The Moneychanger
Daily Commentary
Thursday, 28 August a.d. 2014 Browse the commentary archive

Those hopeful signs I was squinting to see in silver & gold ripened today. More about that below.

Stocks turned down today. Dow lost 42.44 (0.25%) to 17,079.57. They hang again a mere 90 points above the uptrend line from the March 2009 low. This, remember, was the line the Dow fell through at end-July. This, as the Roman haruspex might tell you, in a very bad liver is healthy-seeming sheep.

S&P500 dropped 3.38 (0.17%), but dead out of its uptrend from early August. Broke clean down, thru the line.

More interesting to those of us who trust not the Potemkin Economy peopled by central bankers, bankeresses, and other bogus luminaries, were the Dow in Gold & Dow in Silver.

Dow in Silver (bless its heart!) plunged 1.16% today to end at 871.01 oz (S$1,126.15 silver dollars). 'Tis a small sign, yet a sign still, that the DiS closed back within the upper channel line. This it had previously "thrown over" (risen above) a couple of weeks ago. 'Pears to have changed headings 180 degrees to "straight down."

Dow in gold likewise turned down, but only 0.74% to 13.24 oz (G$273.69 gold dollars). Can't call it a reversal yet, but appears to have left a double top behind.

No action much in rotten, scrofulous, corrupt, parasitic fiat currencies today. US dollar index shaved off one basis point, nothing, a chigger's whisker, to 82.50. Coming off an uncommonly overbought condition, the dollar is begging to turn earthward. Euro is as oversold as the dollar is overbought. Lost 0.8% today for a $1.3183 close. Watch out, next move might be up. Yen did rise today, 0.16% to 96.45 cents/Y100. Also moving up from an oversold state.

Gold added $6.80 (0.53%) today to shutter Comex at 1,288.70. Silver gained 12.9 cents (0.66%) to 1953.4 cents, blasting out of its pit.

Ponder gold first. High today at $1,297.60 hit the downtrend line from October 2012 we've been fighting with since June. Closed above the 200 DMA ($1,284.94) & rose stoutly off a $1,283 low as the day began.

Silver bounced like a kangaroo. Cut into but did not close over its 20 DMA (1971c). RSI bounced up sharply, MACD line almost turned up.

I remind y'all once again, September on average is the strongest month of the year for silver & gold. We need milestone confirmations above still, but metals today made a heartening first step. Next week promises much progress.

After my comments yesterday about the weather havoc wreaked by Krakatoa's 1883 eruption, a reader kindly reminded me of the 1815 eruption of Mount Tambora that led to the Year Without A Summer, 1816. Tambora (Indonesia) erupted in April 1815, after 1812 volcanic eruptions in the Caribbean and Indonesia, and in Japan in 1813 and the Philippines in 1814. The huge cloud of atmospheric dust from these volcanoe caused a volcanic winter in the Northern Hemisphere. In New England & Canada there was, literally, no summer and they saw snows in June. Besides the summer climate abnormalities, global temperatures dropped by 0.7 to 1.3% Fahrenheit.

On 28 August 1864 the First Geneva Convention governing the rules of warfare was signed by 26 nations. Unhappily, it came too late to prevent the war crimes committed against the South in the War for Southern Independence.

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
28-Aug-14 Price Change % Change
Gold, $/oz 1,288.70 6.80 0.53%
Silver, $/oz 19.53 0.13 0.66%
Gold/Silver Ratio 65.972 -0.088 -0.13%
Silver/Gold Ratio 0.0152 0.0000 0.13%
Platinum 1,427.20 5.30 0.37%
Palladium 897.20 3.30 0.37%
S&P 500 1,996.74 -3.38 -0.17%
Dow 17,079.57 -42.44 -0.25%
Dow in GOLD $s 273.97 -2.14 -0.77%
Dow in GOLD oz 13.25 -0.10 -0.77%
Dow in SILVER oz 874.35 -8.00 -0.91%
US Dollar Index 82.50 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: 1,289.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,322.05 1,334.94 1,334.94
1/2 AE 0.50 663.73 680.37 1,360.74
1/4 AE 0.25 331.87 346.63 1,386.54
1/10 AE 0.10 135.32 141.23 1,412.33
Aust. 100 corona 0.98 1,255.41 1,264.41 1,289.95
British sovereign 0.24 305.44 317.44 1,348.52
French 20 franc 0.19 242.61 245.61 1,315.51
Krugerrand 1.00 1,301.41 1,311.41 1,311.41
Maple Leaf 1.00 1,304.80 1,319.80 1,319.80
1/2 Maple Leaf 0.50 741.64 677.15 1,354.29
1/4 Maple Leaf 0.25 328.90 345.02 1,380.09
1/10 Maple Leaf 0.10 136.72 140.59 1,405.88
Mexican 50 peso 1.21 1,545.65 1,556.65 1,291.08
.9999 bar 1.00 1,294.31 1,305.80 1,305.80
SPOT SILVER: 19.53      
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 13,963.95 14,249.95 19.93
US 40% silver 1/2s 0.30 5,569.60 5,719.60 19.39
100 oz .999 bar 100.00 1,943.00 2,003.00 20.03
10 oz .999 bar 10.00 200.30 201.30 20.13
1 oz .999 round 1.00 19.63 20.13 20.13
Am Eagle, 200 oz Min 1.00 21.28 22.53 22.53
SPOT PLATINUM: 1,427.20      
Plat. Platypus 1.00 1,452.20 1,492.20 1,492.20
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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.
  • 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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