The Moneychanger
Daily Commentary
Monday, 19 May a.d. 2014 Browse the commentary archive

Man, I am excited. I was watching some red paint dry this morning, & that got my blood up. Then I watched some blue paint dry, & that was terrific. But then I looked at markets today, & had to shout, "Be still, my beating heart!"

On a 104 point range (0.6% of the closing price) the Dow meandered to a close 18.85 (0.11%) higher than Friday's, at 16,510.16. S&P500 milled around and closed 7.08 (0.38%) higher at 1,884.94. That leaves the S&P500 above its 20 DMA (1,879.73) but the Dow below its 20 DMA (16,528.76). Both hit their 50 DMA's last week and rebounded higher. Both are stalled and drifting without much direction. That doesn't say that they can't go higher, just that they show no intention of that right now. Dow in Gold and Dow in Silver haven't stirred enough to talk about.

US dollar index is trying to rough up its newly made friends. Dropped another 4 basis points today to close at 80.07. Apparently wants to see if it can invalidate its recent upward reversal. Euro languisheth still, but rose today 0.12% to $1.3709. Still broken. Yen is slowly, o so slowly making good on its breakout. Higher by 0.06% today to 98.58, & reaching toward its 200 DMA at 99.09.

Gold on Friday lost twenty cents. Today it rose 40 cents to end at $1,293.70. That came after, however, a bully opening to the day & climb to 1,305.70 about 9:45. Rest of the day gold just kept on backing up.

Silver rose three whole cents today to 1932.2c. Silver, too, began the day with promise of better things and a rise to 1968, but it faded like gold. These are simply dead markets, low volume, low ranges.

But silver remains in an uptrend since 1 May -- higher lows & higher highs, remember. Gold remains in an uptrend since 24 April, except that the last high was not higher so it has formed a long-nosed even-sided triangle. It's bumping up against that upper boundary line, but can't close above its 200 dma ($1,399.38).

Can't say nothing about nothing. Markets remain pretty much where they were on Friday, waiting for something to change.

On 19 May 1964 US diplomats found at least 40 microphones planted in the US embassy in Moscow. Thank heaven, none of them had germinated yet!

On 1989 the Dow Jones Industrial average passed 2,500 for the first time to close at 2,501.1. ON 19 May 1993 it closed above 3,500 for the first time.

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
19-May-14 Price Change % Change
Gold, $/oz 1,293.30 0.40 0.03%
Silver, $/oz 19.32 0.03 0.16%
Gold/Silver Ratio 66.934 -0.083 -0.12%
Silver/Gold Ratio 0.0149 0.0000 0.12%
Platinum 1,469.40 4.10 0.28%
Palladium 815.40 0.60 0.07%
S&P 500 1,884.94 7.08 0.38%
Dow 16,510.16 18.85 0.11%
Dow in GOLD $s 263.89 0.22 0.08%
Dow in GOLD oz 12.77 0.01 0.08%
Dow in SILVER oz 854.47 -0.35 -0.04%
US Dollar Index 80.07 -0.04 -0.05%
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: 1,293.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,328.84 1,339.19 1,339.19
1/2 AE 0.50 659.38 681.56 1,363.12
1/4 AE 0.25 329.69 347.25 1,389.00
1/10 AE 0.10 135.75 141.68 1,416.82
Aust. 100 corona 0.98 1,261.94 1,270.94 1,296.61
British sovereign 0.24 306.87 311.62 1,323.78
French 20 franc 0.19 243.38 246.42 1,319.88
Krugerrand 1.00 1,308.13 1,318.13 1,318.13
Maple Leaf 1.00 1,308.90 1,323.90 1,323.90
1/2 Maple Leaf 0.50 743.99 679.30 1,358.60
1/4 Maple Leaf 0.25 329.94 346.12 1,384.47
1/10 Maple Leaf 0.10 137.15 141.04 1,410.35
Mexican 50 peso 1.21 1,552.13 1,563.13 1,296.45
.9999 bar 1.00 1,298.43 1,312.90 1,312.90
SPOT SILVER: 19.33      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26.50 28.50 37.25
VG+ Peace dollar 0.77 22.50 23.75 31.05
90% silver coin bags 0.72 14,818.38 15,068.38 21.07
US 40% silver 1/2s 0.30 5,509.13 5,659.13 19.18
100 oz .999 bar 100.00 1,937.50 1,987.50 19.88
10 oz .999 bar 10.00 193.75 198.75 19.88
1 oz .999 round 1.00 19.43 19.93 19.93
Am Eagle, 200 oz Min 1.00 21.18 21.58 21.58
SPOT PLATINUM: 1,469.40      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,484.40 1,501.40 1,501.40
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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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