The Moneychanger
Daily Commentary
Wednesday, 28 January a.d. 2015 Browse the commentary archive

Janet Yellen came down like the wolf on the fold,

Her FOMC gleaming without silver or gold.

She opened her mouth but no wisdom came forth

Just more blowing wind like a gust from the north

More gassy nonsense, framed but to obscure

Their cluelessness still with more bovine ordure.

My language, 'tis strident, 'tis harsh to the core

For reason & truth are fall'n down to the floor

Ma Yellen & her toadies kick 'em fierce in th'head

And leave them a-bleeding and 'most nearly dead.

But truth has a way of avenging itself,

Redeeming from rascals all ill-gotten pelf,

Returning in bear markets gains and all money

The foolish had won under policies looney.

For in bear markets truth rises up from the floor

Money restoring to rightful owners once more.

(The end, with apologies to Lord Byron).

Another mouse burp FOMC announcement. More quasi-profound interpretation from more folks who never heard that it's better to keep your mouth shut and be assumed a fool than to open your mouth & remove all doubt.

Fed's non-action helped stocks not at all. Dow dropped 163.34 (0.94%) to 17,223.87. The S&P500, which has been marginally outperforming the Dow, lost more today, 24.61 or 1.21% to 2,004.94.

Getting technical, both the Dow & the S&P500 had built since December even-sided triangles. Today, both punched through the bottoms thereof. Other indicators I watch have turned negative, and volume rose briskly today, confirming the downwardness should abide.

Dow in gold has progressed & consistently confirmed its downside breakdown from the Gator Jaws pattern. Today the DiG lost 0.65% to close at G$276.38 gold dollars (13.37 troy ounces). This takes it below both the 200 day moving average (G$281.55 or 13.62 oz.) and the uptrend line from August 2013. No whisper of a turnaround.

Dow in Silver has not unfolded as much as the Dow in Gold, but sank another 1.28% today to $1,228.84 (950.43 oz). It rests right on the top channel line it threw over in September when silver was tanking. 200 DMA awaiteth at at $1,208.95 (935.05 oz).

Day after day piles up confirmation that the trend of stocks against silver & gold has turned down, and the price trend for silver & gold up.

US dollar index rose 50 basis points today (0.54%)at 94.76, but after falling 98 basis points yesterday. It has been left behind a toppy tower on the chart. Dollar may have seen it's highs. Too early to say., but a close below 94 would be a hint.

Just to keep in the back of y'all's minds, Euro's last low posted on 23 January its intraday low for the move at $1.11.66 & closed at $1.1266. Ended today down 81% from yesterday at $1.1287.

Yen keeps stumbling & bumbling in an uptrend, & hath formed an even- sided triangle. Above the 20 & 50 DMA's, presently intertwined. Set to climb.

West Texas Intermediate Crude Oil lost 3.06% to $44.38/bbl. Intraday low at $44.08 made a double bottom today with 13 January's $44.20. Not exciting but may be working on some kind of bottom.

Odd: silver closed unchanged at 1806.8. Gold lost 5.80 to $1,285.90. Odd.

Gold simply continued the decline begun yesterday, which in fact began with the top on the 22nd. Day before yesterday was probably not the bottom of the correction, but I don't expect it to go much further anyway, maybe as low as $1,255 - $1,260 support, maybe no lower than $1,270.00. Why do I think that? Because gold is in a power-move up to $1,350, and corrections in the middle of a power move usually are shallow. Heaven knows, I can be wrong, since I am no more than a nat'ral born durned fool from Tennessee.

Silver closed unchanged. Flatlined most of the day in a range from 1817c to 1794c. Little movement, little enthusiasm. Yesterday it fell as low as 1741c, which was near the neckline and near the 20 dma (1709c). Might fall clean to that 20 DMA. Don't want to see it fall below the neckline.

Really I'm worrying about unprofitable nickels and dimes. Not enough distance here to wait for. Silver bought at 1800c and gold bought at $1,285 will look dirt cheap a year from now.

On 28 January 1547 at age 9 Edward VI succeed his father Henry VIII as king of England.

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
28-Jan-15 Price Change % Change
Gold, $/oz 1,285.90 5.80 0.45%
Silver, $/oz 18.07 0.00 0.00%
Gold/Silver Ratio 71.170 0.321 0.45%
Silver/Gold Ratio 0.0141 -0.0001 -0.45%
Platinum 1,257.60 -8.70 -0.69%
Palladium 797.60 15.55 1.99%
S&P 500 2,004.94 -24.60 -1.21%
Dow 17,223.87 -163.34 -0.94%
Dow in GOLD $s 276.89 -3.89 -1.39%
Dow in GOLD oz 13.39 -0.19 -1.39%
Dow in SILVER oz 953.28 -9.04 -0.94%
US Dollar Index 94.76 0.50 0.53%
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SPOT GOLD: 1,288.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,313.96 1,333.29 1,333.29
1/2 AE 0.50 656.47 682.75 1,365.49
1/4 AE 0.25 331.45 346.20 1,384.82
1/10 AE 0.10 135.16 141.70 1,417.02
Aust. 100 corona 0.98 1,253.85 1,262.85 1,288.36
British sovereign 0.24 305.52 310.52 1,319.10
French 20 franc 0.19 242.31 246.31 1,319.29
Krugerrand 1.00 1,301.08 1,311.08 1,311.08
Maple Leaf 1.00 1,303.20 1,318.20 1,318.20
1/2 Maple Leaf 0.50 740.72 676.31 1,352.61
1/4 Maple Leaf 0.25 328.49 344.59 1,378.37
1/10 Maple Leaf 0.10 136.55 140.41 1,404.14
Mexican 50 peso 1.21 1,542.18 1,553.18 1,288.20
.9999 bar 1.00 1,292.71 1,304.20 1,304.20
SPOT SILVER: 18.11      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 23.00 26.00 33.99
VG+ Peace dollar 0.77 19.00 22.00 28.76
90% silver coin bags 0.72 13,699.40 14,056.90 19.66
US 40% silver 1/2s 0.30 5,150.70 5,300.70 17.97
100 oz .999 bar 100.00 1,801.00 1,861.00 18.61
10 oz .999 bar 10.00 186.10 187.10 18.71
1 oz .999 round 1.00 18.21 18.76 18.76
Am Eagle, 200 oz Min 1.00 19.61 20.46 20.46
SPOT PLATINUM: 1,257.60      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,282.60 1,322.60 1,322.60
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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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