The Moneychanger
Daily Commentary
Wednesday, 3 September a.d. 2014 Browse the commentary archive

News reported today that CVS drugstores won't be carrying tobacco after October, and they are plumping themselves on the back big time about what a swollen corporate conscience they have, all their brave sacrifices for health, etc., as if kicking poor old tobacco around ranked as moral courage. Look, if they REALLY wanted to contribute to Americans health, they would stop selling all those patent medicines, including the prescription ones, that kill or addict so many people. Whoops! Can't do that, because that's where their REAL money is. Whoops again! Don't forget about all the cases of poisonous, white sugar laden soda and candy they sell.

From Monday, 8 September, through Friday, 12 September, I will be vacationing with my family, so I will not be publishing daily commentaries those days.

Silver & gold bounced today, but without making any meaningful progress. US dollar backed off, and stocks were sickly.

Stocks were mixed. Nasdaq and Nasdaq 100 dropped a leetle, S&P500 lost 1.56 (0.08%) to 2,000.72. Dow gained a nothing 10.72 (0.06%) to 17,078.28.

In fact, the S&P500 posted the first half of a key reversal today by reaching into new high ground but closing lower than yesterday. As always, that needs confirming a second day by a lower close.

Dow in gold backed off 0.24% to 13.44 oz (G$277.83 gold dollars). Dow in silver rose a tiny 0.04% to 890.00 oz (S$1,150.71 silver dollars, knocking at the June high, 892.99 oz (S$1,154.57).

US Dollar index fell 14 basis points (0.17%) to 82.87, giving up most of yesterday's gains. It remains overbought so does today make yesterday a mere fluke, a spike without follow-through? If I could answer that question with certainty I'd be sippin' wine on the Riviera. I'm going to guess that that overbought burden will bring it down, however.

Yen rose today 0.28% to 95.42. Chart pattern is a cascading fall with a gap, and island after the gap, and another gap down. That generally paints a completed pattern and reversal, so the yen is set up for a rally, at least to work off some of that overboughtness. Euro rose 0.13% to $1.3151 but still inspires no confidence. Like the yen, the overbought euro is inline for at least a little rally.

Ten year Treasury Note yield today tried to climb toward its 50 DMA but was slapped back. At hits high it reached 2.457%, but ended the day at 2.41%, down 0.37% from yesterday's close. All the same, it is trying to climb.

Gold clambered up $5.20 (0.4%) today to end Comex at $1,268.90 Silver rose 3.7 cents (0.2%) to 1910.8c.

All that can be said is, Well, they haven't busted down old support levels yet and sunk toward the earth's core.

Gold rose away from the lower line of the downtrending range, but not far enough to rise back above the uptrend line from the December low. I read that yesterday saw extra high volume at odd times, which leads to the conclusion the Nice Government Men or their egg-sucking dog lackeys were slamming gold again. But they are vultures, they prey on the sick, so if gold were more robust right here it could shake off that attack. We will see whether gold does or not. If not, it might once again visit $1,180.

Silver at 1910.8 cents doesn't excite anyone but those who recognize what a bargain it is here. Today's tiny rise changed nothing. Silver is still sliding down that downtrend line from the August 2013 high. Oddly enough, the MACD is trying to turn up.

Here is one other hint that silver & gold are not about to waterfall: the gold silver ratio has stayed roughly flat, and has still not exc3e3e its August high. Today it closed beneath the 20 DMA, that is, crossed the tripwire of a downturn. All its momentum indicators are also pointing down. Yet normally when silver & gold plunge, silver plunges faster, taking the ratio higher. So the ratio is not confirming lower prices in gold and silver.

So even though silver & gold look peaked, other indicators show some life.

On 3 September 1783 the Treaty of Paris was signed between the several United States and the British Crown in which King George III relinquishes all claim to their government. The treaty begins, "In the name of the most Holy and undivided Trinity."

In 1993 I wrote for and with Jim Blanchard, SILVER BONANZA: How to Profit from the Coming Bull Market in Silver. When a New York publisher picked it up they gutted it, dropping out all the history that alone makes silver's behavior understandable. Now I have republished the original complete version in PDF, with permission. Originally published at $75, we sell it on our website for $39. But for one week only am offering it to my commentary readers for $19, that's twenty bucks off list price. You can only get that price if you used the code "MC0903" when you check out. And sorry, the book is only available in PDF format. Offer expires 10 September 2014.

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
3-Sep-14 Price Change % Change
Gold, $/oz 1,268.90 5.20 0.41%
Silver, $/oz 19.11 0.04 0.19%
Gold/Silver Ratio 66.407 0.144 0.22%
Silver/Gold Ratio 0.0151 -0.0000 -0.22%
Platinum 1,414.00 -16.30 -1.14%
Palladium 875.35 -26.05 -2.89%
S&P 500 2,000.72 -1.56 -0.08%
Dow 17,078.28 10.22 0.06%
Dow in GOLD $s 278.22 -0.98 -0.35%
Dow in GOLD oz 13.46 -0.05 -0.35%
Dow in SILVER oz 893.78 -1.20 -0.13%
US Dollar Index 82.87 -0.14 -0.17%
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: 1,269.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,298.19 1,313.42 1,313.42
1/2 AE 0.50 653.02 669.40 1,338.80
1/4 AE 0.25 326.51 341.04 1,364.18
1/10 AE 0.10 133.14 138.96 1,389.56
Aust. 100 corona 0.98 1,235.17 1,244.17 1,269.30
British sovereign 0.24 300.51 312.51 1,327.59
French 20 franc 0.19 238.70 241.72 1,294.71
Krugerrand 1.00 1,280.42 1,290.42 1,290.42
Maple Leaf 1.00 1,284.00 1,299.00 1,299.00
1/2 Maple Leaf 0.50 729.68 666.23 1,332.45
1/4 Maple Leaf 0.25 323.60 339.46 1,357.83
1/10 Maple Leaf 0.10 134.51 138.32 1,383.21
Mexican 50 peso 1.21 1,522.26 1,533.26 1,271.67
.9999 bar 1.00 1,273.44 1,285.00 1,285.00
SPOT SILVER: 19.13      
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 13,713.70 13,999.70 19.58
US 40% silver 1/2s 0.30 5,451.60 5,601.60 18.99
100 oz .999 bar 100.00 1,903.00 1,963.00 19.63
10 oz .999 bar 10.00 196.30 197.30 19.73
1 oz .999 round 1.00 19.23 19.73 19.73
Am Eagle, 200 oz Min 1.00 20.88 22.13 22.13
SPOT PLATINUM: 1,414.00      
Plat. Platypus 1.00 1,439.00 1,479.00 1,479.00
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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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