The Moneychanger
Weekly Commentary
Friday, 6 June a.d. 2014 Browse the commentary archive
Here's the weekly scorecard:
  30-May-14 6-Jun-14 Change % Change
Silver, cents/oz. 1,865.30 1,896.30 31.00 1.7
Gold, dollars/oz. 1,245.60 1,252.10 6.50 0.5
Gold/silver ratio 66.777 66.029 -0.749 -1.1
Silver/gold ratio 0.0150 0.0151 0.0002 1.1
Dow in Gold Dollars (DIG$) 277.44 279.42 1.98 0.7
Dow in gold ounces 13.42 13.52 0.10 0.7
Dow in Silver ounces 896.22 892.49 -3.73 -0.4
Dow Industrials 16,717.17 16,924.28 207.11 1.2
S&P500 1,923.57 1,949.44 25.87 1.3
US dollar index 80.43 80.43 0.00 0.0
Platinum 1,454.70 1,455.00 0.30 0.0
Palladium 835.65 843.95 8.30 1.0

If I told y'all that silver rose more than the Dow or the S&P500 last week, y'all would tell me I was lying and throw a pop bottle at my head, but just you look. Silver rose 1.7% this week but the Dow only rose a piddling 1.2% and the S&P500 rose 1.3%. Those are just the numbers. Gold rose 1/2% while the US dollar index stayed plumb pancake flat, didn't move ne'er a hair. Platinum rose only 30 cents.

I reckon it makes a difference who writes the headlines. Which reminds me, who gets to pick the news? Did y'all notice that whatever some lamebrain in New York or Washington says is news is what they spotlight? Obama Administration is good at this, floating a new crisis every week as "news" when actually it's either "olds" or just their agenda.

But the news from the yankee government was good today for Wall Street, the unemployment is steady and jobs have grown by over 200,000 a month for the last three months. Now if you all have never heard SHAMELESS LYING before you heard it from this lying report. I'm just a nacheral born fool from Tennessee, but I know to go to the St. Louis Fed's database Fred and look up Civilian Labor Force Participation and see that it's now at 62.9%, against a high in July 1997 (right, 17 years ago) of 68.1%. 62.9 is itself a level not seen since May 1978.

Then I went & read what John Williams of www.shadowstats.com had to say. John is an expert in unravelling their statistical lies, and he says unemployment is closer to 23% and the gimmicks the Bureau of Labor Statistics uses overstate job growth by 200,000 a month.

But welcome to America, where the truth don't count, only the illusion of an economy. Stocks rose again to new highs, the eighth out of the last 10 days for the S&P500. It rose 8.98 (0.46%) to 1,949.44. Dow rose 88.17 90.52%) to 16,924.28. Both have now poked through overhead resistance lines. They could break down here -- new highs on 8/10 days is not a sequence nature encourages -- or they could go wilder still, although both have reached overbought territory. But overbought can get overboughter still. The end lieth not far away.

About now it's getting time to sell stocks & put the proceeds into silver & gold. The Dow in Gold today rose 0.59% to end at 13.51 oz (G$279.28 gold dollars), a new high for the move since March, but not nearly the high for the move, which remains 13.80 oz (G$285.27) last December. It's likely forming a double top here, but that has to be confirmed by a reversal.

Dow in Silver gained 0.66% to end at 890.75 oz (S$1,151.35). It has bounced off its upper resistance line this week, but needs to drop through the 20 DMA (866.37 oz) to confirm a reversal. I don't expect it can get higher than 912 oz (S$1,179.15), and may have already turned.

Wasn't a shining week for the US dollar index. Yesterday's announcement from the criminals at the ECB sent the dollar up first to 81.07, then it collapsed all the way to 80.39 Today it ended where it began the week, at 80.43, just above the 20 DMA at 80.31, but below the 200 DMA at 80.48. Has the dollar aborted its uptrend? I don't know, but watch 80.20, even 80.05, the 50 DMA. It ought to hold those if it aims to rise.

Euro collapsed from 1.3993 in early may all the way to $1.3503 when it bounced back yesterday. Today it lost 0.13% to $1.3645. The enthusiasm spawned by the ECB's announcement it would inflate the snot out of the euro will wear off in two weeks at most, and it will commence sinking again.

