The Moneychanger
Daily Commentary
Thursday, 10 April a.d. 2014 Browse the commentary archive

Proving once again there the world holds even BIGGER fools than a nacheral born durned fool from Tennessee, the Greek government's bond auction today raised about $4 billion, $500 more than the original target, & bids for $23.6 billion were received. I reckon they sold it at the 5.3% they wanted to pay, but didn't see that reported. Buying these bonds nearly equals, but is not nearly as good as, loaning a clubhouse full of drunks money to buy cases of whiskey.

Blood flowed on Wall Street today, spurting in bright red arterial bursts. Russell 2000 plunged 2.78%, Nasdaq tumbled 3.1%, Nasdaq-100 sank 3.13%, Dow dropped 1.62% and S&P500 lost 2.1%.

Dow closed at 16,170.22, 266.96 points lighter than yesterday & turning decisively down. Not up, down. S&P500 lost 39.1, a massive 2.1%. This is moving past puking in the wastebasket & on to contemplating diving out a window.

Dow closed a gnat's whisker above the 50 DMA (16,168.79) and not far from the long term uptrend line it threw over in November. S&P500 closed below its 50 DMA (1,843.34). This could easily reach 1,800.

Dow measured in precious metals today resumed its downward plunge. Closing at 12.25 oz (G$253.23 gold dollars), the Dow in Gold capsized beneath its 20 & 50 DMAs (12.43 & 12.32 oz), locking in its downtrend. Ending at 804.85 oz (S$1,040.21 silver dollars), the Dow in Silver tripped its 20 DMA (811.21 oz). Both have signaled SELL in their MACDs.

The US dollar index has gushed over the cliff with a five (5) day cascade. Closed today down another 0.14% to 79.47. A close below 79 sends it much lower. Dollar's weakness most likely comes from the market's apprehension interest rates will stay low. Euro has shot back nearly to its last peak ($1.3958), and today closed up another 0.25% at $1.3888. Shows you don't have to be healthy at all to be rented if you're the only horse in the livery stable able to stand. Yen continues to gain, up another 0.45% today to 98.52 c/Y100, but needs to gain a tadge more to break out upside.

GOLD gained $14.6 or 1.1% today to close Comex at $1,320.10. Silver jumped 1.6% or 32.3 cents to 2007.8 cents. Ratio dropped to 65.749

Gold is behaving as it should, climbing today thru the next resistance level, about $1,318. Silver, frankly, stank. It rose to 2040c (above the magic 2015c) & poked its head through the downtrend line, then fell back to close below the 20 DMA (2015c). What giveth? MACD just shouted "BUY!" for both today.

The African's say, when elephants fight small critters must get out of the way (that's my loose translation). A stock market rout can quickly envelope every other market in doom. So far, so good. The dollar tanking really complicates things and should be good for gold and silver, unless it gets to 79 & turns around. Nor lieth beyond imagination the possibility that a stock market rout transmogrifies into the horror panic of 2008. Also on the table is another possibility, namely, that stocks undergo a sharp correction, then pull a Freddy Kruger and rise from the dead to make one further high in May, or even later. (You uncultured folks will not recognize that sophisticated literary illusion to the star of the movie series, "Texas Chainsaw Massacre." He would not die.)

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
9-Apr-14 Price Change % Change
Gold, $/oz 1,305.50 -3.20 -0.24%
Silver, $/oz 19.76 -0.29 -1.43%
Gold/Silver Ratio 66.085 0.787 1.20%
Silver/Gold Ratio 0.0151 -0.0002 -1.19%
Platinum 1,437.00 21.40 1.51%
Palladium 782.80 9.75 1.26%
S&P 500 1,872.18 20.22 1.09%
Dow 16,437.18 181.04 1.11%
Dow in GOLD $s 260.27 3.50 1.36%
Dow in GOLD oz 12.59 0.17 1.36%
Dow in SILVER oz 832.05 20.95 2.58%
US Dollar Index 79.58 -0.25 -0.31%
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: 1,314.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,349.58 1,360.09 1,360.09
1/2 AE 0.50 669.68 692.20 1,384.40
1/4 AE 0.25 334.84 352.67 1,410.69
1/10 AE 0.10 137.88 143.89 1,438.94
Aust. 100 corona 0.98 1,281.64 1,290.64 1,316.71
British sovereign 0.24 311.66 316.41 1,344.13
French 20 franc 0.19 247.18 250.19 1,340.08
Krugerrand 1.00 1,331.18 1,341.18 1,341.18
Maple Leaf 1.00 1,329.10 1,344.10 1,344.10
1/2 Maple Leaf 0.50 755.61 689.90 1,379.81
1/4 Maple Leaf 0.25 335.10 351.52 1,406.09
1/10 Maple Leaf 0.10 139.29 143.24 1,432.37
Mexican 50 peso 1.21 1,576.36 1,587.36 1,316.54
.9999 bar 1.00 1,318.70 1,333.10 1,333.10
SPOT SILVER: 19.91      
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 15,057.90 15,307.90 21.41
US 40% silver 1/2s 0.30 5,681.70 5,831.70 19.77
100 oz .999 bar 100.00 1,996.00 2,046.00 20.46
10 oz .999 bar 10.00 199.60 204.60 20.46
1 oz .999 round 1.00 20.01 20.51 20.51
Am Eagle, 200 oz Min 1.00 21.41 22.61 22.61
SPOT PLATINUM: 1,437.00      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,452.00 1,469.00 1,469.00
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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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