The Moneychanger
Daily Commentary
Monday, 14 April a.d. 2014 Browse the commentary archive

There are some people who mean what they say, & others don't mean nothing. If some folks I know tell you they're gonna hit you in the mouth with a ball peen hammer, you might as well go ahead & make an appointment with the oral surgeon. They mean it. Others talk big but do little, like Mario Draghi, currently Head Criminal at the European Criminal -- whoops, Central -- Bank. He huffs and puffs and blows & generally jawbones about what they might do, but he just don't know how to pull a trigger. And why should he, or the Bank of Japan? All they have to do is jawbone & markets react.

Them boys wouldn't make it in Tennessee.

Mercy, those Nice Government Men in the Plunge Protection Team must've spent a worried weekend, sweating bullets & trying to work out how they would float the stock market again today. Wasn't particularly impressive. Dow gained 146.49 today (0.91%) to 16,173.24. S&P trailed along at 0.82% (14.92) with a 1,830.61 close.

Both indices look mighty green around the gill, the S&P500 worse than the Dow, and don't even talk about the Nasdaq Composite. Here are some milestones to watch for. S&P500 about 1,800 breaks down out of its uptrend channel. Dow's 200 DMA awaits at 15,752.41. Nasdaq-composite's 200 DMA is at 3,939.36, and today it closed at 4,022.69. Dow's March low came at 16,047 but Friday its low was 16,015. S&P500's March low touched 1834.44 & Friday it hit 1,814.36. Lower prices coming.

Dow in Gold has now fallen into its 200 DMA (12.16 oz), but today rose 0.22% to 12.18 oz (G$251.78 gold dollars). March low was 11.62 oz (G$240.21). Dow in silver has not fallen as far. Gained 0,66% today to close at 808.26 oz (S$1,045.02 silver dollars). It is headed lower like the DiG, but not as fast.

Pressure is rising on the ECB to do something as the euro rises against the US dollar, squeezing European importers. That's why HC Mario Draghi jawboned that the ECB should print more money. On that hint alone the Euro lost 0.41% to $1.3821. It had been nigh to an upside breakout, but the mouthing sent it gapping down. Yen, too, is faltering at the top boundary of its downsloping channel. Remains above its 20 & 50 DMAs. US dollar index climbed 26 basis points (0.33%) to 79.83. What a dog. But it might have found a bottom for this move down. I don't want to own it, even if the US does have an army to invade you and an air force to bomb you if you question the supremacy of the buck.

Gold jumped up as much as $12.70 over Friday's close, but backed off to close Comex at $1,327.20, up only $8.50. A big jump came on Sunday our time, about $10. In European trading gold traded $1,325 - $1,330, but about 7:00 a.m. Eastern time somebody started selling & by noon had driven gold down to $1,331. It double bottomed there about 1:00 p.m,. and shot straight up to $1,330. In the aftermarket it's trading at $1,326.70.

Silver gained 6.6 cents to end Comex at a tape-painting 1999.9c. Sure. It traded the whole weekend over 2000c the about 7:00 a.m. Eastern time the mystery seller began going his work, pouring on enough sales to gap silver down twice. Silver refused to budge at 1972c, then began a relentless climb, leaving behind a V bottom.

Gold has posted a steady, relentless rise & now stands above its 200, 50, and 20 day moving averages, with indicators pointing up. Meanwhile silver remains barely below its 20 DMA (2001c) and can't push through 2015c. Assuming we are watching a precious metals rally, silver should pop straight up soon.,

This is Holy Week and I won't be publishing after tomorrow, or on Easter Monday.

On 14 April 1865 John Wilkes Booth allegedly shot Abraham Lincoln. What followed was the first practiced government cover-up. Booth was cornered in a barn, but instead of coaxing him out, they burned up the barn with him in it. Witness No. 1 gone. Then they arrested a group of "conspirators" and tried them in a blazing hurry before a military tribunal that quickly hanged them all. Exit dangling, rest of witnesses. There were many who suspected at the time that a dead Lincoln was worth more to the Republicans than a live one. It was certainly no secret that even his Cabinet members and many Republicans hated him, but with all the witnesses barbecued or wearing hemp neckties, who could point a finger?

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
14-Apr-14 Price Change % Change
Gold, $/oz 1,327.20 8.50 0.64%
Silver, $/oz 20.00 0.07 0.33%
Gold/Silver Ratio 66.363 0.207 0.31%
Silver/Gold Ratio 0.0151 -0.0000 -0.31%
Platinum 1,466.80 5.20 0.36%
Palladium 811.75 4.70 0.58%
S&P 500 1,830.61 14.92 0.82%
Dow 16,173.24 146.49 0.91%
Dow in GOLD $s 251.91 0.67 0.27%
Dow in GOLD oz 12.19 0.03 0.27%
Dow in SILVER oz 808.70 4.67 0.58%
US Dollar Index 79.83 0.26 0.33%
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: 1,326.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,361.19 1,373.13 1,373.13
1/2 AE 0.50 676.11 698.84 1,397.68
1/4 AE 0.25 338.05 356.05 1,424.21
1/10 AE 0.10 139.20 145.27 1,452.74
Aust. 100 corona 0.98 1,293.93 1,302.93 1,329.25
British sovereign 0.24 314.65 319.40 1,356.83
French 20 franc 0.19 249.55 252.54 1,352.68
Krugerrand 1.00 1,343.95 1,353.95 1,353.95
Maple Leaf 1.00 1,341.70 1,356.70 1,356.70
1/2 Maple Leaf 0.50 762.85 696.52 1,393.04
1/4 Maple Leaf 0.25 338.31 354.89 1,419.57
1/10 Maple Leaf 0.10 140.63 144.61 1,446.10
Mexican 50 peso 1.21 1,591.47 1,602.47 1,329.08
.9999 bar 1.00 1,331.34 1,345.70 1,345.70
SPOT SILVER: 19.95      
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 15,086.50 15,336.50 21.45
US 40% silver 1/2s 0.30 5,693.50 5,843.50 19.81
100 oz .999 bar 100.00 2,000.00 2,050.00 20.50
10 oz .999 bar 10.00 200.00 205.00 20.50
1 oz .999 round 1.00 20.05 20.55 20.55
Am Eagle, 200 oz Min 1.00 21.45 22.65 22.65
SPOT PLATINUM: 1,466.80      
Plat. Platypus 1.00 1,481.80 1,498.80 1,498.80
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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.
  • 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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