The yen continues to slide sideways, losing 0.11% today to 97.55, below all its moving averages. Yet the yen abideth still in the same range it hath inhabited since 2014 began, from 94.83 to 99.24. Nothing happening here.

The 10 year treasury yield in the last week has been working to undo its breakdown in early May. Remember that suppressing interest rates is the key to the central banks' house of cards. Once the market takes control and starts raising rates, the central banks are cooked. Watch thos einterest rates for the first sign of trouble.

Gold lost a nothing 90 cents today to close at $1,252.10, but it's above $1,250. Way up above at $1,275 stands the 20 day moving average, first milestone that will prove gold has turned its face skyward. Really gold needs to rise above $1,280 where it broke down. $1,295 and the 200 dma would be better still.

The RSI shows gold rising up from a severely oversold condition. Full stochastics have been as oversold as they've been in the last 12 years. MACD is trying to turn up. But all this must be confirmed by the only indicator that counts: higher price.

Silver dropped 9.2 cents to 1896.3c, but traded most of the say above 1900c. As with gold, price is the only indicator that counts in the end. For silver, that means climbing above 1950c, then over 2050c.

Both silver & gold seasonally post lows in June-July, so we might see one spike move down. Everything is in place, however, for a reversal -- they just haven't reversed yet.

On 6 June 1816 New England experienced a 10 inch snowfall in the "year without a summer." A series of volcanic eruption was capped by the 1815 eruption of Mt. Tambora in Indonesia, spewing tons of matter in the air that caused cooling in the northern hemisphere.

On 6 June 1934 US President Franklin Roosevelt signed the Securities Exchange Act establishing the Securities & Exchange Commission so that wholesale fraud upon the American public could be supervised by government authorities.

Next week I will be travelling so won't publish commentaries any day but Monday, unless I just have time and take a notion.

Y'all enjoy your weekend!

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
6-Jun-14 Price Change % Change
Gold, $/oz 1,252.10 -0.90 -0.1
Silver, $/oz 18.96 -0.09 -0.5
Gold/Silver Ratio 66.029 -0.044 -0.1
Silver/Gold Ratio 0.0151 -0.0001 -0.5
Platinum 1,455.00 7.90 0.5
Palladium 843.95 5.10 0.6
S&P 500 1,949.44 8.98 0.5
Dow 16,924.28 88.17 0.5
Dow in GOLD $s 279.41 1.68 0.6
Dow in GOLD oz 13.52 0.08 0.6
Dow in SILVER oz 892.49 8.94 1.0
US Dollar Index 80.43 0.05 0.1
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: 1,252.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,287.26 1,296.03 1,296.03
1/2 AE 0.50 638.11 659.60 1,319.19
1/4 AE 0.25 319.06 336.06 1,344.24
1/10 AE 0.10 131.38 137.12 1,371.16
Aust. 100 corona 0.98 1,221.27 1,230.27 1,255.12
British sovereign 0.24 296.98 301.73 1,281.77
French 20 franc 0.19 235.54 238.64 1,278.18
Krugerrand 1.00 1,265.97 1,275.97 1,275.97
Maple Leaf 1.00 1,267.20 1,282.20 1,282.20
1/2 Maple Leaf 0.50 720.02 657.41 1,314.81
1/4 Maple Leaf 0.25 319.31 334.96 1,339.85
1/10 Maple Leaf 0.10 132.73 136.49 1,364.90
Mexican 50 peso 1.21 1,502.10 1,513.10 1,254.96
.9999 bar 1.00 1,256.58 1,271.20 1,271.20
SPOT SILVER: 18.98      
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 14,500.20 14,750.20 20.63
US 40% silver 1/2s 0.30 5,407.35 5,557.35 18.84
100 oz .999 bar 100.00 1,903.00 1,953.00 19.53
10 oz .999 bar 10.00 190.30 195.30 19.53
1 oz .999 round 1.00 19.08 19.58 19.58
Am Eagle, 200 oz Min 1.00 20.83 21.23 21.23
SPOT PLATINUM: 1,455.00      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 1,470.00 1,487.00 1,487.00
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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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