The Moneychanger
Daily Commentary
Monday, 22 December a.d. 2014 Browse the commentary archive

This week can be kind of crazy because of thin markets with so many traders taking off at Christmas.

Both the Dow & S&P500 made new highs. Dow gained 154.64 (0.87%) to 17,959.44. S&P500 didn't quite gain half as much, up 0.38% (7.89) to 2,078.54. Both these moves came without new intraday highs, a little suspicious, but could easily inch up the next few points to 18,000 & 2,100, and still remain within trend lines. Y'all remember what I said about broadening tops, they can wear you out working back & forth. Gonna be a holiday party. Hope nobody takes pictures.

Dow in Gold nearly reached the upper boundary of the Gator Jaws. Gained 2.13% to G$314.62 gold dollars (15.22 troy ounces). Dow in silver ended at S$1,480.13 (1,144.79 troy ounces). Still within the Jaws.

US dollar index rose 0.11% to 89.94. I have nothing bright to say about it. It's doing the same thing stocks are doing, inching, inching to new highs preparatory to dropping like a Holstein cow out of a Russian cargo plane.

Euro has sunk back to the bottom, and dropped another 0.4% to a new low at $1.2225. Yen barely moved, down 90,.45% to 83.29. Since Abe won the election 14 December, the yen is just waiting to drop more.

Gold dropped $16.20 (1.35%) to $1,179.70. Silver lost 34.2 cents (2.14%) and perched at 1564.9 cents.

After a flat weekend, about noon today gold broke $1,195, then simply slid down the hill, only rallying after it hit a low at $1,172.60. If it doesn't catch here (forming the bottom of a right shoulder), it will sink to the rising uptrend line at $1,155. Indicators point earthward. Silver may fall back toward 1500c, but I still believe the price lows lie in the past.

News reports credit oil's drop today (WTIC down 4.14% to $55.38/bbl) with pulling gold down. Maybe, but oil's plunge is way overdone on a value basis. Whoops! I used the forgotten word. Y'all remember "value" don't you, before "momentum" became the only word in investors' vocabulary? But what about oil as the barometer of global economic activity? Let's see, oil is plunging, forecasting the global economy will plunge but somehow the US economy will escape? Right, I got it, Candide, this is the Best of All Possible Worlds, right?

So without telling me Susan agreed to dog-sit Duke while my son Zachariah and his wife Victoria travel out to her brother's wedding in Washington state. Duke is about 114 in dog years, a chocolate Lab with a face gone white with age. As Victoria babies Duke, so Susan babies Duke. She feeds him, pumpkin for his constipation, and dog food. She gives him joint medicine and I know not what other medicine. She coaxes him to go outside, holding the door open while Duke imitates an American dog listening to commands in Mandarin Chinese. And unless Duke just feels like it, he don't do a durned thing he don't want to do, and spends most of his time sleeping on his comfy bed under the stairs.

Okay, I will admit it. I am getting just a little jealous of Duke.

But he blew his cover the other day. Susan had left him outside with the other dogs when I pulled up in front of our house, The Shoe. Suddenly Duke the Creaky, Duke the Limper, Duke Mr. I Can't Get Up came running across the yard like he wasn't a day over 80.

I didn't tell Susan. I'm storing it up, waiting till Duke gets in trouble, then I'll pop it on her and fix him.

More fun: my son Justin came into my office and threw his 14 month old son Henry into my arms. "I gotta run across the road to the barn! He's sleepy, he won't be any trouble."

Quite right, no more trouble than an octopus in heat, and about as handy. He laughed, he pushed my arms with his feet, he tried to type on my keyboard, then he tried to eat it. He grabs anything within six feet.

But he's so cute he can get away with it. I tried to pacify him with some pecans. He chewed them thoughtfully, then saw the glass of water on my desk. "MMMMM!" he said, waving his hand like the British royals wave at photo ops, from the water to himself. Four older brothers & sisters wait on him hand & foot.

I'm caught between a spoiled 114 year old dog and a spoiled 14 month old! I'm at that awkward age, too old to get attention and too young to get sympathy.

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
22-Dec-14 Price Change % Change
Gold, $/oz 1,179.70 -16.20 -1.35%
Silver, $/oz 15.65 -0.34 -2.14%
Gold/Silver Ratio 75.385 0.599 0.80%
Silver/Gold Ratio 0.0133 -0.0001 -0.79%
Platinum 1,181.70 -14.80 -1.24%
Palladium 815.25 10.15 1.26%
S&P 500 2,078.58 7.89 0.38%
Dow 17,959.44 154.64 0.87%
Dow in GOLD $s 314.70 6.94 2.25%
Dow in GOLD oz 15.22 0.34 2.25%
Dow in SILVER oz 1,147.64 34.22 3.07%
US Dollar Index 89.84 0.38 0.42%
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: 1,172.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,204.57 1,213.95 1,213.95
1/2 AE 0.50 603.53 618.70 1,237.41
1/4 AE 0.25 301.76 315.22 1,260.87
1/10 AE 0.10 123.05 128.43 1,284.33
Aust. 100 corona 0.98 1,139.33 1,151.33 1,174.59
British sovereign 0.24 277.76 289.76 1,230.91
French 20 franc 0.19 220.62 223.78 1,198.61
Krugerrand 1.00 1,188.15 1,198.15 1,198.15
Maple Leaf 1.00 1,187.90 1,202.90 1,202.90
1/2 Maple Leaf 0.50 674.42 615.77 1,231.55
1/4 Maple Leaf 0.25 299.09 313.75 1,255.00
1/10 Maple Leaf 0.10 124.33 127.85 1,278.46
Mexican 50 peso 1.21 1,406.98 1,430.98 1,186.84
.9999 bar 1.00 1,177.01 1,188.90 1,188.90
SPOT SILVER: 15.59      
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 11,929.78 12,287.28 17.19
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 17.99 17.99
SPOT PLATINUM: 1,181.70      
Plat. Platypus 1.00 1,206.70 1,246.70 1,246.70
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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.
  • 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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