The Moneychanger
Daily Commentary
Monday, 7 July a.d. 2014 Browse the commentary archive

My friend Herrick Kimball on The Deliberate Agrarian Blog published today a wondrous word picture of his mother-in-law entitled "Eulogy for Evelyn." It reminded me of my own wonderful mother-in-law who passed away in 2010. You can read Herrick's blog at www.thedeliberateagrarian.blogspot.com.

Nobody was much interested in markets today, probably still hung over from the weekend.

Stocks dropped after last Thursday's new highs. Dow lost 44.05 (0.26%) to 17,024.21. S&P500 edged back 7.79 (0.39%) to 1,977.65. Chance is large y'all will see a significant stock peak this month.

More interesting to me than the raw stock performance is stocks' performance against metals. Dow in silver has continued to rise, another 0.51% today to 810.14 oz (S$1,047.45 silver dollars) and has bounced off its 200 DMA and punctured its steep downtrend line. Nothing yet suggests anything more than an ordinary correction here.

Dow in gold was flat today at 12.93 oz (G$267.29 gold dollars). It has reached important resistance made stiffer by the confluence of the 20 DMA (13.00 oz/G$268.73) and 50 DMA (19.97 oz/G$268.11).

Currencies flat lined today except for the yen. US dollar index lost one measly basis point to end at 80.26, euro lost 0.02% to $1.3605. Yen rose 0.32% to 98.19, but did no more than creep above its intertwined 20 & 50 DMAs. Remains within that long even-sided triangle.

Gold today gave back $3.90 (0.3%) to close Comex at $1,316.50. Silver sliced off 12.3 cents (0.58%) to 2096.6c.

It appears silver & gold will correct this week. It might be mild, but might turn really scary -- bull markets have a habit of doing that, to "shake off as many riders as possible." Y'all, of course, are clever enough to recognize any correction as an opportunity to back up your truck & load up.

Mild correction takes silver to 2040c (200 DMA) and gold to $1,295, even 1,288 (200 DMA). Oddly enough, a 50% correction of the larger move, from June first's $1,240.20 to July first's $1,334.90 would also take gold to $1,287.55, right on the 200 DMA at $1,287.68. A tougher correction might take gold to $1,275, silver to 2000c or even 1950c.

Watch out! Closes above 2133.5c or $1,335 choke off any correction & add another upleg to the metals' rise.

On 7 July 1456 a retrial acquitted Joan of Arc of heresy. Unfortunately she had been dead 25 years at the 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
7-Jul-14 Price Change % Change
Gold, $/oz 1,316.50 -3.90 -0.30%
Silver, $/oz 20.97 -0.12 -0.58%
Gold/Silver Ratio 62.792 0.181 0.29%
Silver/Gold Ratio 0.0159 -0.0000 -0.29%
Platinum 1,494.90 -11.90 -0.79%
Palladium 869.24 6.95 0.81%
S&P 500 1,977.65 -7.79 -0.39%
Dow 17,024.21 -44.05 -0.26%
Dow in GOLD $s 267.32 0.10 0.04%
Dow in GOLD oz 12.93 0.00 0.04%
Dow in SILVER oz 811.99 2.65 0.33%
US Dollar Index 80.26 -0.01 -0.01%
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: 1,320.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,357.06 1,366.30 1,366.30
1/2 AE 0.50 672.74 696.35 1,392.71
1/4 AE 0.25 351.21 354.78 1,419.11
1/10 AE 0.10 139.82 145.21 1,452.11
Aust. 100 corona 0.98 1,283.61 1,292.61 1,318.72
British sovereign 0.24 312.62 324.62 1,379.00
French 20 franc 0.19 248.31 251.26 1,345.81
Krugerrand 1.00 1,331.98 1,341.98 1,341.98
Maple Leaf 1.00 1,335.10 1,350.10 1,350.10
1/2 Maple Leaf 0.50 759.06 693.05 1,386.11
1/4 Maple Leaf 0.25 336.63 353.13 1,412.51
1/10 Maple Leaf 0.10 139.93 143.89 1,438.91
Mexican 50 peso 1.21 1,581.96 1,592.96 1,321.19
.9999 bar 1.00 1,324.72 1,336.10 1,336.10
SPOT SILVER: 21.04      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25.00 26.50 34.64
VG+ Peace dollar 0.77 22.00 24.25 31.70
90% silver coin bags 0.72 15,326.03 15,576.03 21.78
US 40% silver 1/2s 0.30 6,013.58 6,163.58 20.89
100 oz .999 bar 100.00 2,093.50 2,153.50 21.54
10 oz .999 bar 10.00 215.35 216.35 21.64
1 oz .999 round 1.00 21.14 21.64 21.64
Am Eagle, 200 oz Min 1.00 22.79 24.04 24.04
SPOT PLATINUM: 1,494.90      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,519.90 1,559.90 1,559.90
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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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