The Moneychanger
Daily Commentary
Thursday, 24 April a.d. 2014 Browse the commentary archive

Okay, y'all listen up now. Most days nothing much happens. The world spins on about like it always has, and markets nudge a little one way or the other. Today was different, at least for silver & gold. But let me work through other markets first.

Here's a surprise: Dow Jones Industrial Average closed today unchanged at 16,501.65, something that only rarely occurs. Today's range was wider, top and bottom, than yesterday's, but the Dow gained nought. S&P500 rose 3.22 (0.17%) to 1,878.61. Although the S&P500 rose, it bumpeth only against its top trading channel line, and breaketh not out. Nasdaq Comp looketh none too perky, but did manage to close above its 20 day moving average.

Yea, but look, gaze steadily, stare at the Dow measured in metals. Dow in gold dropped 0.24% to 12.76 oz (G$263.77 gold dollars), not a great change from yesterday but baby step by baby step painting out a double top and probable reversal. Lo, the Dow in Silver sank 1.6% to 838.16 oz (S$1,083.68 silver dollars). Did the top for this move occur yesterday? Needs confirming, but the full stochastics turned down yesterday, along with the MACD.

Meanwhile, in the Cloud-Cuckoo Land of fiat national currencies, the US dollar index begins to look like a loser. Mark, it hath tried now thrice to pierce its 50 & 20 DMAs overhead, and hath failed each time. Looks like a SELL, but then, it's looked that way since 1934. Dollar index lost 8 basis points (0.1%) to 79.87. Euro gained 0.8% to $1.3828, and although above its 20 DMA, remains in a downtrend, like a mountebank in a moth-eaten tuxedo. Japanese Yen (is there some other yen?) gained 0.23% to 97.77 cents per 100 yen, but still looks ugly as five miles of bad gravel road.

The action today was in silver & gold. Gold gained $6.30 to $1,290.50 while silver added 25.2 cents to 1968.2c.

These numbers tell no tale without their ranges. Silver today a little before 8:30 a.m. New York time spiked to a low at 1896.8c, fulfilling that 1900c target. It tarried but an hour, then shot clean up to 1980c by 11:30, and remained the rest of the day above 1960c. Not only does this fulfill my awaited target, yea, it also makes the first half of a key reversal (break to new low with a higher close for the day). All that is needed now is a close tomorrow higher than today's.

Gold followed the same pattern, with an early low at $1,268.90. That's a new low for this move, and close enough to the $1,270 target to fit. Add to that a higher close for the day, a rebound of $22.50, & you'll begin to savor the strength.

Tomorrow both metals need to close higher to confirm those key reversals, but I reckon they will.

That's it, waiting's over. That should be the bottom of the correction that began after the February high.

Stop waiting. Buy now. Only thing that might gainsay that would be sharply lower prices in the morning, below today's lows. Otherwise, it's a buy.

After 12 years of official military occupation, the last yankee troops left the South and New Orleans on 24 April 1877.

On 24 April 1915 began the mass deportations of Armenians by the Ottoman Turkish government. Eventually 1 to 1.5 million would die.

On 24 April 1916 the Irish Easter Rebellion against English rule began. It was quickly crushed and the ringleaders just as quickly executed, but in five years' time Ireland was independent after roughly 400 years' occupation.

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
24-Apr-14 Price Change % Change
Gold, $/oz 1,290.50 6.30 0.49%
Silver, $/oz 19.68 0.25 1.30%
Gold/Silver Ratio 65.568 -0.526 -0.80%
Silver/Gold Ratio 0.0153 0.0001 0.80%
Platinum 1,408.10 4.90 0.35%
Palladium 802.55 16.30 2.07%
S&P 500 1,878.61 3.22 0.17%
Dow 16,501.65 0.00 0.00%
Dow in GOLD $s 264.33 -1.30 -0.49%
Dow in GOLD oz 12.79 -0.06 -0.49%
Dow in SILVER oz 838.41 -10.87 -1.28%
US Dollar Index 79.87 -0.08 -0.10%
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: 1,291.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,325.96 1,336.29 1,336.29
1/2 AE 0.50 657.95 680.09 1,360.17
1/4 AE 0.25 328.98 346.50 1,386.00
1/10 AE 0.10 135.46 141.38 1,413.75
Aust. 100 corona 0.98 1,259.21 1,268.21 1,293.83
British sovereign 0.24 306.20 310.95 1,320.96
French 20 franc 0.19 242.86 245.90 1,317.08
Krugerrand 1.00 1,306.59 1,316.59 1,316.59
Maple Leaf 1.00 1,306.10 1,321.10 1,321.10
1/2 Maple Leaf 0.50 742.38 677.83 1,355.66
1/4 Maple Leaf 0.25 329.23 345.37 1,381.48
1/10 Maple Leaf 0.10 136.86 140.73 1,407.30
Mexican 50 peso 1.21 1,548.77 1,559.77 1,293.66
.9999 bar 1.00 1,295.62 1,310.10 1,310.10
SPOT SILVER: 19.66      
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 14,986.40 15,236.40 21.31
US 40% silver 1/2s 0.30 5,607.95 5,757.95 19.52
100 oz .999 bar 100.00 1,971.00 2,021.00 20.21
10 oz .999 bar 10.00 197.10 202.10 20.21
1 oz .999 round 1.00 19.76 20.26 20.26
Am Eagle, 200 oz Min 1.00 21.16 22.36 22.36
SPOT PLATINUM: 1,408.10      
Plat. Platypus 1.00 1,423.10 1,440.10 1,440.10
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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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