The Moneychanger
Weekly Commentary
Friday, 12 December a.d. 2014 Browse the commentary archive
Here's the weekly scorecard:
  5-Dec-14 12-Dec-14 Change % Change
Silver, cents/oz. 1,619.60 1,701.90 82.30 5.1
Gold, dollars/oz. 1,190.10 1,222.00 31.90 2.7
Gold/silver ratio 73.481 71.802 -1.679 -2.3
Silver/gold ratio 0.0136 0.0139 0.0003 2.3
Dow in Gold Dollars (DIG$) 311.94 292.33 -19.61 -6.3
Dow in gold ounces 15.09 14.14 -0.95 -6.3
Dow in Silver ounces 1,108.84 1,015.38 -93.46 -8.4
Dow Industrials 17,958.79 17,280.83 -677.96 -3.8
S&P500 2,075.37 2,002.33 -73.04 -3.5
US dollar index 89.36 88.33 -1.03 -1.2
Platinum 1,219.00 1,231.00 12.00 1.0
Palladium 803.20 816.55 13.35 1.7

Last week I made that horrifying simile comparing the stock market to a meth addict. I said then the collapse was not far off. Well, the cops showed up this week. Dow lost 3.8%, S&P500 skidded 3.5%. Lo, the dollar index weakened as well, off 1.2% weakened as well, off 1.2% for the week. Silver shone with a 5.1% gain (go, silver!) and gold climbed 2.7%. White metals rose slightly.

West Texas Intermediate Crude Oil fell another 2.81% today to $57.49/barrel. Ouch. Bad news for the shale oil industry. Bad news for stocks.

Stocks fell from the open & never recovered. S&P500 lost 315.51 (1.79%) to 17,280.83. S&P500 lost 33 (1.62%) to 2,002.33. Mercy. These are not happy charts. Both skidded to a stop just above their 50 DMA and closed on the low. That tells you it is bad and getting worse. Dow remains below the uptrend line from the 2009 lows. When it reaches 1,975, the S&P500 will be below the same line. All indicators negative & getting negativer.

Jaws of Death or megaphone pattern in the Dow in Gold & Dow in Silver has snapped shut like a gator.

Dow in gold chart is here,

The broadening top (Jaws of Death) has been confirmed by a sharp breakdown that today took the Dow in Gold way below its 50 DMA (G$296.85 or 14.36 troy oz.). It fell 1.34% to close at G$292.30 gold dollars (14.14 oz). No support stands ready to catch it between here and the 200 DMA (G$274.93 or 13.3 oz). Will keep falling.

Dow in silver kept plunging. Lost 1.57% to S$1,309.89 silver dollars (1,013.12 oz) & stopped at the uptrend line from July of this year. Some support may occur around the last low at S$1,196.81 (925.56 oz). 200 DMA stands at S$1,158.26 (895.84).

Dow in silver chart is at

As long as these indicators continue plunging, they are witnessing that (1) the lows on 1 December were THE lows for the 3-1/2 year correction, and (2) stocks have peaked & turned down.

US dollar index dropped today (down 29 basis points to 88.33) but has not yet broken down although it has walked through the bottom boundary of the rising wedge. Close below 87.50 will break it.

Gold lost $3.10 on Comex to close at $1,222. Silver shaved off 4 cents to 1701.9 cents.

To last week's higher weekly close, silver & gold added another this week. Both need a little higher prices to close above their 20 week moving averages.

Both silver & gold flatlined today as most of the last three days. Short term traders closing out positions before the weekend suffice to explain today's losses. Next week both ought to rise -- "ought" means they must do that or evidence that they have lost steam. I expect to see higher prices next week and for gold to challenge $1,255. I also expect this stock plunge to snowball.

Here's a Christmas gift idea: At Home in Dogwood Mudhole. You can get them for $23.95 a copy, or Volume I AND Vol. 2 for a $30 special price. Of course, you might not want to buy them for your relatives, 'cause they're liable to laugh themselves sick.

Y'all enjoy your weekend!

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
12-Dec-14 Price Change % Change
Gold, $/oz 1,222.00 -3.10 -0.3
Silver, $/oz 17.02 -0.04 -0.2
Gold/Silver Ratio 71.802 -0.180 -0.3
Silver/Gold Ratio 0.0139 -0.0000 -0.2
Platinum 1,231.00 -10.70 -0.9
Palladium 816.55 -3.05 -0.4
S&P 500 2,035.33 9.19 0.5
Dow 17,280.83 -315.51 -1.8
Dow in GOLD $s 292.33 -4.55 -1.5
Dow in GOLD oz 14.14 -0.22 -1.5
Dow in SILVER oz 1,015.38 -16.11 -1.6
US Dollar Index 88.33 -0.29 -0.3
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: 1,222.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,254.39 1,265.39 1,265.39
1/2 AE 0.50 629.12 644.92 1,289.84
1/4 AE 0.25 314.56 328.57 1,314.30
1/10 AE 0.10 128.27 133.87 1,338.75
Aust. 100 corona 0.98 1,187.61 1,199.61 1,223.84
British sovereign 0.24 289.53 301.53 1,280.91
French 20 franc 0.19 229.97 233.06 1,248.31
Krugerrand 1.00 1,237.27 1,247.27 1,247.27
Maple Leaf 1.00 1,237.60 1,252.60 1,252.60
1/2 Maple Leaf 0.50 703.00 641.87 1,283.73
1/4 Maple Leaf 0.25 311.76 327.05 1,308.18
1/10 Maple Leaf 0.10 129.60 133.26 1,332.63
Mexican 50 peso 1.21 1,466.60 1,490.60 1,236.29
.9999 bar 1.00 1,226.88 1,238.60 1,238.60
SPOT SILVER: 17.01      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.75 26.50 34.64
VG+ Peace dollar 0.77 19.00 22.00 28.76
90% silver coin bags 0.72 13,016.58 13,374.08 18.71
US 40% silver 1/2s 0.30 4,824.73 4,974.73 16.86
100 oz .999 bar 100.00 1,690.50 1,750.50 17.51
10 oz .999 bar 10.00 175.05 176.05 17.61
1 oz .999 round 1.00 17.11 17.66 17.66
Am Eagle, 200 oz Min 1.00 18.76 19.41 19.41
SPOT PLATINUM: 1,231.00      
Platinum Platypus 1.00 1,256.00 1,296.00 1,296.00
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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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