The Moneychanger
Daily Commentary
Thursday, 3 April a.d. 2014 Browse the commentary archive

I often cock my head in bewildered wonder at the factors & events that drive markets nowadays. Tomorrow a yankee government employment report will be issued in which they will lie shamelessly about the jobless numbers. Nobody sane believes these numbers, & the government will revise them in six weeks or so to prove they were lying in the first place. NOTWITHSTANDING those trumped up job numbers will drive markets tomorrow, as if they actually meant something, or as if the plans of a well-run, efficient business could be cast into disarray by one lying government report.

It's getting so I believe everybody but y'all and me are nuts, and I ain't too sure about y'all.

Didn't anything startling happen in markets today. Stocks backed off, holding their breath for that precious priceless prevarication due tomorrow. Dollar rose because the ECB mumbled some oracle, & silver & gold cringed because the scrofulous dollar rose (probably).

Dow closed 16,572.55, down a miniature 0.45. S&P500 lost 2.15 (0.11%) to 1,888.77. Both broke out yesterday upside, MACD for both gave a buy signal, but if you look at that declining volume over the last year while all these new all-time highs have been made, you might have to scratch your head and wonder if stocks ain't running out of gas.

The little jiggle the Dow in Gold & Dow in Silver jiggled today from stocks flattening and silver & gold dropping, frankly, just ain't worth talking about. Nothing changed.

The criminals running the European Central Bank today pledged to use "unconventional measures" to -- get this, write it down, mark this -- battle "low inflation." O, shucks! We're not picking the public's pockets fast enough, so let's crank that inflation up to melt their savings and capital, and help the banks. ECB implied it would print new waves of money, but kept interest rates near zero.

On that news the US dollar index (killers of hope, gobbler of savings) rose a less than spectacular 23 basis points or 0.3%. I will concede that takes it above the 05 DMA 80.31 and points it toward the 200 DMA at 80.99, and throws a leg over 80.50 lateral resistance, so the dollar should rise more.

The scabby euro, on the other hand, sank away from resistance, confirmed its down trend with another lower high and lower low, and broke below its 50 DMA ($1.3734). Closed down 0.35% at $1.3719. Tugging at the reins like it wants to drop to $1.3500. And the Japanese yen --Is there any reason to talk about that? Dropped 0.04% to 96.24 cents/Y100, still a-fainting.

Gold eased off $6.10 (0.5%) today to close Comex at $1,284.40. Silver backed up 24.5 cents (1.22%) to 1978.6c.

About the time of that European announcement, I reckon, about 10:a.m. anyway, silver broke down and hit the day's low at 1966c. That was a V-bottom -- somebody was waiting to buy down there. Bounced right back above 1975-1980c, but went no further. Erased Wednesday's gains & left us where we began.

Not quite so with gold. Gold's action today left a slightly higher low ($1,281.90) than Tuesday's ($1,277.40). Doesn't sound like much, but catches your eye on a five day chart.

Line is plainly drawn: gold must clear $1,295. A drop below $1,277 would gainsay my interpretation that gold has either (1) seen its low for this move or (2) seen at least an interim low.

We'll know tomorrow what happens, unless that lying government report skews everything.

On 3 April 1948 President Harry Truman signed the Marshall Plan. Billed as economic support to help rebuild war-ravaged European economies and stop the spread of communism, it was of course a subsidy to American industry. The US "donated" $15 billion (about 6% of GDP) on top of $15 million already "donated," but most of the money had to be spent in the US. European nations like Germany used it to re-tool & build more up-to-date plant than the US had. Whether it was planned or accident, the result of the subsidy was to strengthen competition to US producers. Brilliant idea, the American government subsidizing foreign competition. Don't even get me started talking about the Bretton Woods Agreement, which set US industry behind the monetary eight-ball against foreigners.

With friends like we have in the yankee government, you wonder why we need enemies.

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
3-Apr-14 Price Change % Change
Gold, $/oz 1,284.40 -6.10 -0.47%
Silver, $/oz 19.79 -0.25 -1.22%
Gold/Silver Ratio 64.915 0.489 0.76%
Silver/Gold Ratio 0.0154 -0.0001 -0.75%
Platinum 1,443.80 6.70 0.47%
Palladium 789.10 0.50 0.06%
S&P 500 1,888.77 -2.14 -0.11%
Dow 16,572.55 -0.45 -0.00%
Dow in GOLD $s 266.73 1.25 0.47%
Dow in GOLD oz 12.90 0.06 0.47%
Dow in SILVER oz 837.59 10.22 1.24%
US Dollar Index 80.20 0.23 0.29%
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: 1,286.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,322.32 1,331.32 1,331.32
1/2 AE 0.50 655.50 677.56 1,355.12
1/4 AE 0.25 327.75 345.21 1,380.84
1/10 AE 0.10 134.96 140.85 1,408.50
Aust. 100 corona 0.98 1,254.53 1,263.53 1,289.05
British sovereign 0.24 305.07 309.82 1,316.13
French 20 franc 0.19 241.95 245.00 1,312.28
Krugerrand 1.00 1,304.31 1,314.31 1,314.31
Maple Leaf 1.00 1,301.30 1,316.30 1,316.30
1/2 Maple Leaf 0.50 739.62 675.31 1,350.62
1/4 Maple Leaf 0.25 328.01 344.09 1,376.34
1/10 Maple Leaf 0.10 136.35 140.21 1,402.07
Mexican 50 peso 1.21 1,543.01 1,554.01 1,288.89
.9999 bar 1.00 1,290.80 1,305.30 1,305.30
SPOT SILVER: 19.79      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26.25 28.25 36.93
VG+ Peace dollar 0.77 22.25 23.75 31.05
90% silver coin bags 0.72 14,972.10 15,222.10 21.29
US 40% silver 1/2s 0.30 5,646.30 5,796.30 19.65
100 oz .999 bar 100.00 1,984.00 2,034.00 20.34
10 oz .999 bar 10.00 198.40 203.40 20.34
1 oz .999 round 1.00 19.89 20.39 20.39
Am Eagle, 200 oz Min 1.00 21.29 22.49 22.49
SPOT PLATINUM: 1,443.80      
Plat. Platypus 1.00 1,458.80 1,475.80 1,475.80
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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.
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  • 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.
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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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