The Moneychanger
Weekly Commentary
Friday, 8 August a.d. 2014 Browse the commentary archive
Here's the weekly scorecard:
  1-Aug-14 8-Aug-14 Change % Change
Silver, cents/oz. 2,033.20 1,990.20 -43.00 -2.1
Gold, dollars/oz. 1,293.60 1,308.90 15.30 1.2
Gold/silver ratio 63.624 65.767 2.143 3.4
Silver/gold ratio 0.0157 0.0152 -0.0005 -3.3
Dow in Gold Dollars (DIG$) 263.57 261.44 -2.12 -0.8
Dow in gold ounces 12.75 12.65 -0.10 -0.8
Dow in Silver ounces 811.20 831.77 20.57 2.5
Dow Industrials 16,493.37 16,553.93 60.56 0.4
S&P500 1,925.15 1,931.59 6.44 0.3
US dollar index 81.43 81.46 0.03 0.0
Platinum 1,463.80 1,481.30 17.50 1.2
Palladium 865.50 861.00 -4.50 -0.5

This week is a mass of confusion and contradiction: silver down, gold up, stocks weaseling higher, platinum up but palladium down. Hard to find a thread that stitches all that together.

Dow continues on a confirmed monthly key reversal (=break into new high ground with a lower close than the previous month, confirmed by a lower close in the next month).

Today the Dow rose 185.66 (1.13%) to 16,553.93 while the S&P500 rose 22.02 (1.15%) to 1,931.59. It appears that the Dow is doing no more than bouncing off its 200 DMA (16,348.82). MACD still calls for lower prices, but stocks probably will rally a bit to work off their oversoldness.

Like silver & gold, the Dow in Gold and Dow in Silver are contradicting each other. Dow in gold rose today, 1.44% to 12.63 oz (G$261.08 gold dollars), but from a hair's breadth above the uptrend line from August 2011 (12.452 oz against 12.4 oz or G$257.41 against G$256.33). All indicators call for lower prices, and the DiG is below all its moving averages, so momentum is firmly down.

Dow in Silver, on the other hand, has an upward correction that has not yet turned down. More, it punched into its 50 DMA today ($1,072.39 silver dollars or 829.43 oz). Today it rose 1.49% to S$1,074.89 (831.23 oz). Needs a close below $1,055.68 (816.5 oz) to confirm a downturn.

US dollar index, Parasite of Nations, Punisher of Savers, Terror of Investors, fell back below 81.50 support/resistance. Closed down 13 basis points to 81.46. May correct a little here before it resumes its rally. Euro rose 0.32% to $1.3406, but still looks like a motheaten old sweater you ought to throw away. Yen this week cancelled out the sell signal it flashed when it fell out of that triangle by trading back up into the gaps left behind. Still, that doesn't mean it's showing much strength -- bound in the same old range.

Silver fell 4.9 cents to 1990.2c today while gold lost $1.90 to $1,308.90.

Gold punched through the downtrend line form October 2012 today, a new high for the move, as high as $1,324.30, but couldn't hold on there and fell back under the line. That's lousy & the first half of a key reversal. A lower close on Monday confirms that reversal.

Gold rose 1.2% this week while silver fell 2.1%. That suggests that gold's rise was gassed by the Ukraine crisis. Silver never even rose above its 200 DMA this week.

Not far away at about 1960c stands the downtrend line from the August 2013 high. If silver doesn't catch there it could drop to 1860c. What's in favor of it stopping there? Well, it broke out through that line in June, and markets quite often trade back to a resistance line they have broken for a final kiss goodbye before moving higher.

I don't expect silver & gold to tumble significantly. Gold might hit $1,270, silver 1930c, but I believe they have turned up &, either after one more little low or immediately trade high the rest of the month in an August rally, classic time for precious metals rallies to begin.

