The Moneychanger
Daily Commentary
Tuesday, 2 December a.d. 2014 Browse the commentary archive

I know I was burbling & warbling yesterday, but considering the kidney stone grade pain of the last three years and more, bear with me.

Behold, the Dark Side of the Force struck back today. US Dollar index, still constrained within a chart pattern that could be either a top or continuation, made an eentsy marginal new high. Dow surged 102.75 to a new high on more fake news from the fake economy. Greed & Lies have met together, Stupidity & Gullibility have kissed each other. More Lies shall spring out of Washington, & Greed shall look down smugly from the skyscrapers.

It's nuts.

Okay, things bounced around today, like you snuggling down in your seat before you start the car, but nothing changed. Yesterday's silver & gold performance remains spectacular, & promiseth yet more spectacular things.

Dow reached 17,789.55, up 102.75 (0.58$%) but the S&P500 didn't make a new high, rising 13.11 (0.64% to 2,066.55. Non-confirmation: S&P500 looks to be rolling over, and isn't far above its 20 DMA.

Dow measured in metals tastes so sweet in my mouth I have to share the pictures with y'all: http://scharts.co/1yeoHqy and http://scharts.co/1yeoUdf

Dow in Gold rose 1.74% today, mostly thanks to the Dow's strength, & ended at G$308.63 gold dollars (14.93 troy ounces). When you look at the chart note the double tops at 15.38 and 15.29, then yesterday's close at 14.68 for a lower low, and its abiding position beneath the 20 DMA (green line). it's a picture of a market that has topped, and it would have to break that double top to gainsay that.

Dow in Silver rose 0.55% to S$1,404.00 silver dollars (1,085.91 oz). Here is a similar pattern, with double tops at 1,143.15 and 1,153.56 and yesterdays collapse beneath the 20 DMA. Indicators al point down.

We won't get final confirmation that silver & gold have turned up, and stocks have turned down against them, until we see closes below the 200 day moving averages, but this looks like the real thing. That implies stocks should stumble very soon.

US Dollar index closed at 88.68, up 67 and at the top of the pattern. There's a snapshot here, http://scharts.co/1yeqYSz Dollar index has loafed in this pattern for some time, & time ain't on anybody's side, and don't you mind what the song says otherwise. A break below 87.50 turns the dollar index down. If it breaks out skyward, it could reach 93.5. Never underestimate the gullibility of investors in Fiat-Money-World.

Yen kept sinking, down 0.75% to 83.88. No news there -- rain is wet. Euro fell back from the top of an even sided triangle to its bottom boundary. Just can't build escape velocity. Lost 0.72% to $1.2381.

Gold ducked back beneath $1,205 support, losing $18.80 to $1,199.20. Silver gave back 24 cents and bent below 1660.

Why ain't that so bad? Because it undoeth not yesterday's wondrous work.

Gold's chart at http://scharts.co/1yKs2Bf shows two bottoms at $1,130.40 and $1,141.70. Yesterday's range was enormous, & the reversal was unequivocal and unambiguous. Yes, yes, today gold gave back some of that gain, but that's all right. It remained well above its 20 DMA and only slightly below its 50 DMA with that double bottom for good footing, is now ready to pull on its seven league boots. Yesterday we may have seen the final low of the long correction.

Silver's picture's here, http://scharts.co/1yeuAnx

After a bone-jarring fall to 1415c, in the same day silver rocketed back to 1665c. On high volume. With indicators fueling it upward.

I expect we'll have to spend a long time backing and filling next year, but here in the next three weeks silver & gold should rally strongly-- very strongly.

It's an irony of history that people often become the very thing they oppose. For instance, as a French Revolutionary General, Napoleon Bonaparte opposed monarchy, but on 2 December 1804 he was crowned Emperor of France. His conversion from ardent Republicanism to even more ardent monarchy took less than 15 years.

In another historical irony, the French President Louis Bonaparte staged a coup d'├ętat on 2 December 1851 to overthrow the Second Republic and establish himself emperor. No change there: he was a despicable self-seeker from the outset and never changed.

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
2-Dec-14 Price Change % Change
Gold, $/oz 1,218.00 -18.80 -1.52%
Silver, $/oz 16.65 -0.24 -1.42%
Gold/Silver Ratio 73.162 -0.073 -0.10%
Silver/Gold Ratio 0.0137 0.0000 0.10%
Platinum 1,216.40 -24.10 -1.94%
Palladium 801.35 -5.05 -0.63%
S&P 500 2,053.44 -14.12 -0.68%
Dow 17,879.55 102.75 0.58%
Dow in GOLD $s 303.45 6.33 2.13%
Dow in GOLD oz 14.68 0.31 2.13%
Dow in SILVER oz 1,073.98 21.35 2.03%
US Dollar Index 88.68 0.67 0.76%
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SPOT GOLD: 1,198.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,229.56 1,240.34 1,240.34
1/2 AE 0.50 616.66 632.16 1,264.31
1/4 AE 0.25 308.33 322.07 1,288.28
1/10 AE 0.10 125.73 131.22 1,312.25
Aust. 100 corona 0.98 1,167.62 1,179.62 1,203.45
British sovereign 0.24 283.80 295.80 1,256.57
French 20 franc 0.19 225.42 228.54 1,224.11
Krugerrand 1.00 1,212.78 1,222.78 1,222.78
Maple Leaf 1.00 1,213.40 1,228.40 1,228.40
1/2 Maple Leaf 0.50 689.08 629.16 1,258.32
1/4 Maple Leaf 0.25 305.59 320.57 1,282.29
1/10 Maple Leaf 0.10 127.03 130.63 1,306.26
Mexican 50 peso 1.21 1,437.57 1,461.57 1,212.21
.9999 bar 1.00 1,202.59 1,214.40 1,214.40
SPOT SILVER: 16.43      
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 13,034.45 13,391.95 18.73
US 40% silver 1/2s 0.30 4,655.10 4,805.10 16.29
100 oz .999 bar 100.00 1,633.00 1,693.00 16.93
10 oz .999 bar 10.00 169.30 170.30 17.03
1 oz .999 round 1.00 16.53 17.08 17.08
Am Eagle, 200 oz Min 1.00 18.18 19.18 19.18
SPOT PLATINUM: 1,216.40      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,241.40 1,281.40 1,281.40
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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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