The Moneychanger
Daily Commentary
Thursday, 13 November a.d. 2014 Browse the commentary archive

This has been an awfully sleepy week, which always leaves me suspicious & flinching.. Stocks have ground to higher highs the way you'd grind corn with quern-stone, little by little. Dow reached a new high today at 17,652.79, up another 40.59 or 0.23%. However, the S&P500 stalled and rose only 1.08 (0.05%) to 2,039.33.

Any time now.

I note in passing that one may draw an uptrend line from the April 2009 low in the Dow that riseth until this day. On 22 September the Dow broke down through that line and dropped like your grade average after you picked up beer drinking in college. Last three days it has been bumping up against that line. Markets frequently break out, move, then trade back to the breakout line for one last kiss good-bye.

Analogous break in the S&P500 came 13 October, but it only traded below that line six days. S&P500 is now bumping against another overhead resistance line.

MACD & Stochastics are at highest levels seen during this bull move. I don't know - maybe it can go on forever.

Dow in gold & Dow in silver are vibrating up and down in tiny zigzags. After their parabolic moves up, they look like they are quivering to begin what always happens after a parabolic up move: a concrete-block drop. DiG today rose 0.23% to 15.19 oz or G$314.00 gold dollars. Dow in Silver rose 0.23%, too, to 1,128.33 oz or $1,458.85. Both have thrown-over resistance lines above, so are ripe for a fall.

Silver and gold continued to go nowhere today. Gold rose on Comex $2.20 and silver fell 2/10 cent to 1561.7. Ranges were almost identical to yesterday's.

The metals' breaks below 15 month support levels has, on one hand, wrecked the picture technically. On the other hand, it means that the end of the correction draweth nigh -- but how nigh?

US dollar today lost 7 basis points but the daily chart was flat. As long as the dollar and stocks are rising hand in hand, silver & gold will remain red-headed stepchildren. Chart says the US dollar index could rise to 89, maybe to 92. A rising dollar alone is not necessarily strychnine for gold & silver, not if stocks break, but if the Dow breaks through here, why, we're looking at another 6-8 months or more of this misery.

Silver & gold today moved sideways in a narrow range. To break out the first step for gold is a close above $1,180, and for silver 1600c. Short of that, they're just marking time for another fall.

Don't shoot the messenger, I'm just reporting what I see.

On 13 November 1835 Texans proclaimed their independence from Mexico and called their new country the Lone Star Republic.

On 13 November 1940 Walt Disney's 126 minute animated movie Fantasia premiered. Y'all know you love those mushrooms doing the ballet.

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
13-Nov-14 Price Change % Change
Gold, $/oz 1,161.10 2.20 0.19%
Silver, $/oz 15.62 -0.00 -0.01%
Gold/Silver Ratio 74.348 0.150 0.20%
Silver/Gold Ratio 0.0135 -0.0000 -0.20%
Platinum 1,199.50 -6.30 -0.52%
Palladium 770.50 -2.80 -0.36%
S&P 500 2,039.33 108.00 5.59%
Dow 17,652.79 40.59 0.23%
Dow in GOLD $s 314.28 0.13 0.04%
Dow in GOLD oz 15.20 0.01 0.04%
Dow in SILVER oz 1,130.36 2.74 0.24%
US Dollar Index 87.83 -0.07 -0.08%
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: 1,160.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,192.04 1,201.32 1,201.32
1/2 AE 0.50 597.25 612.27 1,224.54
1/4 AE 0.25 298.62 311.94 1,247.75
1/10 AE 0.10 121.77 127.10 1,270.97
Aust. 100 corona 0.98 1,129.75 1,141.75 1,164.82
British sovereign 0.24 274.87 286.87 1,218.64
French 20 franc 0.19 218.33 221.50 1,186.41
Krugerrand 1.00 1,175.79 1,185.79 1,185.79
Maple Leaf 1.00 1,175.70 1,190.70 1,190.70
1/2 Maple Leaf 0.50 667.40 609.37 1,218.74
1/4 Maple Leaf 0.25 295.98 310.49 1,241.95
1/10 Maple Leaf 0.10 123.03 126.52 1,265.16
Mexican 50 peso 1.21 1,388.15 1,412.15 1,171.22
.9999 bar 1.00 1,164.76 1,176.70 1,176.70
SPOT SILVER: 15.59      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 24.00 27.00 35.29
VG+ Peace dollar 0.77 19.00 22.50 29.41
90% silver coin bags 0.72 12,394.53 12,752.03 17.84
US 40% silver 1/2s 0.30 4,405.83 4,555.83 15.44
100 oz .999 bar 100.00 1,548.50 1,608.50 16.09
10 oz .999 bar 10.00 160.85 161.85 16.19
1 oz .999 round 1.00 15.69 16.24 16.24
Am Eagle, 200 oz Min 1.00 17.34 18.34 18.34
SPOT PLATINUM: 1,199.50      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,224.50 1,264.50 1,264.50
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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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