On 8 August 1579 the cornerstone was laid for Danish astronomer Tycho Brahe's Uraniborg observatory. Born in 1546, Brahe losth is nose in a duel when he was 20. He wore a replacement said to be made of silver or gold, pasted on. He died after a banquet in Prague, where, according to fellow astronomer Johannes Kepler's first hand account, he refused to leave the banquet to relieve himself because it would have been a breach of etiquette. He died of a burst bladder. Oddly enough, the epitaph he wrote for himself said, "He lived like a sage and died like a fool."

Something doesn't smell right about the Ebola panic the media is fomenting. I heard this morning that 900 out of 1700 people who had contracted the disease had died. More people than that die from being hit by meteorites every day. Here's something else that makes no sense. If you believe in the germ theory of disease, why would you import an infected person across the ocean from Africa to Atlanta? So you could spread it to Atlanta? Can you trust the US CDC? The same people who left smallpox samples lying in a desk drawer for 30 years? Zut alors!

A reader has chided me for not giving proper credit and thanks for those medical personnel attending my friend Daniel and applying those means necessary to his recovery. He is right, and I thank God for each of them and their faithful, diligent service. They took Daniel off the ventilator today and he is recognizing people.

I'm always looking for natural, non-chemical answers, and here's a great one: No-BO deodorant for underarms or feet or athlete's foot, It contains no aluminum compounds or chemicals, and is not an anti-perspirant that stops up your pores. Rather, it contains natural substances that kill bacteria. I know it works because I use it. I have experienced only one problem with it: I use it too slowly. I only need to use it once ever two or three days. Because it contains no preservatives, it tends to harden after 5 or 6 months, so only order one stick or container at a time. Listen y'all: this stuff WORKS.

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
8-Aug-14 Price Change % Change
Gold, $/oz 1,308.90 4.10 0.3
Silver, $/oz 19.90 -0.05 -0.2
Gold/Silver Ratio 65.767 0.208 0.3
Silver/Gold Ratio 0.0152 -0.0000 -0.2
Platinum 1,478.50 -17.00 -1.1
Palladium 861.00 4.45 0.5
S&P 500 1,931.59 22.02 1.2
Dow 165,453.93 185.66 0.1
Dow in GOLD $s 2,613.06 -5.00 -0.2
Dow in GOLD oz 126.41 -0.24 -0.2
Dow in SILVER oz 8,313.43 29.72 0.4
US Dollar Index 81.46 -0.13 -0.2
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: 1,308.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,344.03 1,354.50 1,354.50
1/2 AE 0.50 673.47 690.34 1,380.68
1/4 AE 0.25 336.73 351.71 1,406.85
1/10 AE 0.10 137.31 143.30 1,433.03
Aust. 100 corona 0.98 1,276.37 1,285.37 1,311.34
British sovereign 0.24 309.92 321.92 1,367.53
French 20 franc 0.19 246.17 249.13 1,334.41
Krugerrand 1.00 1,321.79 1,331.79 1,331.79
Maple Leaf 1.00 1,323.70 1,338.70 1,338.70
1/2 Maple Leaf 0.50 752.50 687.07 1,374.14
1/4 Maple Leaf 0.25 333.72 350.08 1,400.31
1/10 Maple Leaf 0.10 138.72 142.65 1,426.48
Mexican 50 peso 1.21 1,565.15 1,576.15 1,307.25
.9999 bar 1.00 1,313.28 1,324.70 1,324.70
SPOT SILVER: 19.89      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26.00 28.50 37.25
VG+ Peace dollar 0.77 22.00 24.00 31.37
90% silver coin bags 0.72 14,182.03 14,432.03 20.18
US 40% silver 1/2s 0.30 5,674.33 5,824.33 19.74
100 oz .999 bar 100.00 1,978.50 2,038.50 20.39
10 oz .999 bar 10.00 203.85 204.85 20.49
1 oz .999 round 1.00 19.99 20.49 20.49
Am Eagle, 200 oz Min 1.00 21.64 22.89 22.89
SPOT PLATINUM: 1,478.50      
Platinum Platypus 1.00 1,503.50 1,543.50 1,543.50
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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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