 80.74 80.18 -0.56 -0.7
Platinum 1,377.60 1,428.50 50.90 3.7
Palladium 708.60 737.40 28.80 4.1

Before I forget it, let me remind y'all that if you ever expect to swap gold for silver at spot ratios above 60:1, you had better do it quickly. I recommend swapping gold for silver now, targeting a swap back at 31:1 or better.

WOW. What a week, & much of it happened today in metals! Stocks recovered this week, running toward their soon and ultimate top. US dollar index wilted. White metals also zoomed up.

US Dollar Index melted, falling through the uptrend line that had caught it since last November. Since mid-September it has range-traded from 81.60 to 79.75, and now is drawing close to that lower boundary. It also is nearing the downtrend line from September, same line it broke through upward as December closed. A fall through that line, which stands about at the bottom of the trading range, about 80, would foretell much pain. Today the dollar index lost 18 more basis points (0.22%) to end at 80.18.

Big gainer from the Dollar index's fall was the euro, which rose 0.15% to $1.3698, beating its head on the old uptrend line it fell through in January. I have it on my list to buy euros right after I have all my teeth pulled by an orangutan wielding wire pliers. I like to pile one killer pain atop another.

Yen hardly budged today, up 0.385 to 98.22 cents/Y100. Momentum is up, NGM's determination is down -- which do y'all think will win?

I note in passing that the 10 year US treasury note yield rose 0.37% today to 2.746%. It's skating above its 20 DMA, above its 200 dma, trading sideways. Better watch it. The Federal Reserve's house of cards begins trembling when it breaks above 3.1%.

STOCKS spent the last week recovering from their gigantic January fall. Dow gained 126.8 (0.79%) to 16,154.39, S&P500 clumb 8.8 (0.48%) to 1,838.63.

Mercy, y'all, this is a doomed effort. It can end sooner, or it can end later, but end it will by end-May. Oh, the weeping, wailing, & gnashing of profits! Please, protect yourselves.

Whooo! That Dow in Silver put some HEAVY sinkers on its line today and sank, sank, sank. Ended down 4.04% (31.72 oz) at 754.14 oz, breathing hard down the neck of the 200 DMA at 738.95 oz. Crossing below that will turn momentum unarguably down.

Dow in gold lost 0.62% to close at 12.25 oz (G$253.23 gold dollars). All indicators speak with one witness: DOWN.

This week was the week & today was the day for silver and gold. Gold broke through $1,300 yesterday & the shorts went skittering today as gold soared $18.6 (1.43%) to close at $1,319.00. Silver shocked even me, vaulting 102.6 cents (5.03%, yes!) to close Comex at 2141.1c.

Where to start? First, parallel markets. Platinum & palladium have been trending up for nearly two weeks. Platinum closed on its 200 DMA today while palladium stands way above all moving averages, i.e., momentum is skyward. Gold/Bank Stock Index spread, which rises when faith in the financial system is falling and vice versa, is rising. XAU, GDX, and HUI precious metals mining stock indices have all broken out upward and crossed above their 200 DMAs this week.

GOLD very nearly broke upward through its since-August-2013 downtrend line this week, the chart shows a double bottom, other indicators are floating upward, and it has broken through its 20 week moving average.

The daily chart is just to beautiful to miss. Look here, http://bit.ly/1fngaYN Gold hath climbed straight up from an upside-down head & shoulders up through the neckline, broken through old resistance from $1,290 - $1,300, & today closed above its 200 DMA for the first time since February a year ago.

Only problem with this picture is that it can leave us so giddy that we overlook that stochastic indicator that is flashing a warning. I don't think this rally has ended, but around $1,350 - $1,360 it will likely begin losing altitude. This rally has run since 31 December 2013.

If gold sent the gold shorts skittering, silver drove all the silver-shorts clean back into the woodwork & down in the basement. Look: http://bit.ly/1bwm52i

Yesterday I said I'd be surprised if silver didn't close above 2050c today, but I was not prepared for today's explosion. Silver was pressed & packed against that April downtrend line and the tope of the range at 2050c, & when it burst through it couldn't stop until it punched clean through its 200 DMA & almost 2150c. That implies that before this rally ends silver will reach 2300c, maybe higher. Silver's weekly close today took it above the since-April 2011 downtrend line on the weekly chart.

Once more, be wary! Next week or two will likely be VERY heady in silver, but markets move up in waves, back & forth, pendulum-like.

