The Moneychanger
Weekly Commentary
Friday, 30 January a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  23-Jan-15 30-Jan-15 Change % Change
Silver, cents/oz. 1,828.40 1,719.20 -109.20 -6.0
Gold, dollars/oz. 1,292.60 1,278.50 -14.10 -1.1
Gold/silver ratio 70.696 74.366 3.670 5.2
Silver/gold ratio 0.0141 0.0134 -0.0007 -4.9
Dow in Gold Dollars (DIG$) 282.63 277.54 -5.09 -1.8
Dow in gold ounces 13.67 13.43 -0.25 -1.8
Dow in Silver ounces 966.56 998.43 31.87 3.3
Dow Industrials 17,672.60 17,164.95 -507.65 -2.9
S&P500 2,051.82 1,994.99 -56.83 -2.8
US dollar index 95.24 94.96 -0.28 -0.3
Platinum 1,268.00 1,239.20 -28.80 -2.3
Palladium 775.40 772.70 -2.70 -0.3

I reckon the bottom rail's up on the top now, or moving close to it. Bears hit silver & gold wth everything they had plus halitosis & couldn't break 'em. Stocks had one up day of 225 points up and you'da thought the Last Trump had blown the way the media played it up. Good thing Dow did rise that one day, or it would have lost not the 507.65 points it did lose this week, but 706.73. US dollar index is wavering & juberous (Southern for "dubious.") I bet y'all didn't believe me when I opined yesterday that we were seeing the gold correction low. Way-ull, I don't blame y'all. I ain't nothing more'n a nat'ral born durned fool from Tennessee. No way I could be right and all them newspapers & websites & sintrul bank peacocks wrong.

US dollar index, seems to me, is ailing -- not lying down sick yet, but just got a runny nose. Now y'all listen to what I'm saying. What has been driving the US dollar? Gazillions of hot money following a trend. Y'all know trend followers have all the loyalty of a brindle cat, right? Soon as they smell blood, they'll belong gone. Other than the little interest rate differential on the dollar's side, that hot money's been all it had going for it. Now it built a little tower top beginning last Friday, and has traced out a little even-sided triangle -- blowing hot & cold out of both sides of its mouth, cause those triangles can break either way. Suppose it cracks, & all them hot money jockeys start remembering 15 January and the Swiss Franc? Might set 'em to running like a scalded dog out of that dollar. That Humpty Dumpty won't be nothing like the scrambled mess a falling dollar'd leave behind.

US dollar index rose two (count 'em, two) basis points today to 94.96. Chart:

Euro fell 0.32% to $1.1285. Mercy, if this is making a bottom crows could learn to knit with their beaks. Yen has backed itself clean into the nose cone of an even-sided triangle & is above its 50 & 20 DMAs. Could surprise everybody & rally. Gained 0.61 to 85.07c/Y100.

West Texas Intermediate Crude rose 8.19% today & closed above its 20 DMA. Looks like that was a little double bottom after all. My, wouldn't a sudden rise in oil catch them trend followers looking t'other way?

Stocks -- well, it just don't seem gentlemanly to pick on 'em after such a sorry week, like kicking a man when he's down, but if you want to win now, hardly anything'll take the fight out of a man like a hard kick to the short ribs when he's down. Cleaner than gouging eyes.

Dow today lost 251.9 (1.45%) to 17,164.95, breathing hard down the neck of that December low again (17,067). S&P500 lost only 1.3% (26.26), but looky there! It closed below 2,000 at 1,994.99. That's got to be plumb demoralizing to them fine & shiny Wall Street folks.

Now lets take another look at this Dow chart, and that S&P500 chart,

Dow made an even sided triangle & fell out of it this week, traded back into it yesterday, but closed broke down again today. It's just above the 200 day moving average (17,062) & the December low. That heavy red line is the uptrend line from the March 2009 low, & yes, the Dow is and has been for a long time below that line. Next move should be earthward.

S&P500 didn't quite make the same triangle formation, more like a falling triangle, but it could also be a falling wedge. 200 DMA is at 1974.61, December low at 1972.56. Any break of those milestones would break the S&P500.

Now y'all know that a FAILED turnaround is the worst sort of news, because it confirms the trend. Thus the Dow in metals yesterday rose smartly while somebody whacked metals & somebody else bought S&P500 futures to run up stocks (No, I don't ever name e'er a soul, & y'all didn't hear me say, "Nice Government Men," either. I didn't even say "white Plymouth" or "suits" or "sunglasses" any other euphemism.) The Point: Dow in metals lost everything or more today that they had gained yesterday.

