The Moneychanger
Daily Commentary
Tuesday, 4 March a.d. 2014 Browse the commentary archive

The world didn't end last night so the stock touts crawled out and went to work with re-doubled efficiency. Dow made back all yesterday's losses and then some. Closed up 227.85 (1.41%) to 16,395.88. S&P500 outdid the Dow, rising 28.18 (1.53%) to another new all-time high at 1,873.91. The non-confirmation continues. Nasdaq Composite, Nasdaq 100, Russell 2000, and Wilshire 5000 all made new highs but the Dow did not.

Stocks' big jump knocked the Dow in metals back. After touching its 200 Day Moving Average headed down yesterday, the Dow in Gold today touched its 20 DMA headed up. Probably about to see a correction of that long fall from December. DiG closed up 2.35% at 12.25 oz (G$253.23 gold dollars).

Dow in silver crossed above its 20 DMA (764.93). Rose 2.47% to 772.59 oz. (S$998.95 silver dollars). Here, too, expect an upward correction.

The US Dollar Index barely improved its gains by rising 7 basis points (0.08%). Nothing inspiring here and it remains in a downtrend since 1 February, which has only traded in the same range prevailing since September. The euro reclaimed yesterday's losses during the day, but ingloriously lost all that, closing up 0.01% (Can y'all see that? Maybe I've got a hair in my eye.) to $1.3736. Long as trouble brews in Ukraine, euro will have a hard row to hoe. Somebody shot the yen with a silver bullet today. It dropped -- gapped down -- 0.81% to 97.79 cents/Y100.

Platinum rose $3.40 today to $1,463.50 while palladium jumped $13.90 to $763.90. Why? Because almost all the platinum and palladium in the world comes from just two places, Russia and southern Africa. About 75% of the platinum comes from southern Africa and 25% from Russia, while 25% of the palladium comes from Africa and 75% from Russia.

As I feared yesterday, gold did not retain its war-inspired gain. It held on to part of it, but dropped $12.30 (0.91%) to $1,337.80. Silver lost 26 cents (1.2%) to 2118.8c.

Intraday gold retraced all its gains yesterday but in the end closed off the day's lows. Believe it or not, Gold has quite a ways to fall just to intersect its rising trend line, now at $1,303.66. It could fall to the neckline where it broke out, now about $1,280, and make only a routine correction in a rally.

Silver kissed its 200 DMA (2102c) but climbed above that to close at 2118.8c. If it minds to keep rising, a likely place for silver to stop first would be 2075c, the upper boundary of the range it broke through on 14 February. Silver has more humiliating work to do below, as does gold.

Some friends and I get together for supper about once a month for our Middle Tennessee Postprandial Philosophical Society to keep us from going native. Our jumping off point this month was a 1976 essay by Sir John Glubb [sic] called "The Fate of Empires & Search for Survival." Glubb discusses a number of empires and shows that they all pass through the same development, from pioneer to decadence. You'll find it at http://bit.ly/1fFlYSZ It will give you a useful framework for understanding the state of the present American empire.

On 4 March 1681 England's King Charles II (Stuart) did one of the few good things in his reign, granting a charter to William Penn for the colony that became Pennsylvania.

On 4 March 1789 the (second) US Constitution went into effect when congress met in New York. It lasted until 1861.

On 4 March 1791 Vermont became the 14th state.

On 4 March 1861 the Confederate States of America adopted the "Stars & Bars" flag, which, most folks don't know, is NOT the famous Confederate battle flag with the St. Andrew's cross (X). The Stars & Bars had three horizontal stripes, red, white, and red, on the field and a blue canton with white stars circled. Actually, John Porcher Miles designed the Confederate battle flag with the famous St. Andrew's cross. Because the Stars & Bars could be confused with the US flag, the design was changed to the Stainless Banner with a white fly and St. Andrew's cross in the canton. Because that could be mistaken for a white flag, they added a vertical red bar to the outside of the field (the Blood Stained Banner).

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
4-Mar-14 Price Change % Change
Gold, $/oz 1,337.80 -12.30 -0.91%
Silver, $/oz 21.19 -0.26 -1.21%
Gold/Silver Ratio 63.140 0.192 0.30%
Silver/Gold Ratio 0.0158 -0.0000 -0.30%
Platinum 1,463.50 3.40 0.23%
Palladium 763.70 13.90 1.85%
S&P 500 1,873.91 28.18 1.53%
Dow 16,395.88 227.85 1.41%
Dow in GOLD $s 253.35 5.80 2.34%
Dow in GOLD oz 12.26 0.28 2.34%
Dow in SILVER oz 773.83 20.00 2.65%
US Dollar Index 80.17 0.07 0.09%
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: 1,339.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,377.21 1,386.59 1,386.59
1/2 AE 0.50 682.74 705.69 1,411.37
1/4 AE 0.25 341.37 359.54 1,438.17
1/10 AE 0.10 140.56 146.70 1,466.97
Aust. 100 corona 0.98 1,306.61 1,315.61 1,342.18
British sovereign 0.24 317.73 322.48 1,369.93
French 20 franc 0.19 252.00 254.97 1,365.68
Krugerrand 1.00 1,355.78 1,365.78 1,365.78
Maple Leaf 1.00 1,354.70 1,369.70 1,369.70
1/2 Maple Leaf 0.50 770.33 703.34 1,406.69
1/4 Maple Leaf 0.25 341.62 358.37 1,433.48
1/10 Maple Leaf 0.10 142.01 146.03 1,460.27
Mexican 50 peso 1.21 1,607.07 1,618.07 1,342.01
.9999 bar 1.00 1,344.39 1,358.70 1,358.70
SPOT SILVER: 21.24      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25.50 27.50 35.95
VG+ Peace dollar 0.77 22.50 24.50 32.03
90% silver coin bags 0.72 15,722.85 15,972.85 22.34
US 40% silver 1/2s 0.30 6,074.05 6,224.05 21.10
100 oz .999 bar 100.00 2,129.00 2,179.00 21.79
10 oz .999 bar 10.00 212.90 217.90 21.79
1 oz .999 round 1.00 21.34 21.84 21.84
Am Eagle, 200 oz Min 1.00 22.74 23.94 23.94
SPOT PLATINUM: 1,463.50      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,478.50 1,495.50 1,495.50
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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

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