The Moneychanger
Daily Commentary
Thursday, 7 August a.d. 2014 Browse the commentary archive

Apparently lots of folks have trouble reading English, so I will cast subtlety to the winds & tell y'all WE MAKE OUR LIVING BUYING & SELLING SILVER & GOLD BULLION & COINS. It's true, but for some reason people think we are a free information service. Not so -- at least, I hope not.

I'm already in hot water because Susan has been all day preparing the Shoe (our house) for a birthday party for my daughter Mercy tonight. You have never seen anybody serious until you watch my wife planning & preparing a party -- one of the reasons I love her, among many, but I cannot be late so this must be short.

Yesterday I meant to tell y'all that the 10 year not yield fell hugely, but recovered on the close to close at the top of the range. Today it fell 2.02% to end at 2.424%. That all looks very odd to me, making that huge fall but then closing at the day's high. Anyway, it appears to be a breakdown in interest rates (breakout upside in bonds, as they move opposite to their interest rates.

Stocks kept on falling today. Dow lost 75.07 (0.46%) to end the day at 16,368.27 -- 1.14% DOWN from where it began the year. S&P500 fell 10.67 (0.56%) to 1909.57.

Today the Dow punched into, but closed not below, its 200 DMA (16,343.38). It hath yet further to fall, as the meteor from the sky, the apple from the tree, and the job openings on Wall Street.

S&P500 closed below its one hundred day moving average (1,913.72). Lower prices coming.

Land o' Goshen! As my country aunts used to say, that Dow in Gold fell nearly to the uptrend line from August 2011! Today that line stands about 12.40 (G$256.33) and the DiG closed down 1.03% at 12.45 oz (G$257.36). (I have no idea why they said that or even what they meant, other than extreme surprise & astonishment.)

Dow in silver skidded 0.16%, right along the falling fanline. Ended at 819.03 oz (S$1,058.95 silver dollars). 200 DMA awaits below at 808.15 oz.

US dollar index rose 9 basis points to 81.59, telling us nothing but the dollar's reluctance to fall. Euro lost 0.16%, while the yen, stretching its muscles, rose 0.03%. Nothing happening in scrofulous currencies.

Gold added $4.10 to $1,310.80 today while silver lost 3.4 cents to 1995.1c.

By the tee-tiniest of margins Gold in the aftermarket closed above that downtrend line from October 2012. The Comex close at $1,310.80 wouldn't have been enough. Can't count that as a breakout, but it does command a little respect. Not much, just a little. Thoughts are beginning to circle in my mind like buzzards over roadkill that gold completed a Right shoulder of an upside-down head and shoulders with that drop to $1,281 last week. Thoughts haven't landed yet, but they are circling.

I am never quite easy when silver & gold are rising and silver gainsays gold by falling when gold rises. I am further miffed that silver will not close above 2000c resistance. This is bad taste and bad form, although I will grant the possibility that last week's lows about 1975c market the extent of the correction. That is a sucker bet, however, because silver has not given yet a firm witness of turning around. A close above 2060c would do that without reservation or hesitation.

If nothing more that Ukraine-anxiety is driving this rally-ette, 'twill fail soon and give us further downside. But I am a hypocrite. I bought a fairly stout (for me) amount of both silver & gold today.

I have to run but I have some good news. Today I went to see my friend Daniel in the hospital & when I asked him to squeeze my hand, he could. When I asked him how he was, he mouthed around the breathing tube, "Pretty good." I cried, I don't mind telling y'all. Thank God for his mercy, & please keep on praying for Daniel Freemon.

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-Aug-14 Price Change % Change
Gold, $/oz 1,310.80 4.10 0.31%
Silver, $/oz 19.95 -0.03 -0.17%
Gold/Silver Ratio 65.701 0.317 0.48%
Silver/Gold Ratio 0.0152 -0.0001 -0.48%
Platinum 1,483.00 16.30 1.11%
Palladium 856.55 7.15 0.84%
S&P 500 1,909.57 -10.67 -0.56%
Dow 16,368.27 -75.07 -0.46%
Dow in GOLD $s 258.13 -2.00 -0.77%
Dow in GOLD oz 12.49 -0.10 -0.77%
Dow in SILVER oz 820.42 -2.36 -0.29%
US Dollar Index 81.59 0.09 0.11%
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: 1,311.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,347.71 1,356.89 1,356.89
1/2 AE 0.50 668.10 691.55 1,383.11
1/4 AE 0.25 348.79 352.33 1,409.33
1/10 AE 0.10 138.86 144.21 1,442.10
Aust. 100 corona 0.98 1,278.62 1,287.62 1,313.63
British sovereign 0.24 310.46 322.46 1,369.84
French 20 franc 0.19 246.60 249.56 1,336.71
Krugerrand 1.00 1,322.80 1,332.80 1,332.80
Maple Leaf 1.00 1,326.00 1,341.00 1,341.00
1/2 Maple Leaf 0.50 753.83 688.28 1,376.55
1/4 Maple Leaf 0.25 334.31 350.69 1,402.77
1/10 Maple Leaf 0.10 138.97 142.90 1,428.99
Mexican 50 peso 1.21 1,566.32 1,577.32 1,308.22
.9999 bar 1.00 1,315.59 1,327.00 1,327.00
SPOT SILVER: 19.92      
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 14,239.23 14,489.23 20.26
US 40% silver 1/2s 0.30 5,683.18 5,833.18 19.77
100 oz .999 bar 100.00 1,981.50 2,041.50 20.42
10 oz .999 bar 10.00 204.15 205.15 20.52
1 oz .999 round 1.00 20.02 20.52 20.52
Am Eagle, 200 oz Min 1.00 21.67 22.92 22.92
SPOT PLATINUM: 1,483.00      
Plat. Platypus 1.00 1,508.00 1,548.00 1,548.00
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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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