Dow in Gold lost 3.37% to close at G$276.38 gold dollars (13.37 troy ounces), once again comfortably below its 200 Day moving average & below the uptrend from August 2013. And it's fallen out of the Gator's Jaws formation. Land's sake, unless those stocks fool us all & turn suddenly up, the Dow in Gold is going to sink out of sight.

On silver's sudden weakness yesterday the Dow in silver jumped all the way up to its 20 DMA & back inside the Gator Jaws. Wiped about half of that out today & closed at S$1,286.18 silver dollars (994.78 oz), down 3.22%. Near to falling through the 200 DMA.

Confirmations keep piling up that the trend of stocks versus silver & gold has turned DOWN & the price trend for silver & gold has turned UP. Pile up the good news.

I am stuffing rags in my mouth trying to keep from crowing. It's hard to write, though, over a mouthful of rags, so I'm going to take the rags out & I promise I won't say anything about calling that gold bottom yesterday. I hate it when people say I told you so.

Today silver rose 43.4 cents (2.59%) to close Comex at 1719.2c. That gold jumped up $23.90 (1.9%) to $1,278.50. Added another five bucks in the aftermarket.

On the weekly chart silver has risen through its 20 Week moving average & is on the verge of piercing the downtrend line from the October 2012 high. Gold's weekly shows it ABOVE the downtrend from the October 2012 high & above its 20 week MA. Pile up the good news.

Monthly chart shows at that last low cut into the uptrend line from 2001, but now rests comfortably above it. Silver seconds that.

On the gold daily chart the 20 DMA is about to cross above the 200 DMA, showing the strength of upward momentum. Yesterday's attack took gold into its 200 DMA but not below it, then today it bounced right back up. We may not come out of this correction for another week, but I believe we have seen the price low. Chart:

Silver's daily chart shows a fall yesterday to the uptrend line from that diamond reversal formed in November & December. Closed back above the 20 DMA today. Healthy as a hog on slop, & this week's correction only made it healthier.

I would be buying silver & gold.

I'm often bemused by folks' behavior. If you had looked at my special offer in yesterday's commentary (see again here, ) this morning, you'd have realized you could have bought gold for about $24 UNDER spot. And you know, there are still a few of those specials left, at the same price I published 'em yesterday.

I know it'll reinforce every Tennessee stereotype y'all have, but just for fun here are two songs by Old Crow Medicine Show on YouTube," Tennessee Bound" at and "The Warden" at Shucks, if you just want to have more fun that you can stand, listen to "Eight dogs & 8 Banjos," Mama'll be yelling at you, "Turn that thing up and git up hyere & dance with me!"

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
30-Jan-15 Price Change % Change
Gold, $/oz 1,278.50 23.90 1.9
Silver, $/oz 17.19 0.43 2.6
Gold/Silver Ratio 74.366 1.372 1.9
Silver/Gold Ratio 0.0134 0.0003 2.6
Platinum 1,639.20 22.40 1.4
Palladium 772.70 -0.20 -0.0
S&P 500 1,994.99 -26.26 -1.3
Dow 17,164.95 -251.90 -1.4
Dow in GOLD $s 277.54 -9.41 -3.3
Dow in GOLD oz 13.43 -0.46 -3.3
Dow in SILVER oz 998.43 -40.89 -3.9
US Dollar Index 94.94 0.18 0.2
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: 1,283.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,314.30 1,328.42 1,328.42
1/2 AE 0.50 654.08 680.26 1,360.51
1/4 AE 0.25 330.24 344.94 1,379.76
1/10 AE 0.10 134.66 141.19 1,411.85
Aust. 100 corona 0.98 1,249.28 1,258.28 1,283.70
British sovereign 0.24 304.40 309.40 1,314.37
French 20 franc 0.19 241.43 245.43 1,314.55
Krugerrand 1.00 1,296.34 1,306.34 1,306.34
Maple Leaf 1.00 1,298.50 1,313.50 1,313.50
1/2 Maple Leaf 0.50 738.01 673.84 1,347.68
1/4 Maple Leaf 0.25 327.29 343.34 1,373.35
1/10 Maple Leaf 0.10 136.05 139.90 1,399.02
Mexican 50 peso 1.21 1,535.01 1,546.01 1,282.25
.9999 bar 1.00 1,287.99 1,299.50 1,299.50
SPOT SILVER: 17.24      
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 13,077.35 13,434.85 18.79
US 40% silver 1/2s 0.30 4,894.05 5,044.05 17.10
100 oz .999 bar 100.00 1,714.00 1,774.00 17.74
10 oz .999 bar 10.00 177.40 178.40 17.84
1 oz .999 round 1.00 17.34 17.89 17.89
Am Eagle, 200 oz Min 1.00 18.74 19.59 19.59
SPOT PLATINUM: 1,639.20      
Platinum Platypus 1.00 1,664.20 1,704.20 1,704.20
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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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