And once more, the possibility exists but daily grows dimmer, that silver & gold might yet make one leg down to lower lows. I don't believe that will happen, but the possibility remains.

Meanwhile, I am buying.

Since anything I say about my competition is bound to sound invidious, I seldom say anything. However, I warn y'all that not everybody can be trusted. Many, many times in my almost 34 years in this business I have seen the big "players" and "cheap sellers" evaporate overnight.

The gold and silver industry works on very, very small margins, 3.5% to 1% commission, so there's a problem with "cheap prices": very little room to discount. Years ago Krugerrand Corporation in Florida (that location & California are a potential tip-off) figured out they could sell Krugerrands at a very cheap price if it didn't bother with actually buying them when it sold them to customers. Same business model as Bernie Madoff and Carlo Ponzi.

Just today a customer called & told us about a friend who had sent a large sum to a "cheap-selling" California dealer but now cannot get delivery. Before you do business with ANY gold or silver dealer, take a few moments to check them out with the unbiased Better Business Bureau.

Frankly, I have no ambitions to rank as "Cheapest Seller in the US" or "The WalMart of Silver & Gold." I know what it costs us to stay in business, and I know what sort of tailored, profitable, and professional guidance we give every customer, large & small. I figure "the workman is worthy of his hire," but if you don't, then go to the cheapest seller on the Internet and enter your order without ever talking to a human or getting any professional advice. And I hope you get delivery.

Another subject: The Moneychanger cartoonist, Bob Parsons, has written a matchless 200 page basic drawing book, "Simply Draw," with almost three hours of video. This isn't an "art" book but a manual showing how to communicate using drawing skills that anybody can learn. More than that, Bob Parsons is a hoot with a sense of humor that smacks of Gary Larson & the Far Side.

Two versions are available:

The e-version at http://bit.ly/1ji7rLt

The hard copy at http://bit.ly/1ezuxbj

I bought eight (8) copies, one for each of my children's families and one for me. Check it out at http://www.simplydrawwithbobparsons.com/simplydraw/Home.html

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
14-Feb-14 Price Change % Change
Gold, $/oz 1,319.00 18.60 1.4
Silver, $/oz 21.41 1.03 5.0
Gold/Silver Ratio 61.604 0.840 1.4
Silver/Gold Ratio 0.0162 0.0008 5.0
Platinum 1,428.50 13.50 1.0
Palladium 737.40 6.50 0.9
S&P 500 1,838.63 8.80 0.5
Dow 16,154.39 126.80 0.8
Dow in GOLD $s 253.18 -1.58 -0.6
Dow in GOLD oz 12.25 -0.08 -0.6
Dow in SILVER oz 754.49 -31.75 -4.0
US Dollar Index 80.18 -0.18 -0.2
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: 1,319.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,353.40 1,365.27 1,365.27
1/2 AE 0.50 672.23 695.17 1,390.33
1/4 AE 0.25 337.76 354.18 1,416.71
1/10 AE 0.10 138.40 144.44 1,444.41
Aust. 100 corona 0.98 1,286.52 1,295.52 1,321.69
British sovereign 0.24 312.38 324.38 1,377.99
French 20 franc 0.19 248.12 251.08 1,344.81
Krugerrand 1.00 1,341.52 1,351.52 1,351.52
Maple Leaf 1.00 1,334.10 1,349.10 1,349.10
1/2 Maple Leaf 0.50 758.48 692.53 1,385.06
1/4 Maple Leaf 0.25 336.37 352.86 1,411.44
1/10 Maple Leaf 0.10 139.82 143.78 1,437.82
Mexican 50 peso 1.21 1,582.36 1,593.36 1,321.52
.9999 bar 1.00 1,323.72 1,338.10 1,338.10
SPOT SILVER: 21.36      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 25.00 32.68
VG+ Peace dollar 0.77 20.00 22.50 29.41
90% silver coin bags 0.72 15,808.65 16,058.65 22.46
US 40% silver 1/2s 0.30 6,109.45 6,259.45 21.22
100 oz .999 bar 100.00 2,636.00 2,191.00 21.91
10 oz .999 bar 10.00 213.60 219.60 21.96
1 oz .999 round 1.00 21.36 21.91 21.91
Am Eagle, 200 oz Min 1.00 22.86 24.16 24.16
SPOT PLATINUM: 1,428.50      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 1,453.50 1,493.50 1,493.50
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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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