The Moneychanger
Daily Commentary
Monday, 1 December a.d. 2014 Browse the commentary archive

I had to take Susan to a doctor's appointment in Nashville, it's been a frog-strangling rain all day, and in 20 minutes I have a meeting, but I just have to write y'all about this spectacular day.

Stocks seemed to turn down today, and probably did. S&P lost 14.12 (0.68%) to 2,052.44; Dow lost 51.44 (0.3%) to 17,776.8. Not too back, but small caps are in trouble. Looks like the peak is behind stocks.

Dow & Gold & Dow in silver staged a definitive turnaround. Peaked to new highs Friday, then plunged today to new lows. Highs were double tops. Headed way lower.

Shucks! I've gotten ahead of myself. On Friday OPEC announced it would not support the oil price, and oil nosedove, down 14% for the week. That spilled over into other markets on what was (remember) a very thin trading day. US dollar index made a marginal new high shile gold plunged, taking silver with it.

Last night I looked at midnight and silver was trading at 1492 cents. Gold around $1,142. Merciful heavens! Then I got up this morning and silver was already over 1600c. Gold ended today up $42.80 (3.6%) at $1,218 & silver up 115.9 cents (7.5%) at 1664.8. Gold came off a double bottom low and sliced clean through its 20 & 50 day moving averages! Silver barely missed closing above the 50 DMA, and both broke through established resistance that had stymied them for weeks (1650c & $1,205).

I have never seen a first half key reversal quite like this. All silver & gold need tomorrow are closes above today's.

Clearly, there was massive support down below, enough to send silver & gold rocketing up. Silver rose double gold's percentage rise.

Oh, and the ranges! Silver's low was 1411 cents [sic] and gold's 1141.70. Think about that, then look at those closes again.

More, the US dollar index gave back its bogus gains from Friday and lost 40 basis points to 80.01.

Of COURSE we need confirmation out of silver & gold, but the promise of this day is far, far higher prices.

Oh, oil recovered today, too.

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
1-Dec-14 Price Change % Change
Gold, $/oz 1,218.00 42.80 3.64%
Silver, $/oz 16.65 1.16 7.48%
Gold/Silver Ratio 73.162 -2.711 -3.57%
Silver/Gold Ratio 0.0137 0.0005 3.71%
Platinum 1,240.70 15.60 1.27%
Palladium 808.10 5.50 0.69%
S&P 500 2,053.44 -14.12 -0.68%
Dow 17,776.80 -51.44 -0.29%
Dow in GOLD $s 301.71 -11.89 -3.79%
Dow in GOLD oz 14.60 -0.58 -3.79%
Dow in SILVER oz 1,067.80 -83.22 -7.23%
US Dollar Index 80.01 -0.40 -0.50%
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: 1,215.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,247.51 1,258.46 1,258.46
1/2 AE 0.50 625.67 641.39 1,282.77
1/4 AE 0.25 312.84 326.77 1,307.09
1/10 AE 0.10 127.56 133.14 1,331.41
Aust. 100 corona 0.98 1,185.87 1,197.87 1,222.06
British sovereign 0.24 287.94 299.94 1,274.17
French 20 franc 0.19 228.71 231.81 1,241.61
Krugerrand 1.00 1,231.71 1,241.71 1,241.71
Maple Leaf 1.00 1,230.90 1,245.90 1,245.90
1/2 Maple Leaf 0.50 699.14 638.35 1,276.70
1/4 Maple Leaf 0.25 310.05 325.25 1,301.01
1/10 Maple Leaf 0.10 128.89 132.53 1,325.33
Mexican 50 peso 1.21 1,458.56 1,482.56 1,229.63
.9999 bar 1.00 1,220.16 1,231.90 1,231.90
SPOT SILVER: 16.47      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.75 26.50 34.64
VG+ Peace dollar 0.77 18.50 22.00 28.76
90% silver coin bags 0.72 13,027.30 13,384.80 18.72
US 40% silver 1/2s 0.30 4,666.90 4,816.90 16.33
100 oz .999 bar 100.00 1,637.00 1,697.00 16.97
10 oz .999 bar 10.00 169.70 170.70 17.07
1 oz .999 round 1.00 16.57 17.12 17.12
Am Eagle, 200 oz Min 1.00 18.22 19.22 19.22
SPOT PLATINUM: 1,240.70      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,265.70 1,305.70 1,305.70
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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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