The Moneychanger
Daily Commentary
Thursday, 14 August a.d. 2014 Browse the commentary archive

Everything about gold says, "I'm going up!" while silver stubbornly says, "I'm not interested."

Dow gained 61.78 (0.37%) to 16,713.58, reaching toward the point of 50% correction of the plunge (16,743) and reaching toward its 20 day moving average (16,754). S&P500 rose 8.46 (0.43%) to 1,955.18. S&P500 already passed the 50% correction at 1,948. but hits the 61.8% correction at 1,958.32.

Tomorrow will speak loudly.

Dow in silver jigged down today, 0.11%. Dow in gold jigged up 0.22%. Still waiting on a message from Dow in silver that it's turning down. Dow in Gold remains below 200 day moving average, and in full skydiving mode.

Currencies jiggled, but did nothing. US dollar index lost 4 basis points to close at 81.64. Euro rose 0.01% (get out your electron microscope) to $1.3366 & the yen fell 0.03% to 97.61.

I searched the news today for something silly or stupid to lampood but it was all nasty, brutal, or just plain stupid. I'll pass.

Gold climbed $1.10 (0.08%) to close Comex at $1,313.90. Silver gained 6.1 cents to 1987.1c.

Okay, finally, silver & gold are at least talking the same direction. Here's how their disagreement shapes up:

Gold has been in a rising trend for the last 8 days, and stands above its 200, 50, and 20 DMAs, in other words, perfect alignment for a rally. Gold's RSI stands above 50 and is rising, its MACD is rising, rate of change is positive and upward, and full stochastic is not yet overbought. I suppose gold might also have a check in its pocket signed by the US Treasurer for a million bucks, but that's about all it lacks. Whoops, I neglected to note that it has traded through and above the downtrend line from the October 2012 high.

All that argues the next move is to the second floor, but not silver. In the last eight days silver has made -- at the beginning and last two days -- a sort of tiny double bottom at 1970c. It languishes below its 200 DMA, and 50 DMA and 20 DMA, which has turned down. MACD is negative. Rate of change has turned up but is still negative. RSI crouches below 50 at 39.54. Silver has, it is true, been trading since June above the downtrend from the August 2013 high.

To break this impasse downward, gold would have to close below $1,280 and silver below 1970c. To the upside, gold needs a close over $1,325 & silver over 2050c. Till that happens we are just marking time.

I expect both will resolve upward, and ought to shortly.

On 14 August 1880 the construction of the Cologne Cathedral, largest in northern Europe, was finally completed. Building was begun in 1248.

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
14-Aug-14 Price Change % Change
Gold, $/oz 1,313.90 1.10 0.08%
Silver, $/oz 19.87 0.06 0.31%
Gold/Silver Ratio 66.121 -0.148 -0.22%
Silver/Gold Ratio 0.0151 0.0000 0.22%
Platinum 1,470.20 -0.70 -0.05%
Palladium 886.65 4.55 0.52%
S&P 500 1,955.18 8.46 0.43%
Dow 16,713.58 61.78 0.37%
Dow in GOLD $s 262.96 0.75 0.29%
Dow in GOLD oz 12.72 0.04 0.29%
Dow in SILVER oz 841.10 0.53 0.06%
US Dollar Index 81.64 -0.04 -0.05%
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SPOT GOLD: 1,312.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,341.48 1,358.54 1,358.54
1/2 AE 0.50 675.47 692.40 1,384.79
1/4 AE 0.25 337.74 352.76 1,411.05
1/10 AE 0.10 137.72 143.73 1,437.30
Aust. 100 corona 0.98 1,280.18 1,289.18 1,315.22
British sovereign 0.24 310.84 322.84 1,371.45
French 20 franc 0.19 246.90 249.86 1,338.31
Krugerrand 1.00 1,327.04 1,337.04 1,337.04
Maple Leaf 1.00 1,327.60 1,342.60 1,342.60
1/2 Maple Leaf 0.50 754.75 689.12 1,378.23
1/4 Maple Leaf 0.25 334.71 351.12 1,404.48
1/10 Maple Leaf 0.10 139.14 143.07 1,430.73
Mexican 50 peso 1.21 1,574.56 1,585.56 1,315.05
.9999 bar 1.00 1,317.19 1,328.60 1,328.60
SPOT SILVER: 19.85      
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 14,010.43 14,260.43 19.94
US 40% silver 1/2s 0.30 5,662.53 5,812.53 19.70
100 oz .999 bar 100.00 1,974.50 2,034.50 20.35
10 oz .999 bar 10.00 203.45 204.45 20.45
1 oz .999 round 1.00 19.95 20.45 20.45
Am Eagle, 200 oz Min 1.00 21.60 22.85 22.85
SPOT PLATINUM: 1,470.20      
Plat. Platypus 1.00 1,495.20 1,535.20 1,535.20
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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.
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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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