The Moneychanger
Weekly Commentary
Friday, 13 February a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  6-Feb-15 13-Feb-15 Change % Change
Silver, cents/oz. 1,667.80 1,727.80 60.00 3.6
Gold, dollars/oz. 1,233.90 1,226.50 -7.40 -0.6
Gold/silver ratio 73.984 70.986 -2.997 -4.1
Silver/gold ratio 0.0135 0.0141 0.0006 4.2
Dow in Gold Dollars (DIG$) 298.61 303.70 5.09 1.7
Dow in gold ounces 14.45 14.69 0.25 1.7
Dow in Silver ounces 1,068.73 1,042.91 -25.82 -2.4
Dow Industrials 17,824.29 18,019.35 195.06 1.1
S&P500 2,055.47 2,096.99 41.52 2.0
US dollar index 94.76 94.22 -0.54 -0.6
Platinum 1,223.60 1,210.50 -13.10 -1.1
Palladium 781.60 794.75 13.15 1.7

One liners: "Dear paranoid people who check behind shower curtains for murders. If you find one, what's your plan?"

"You can tell a lot about a woman's mood just by her hands. If they are holding a gun, she's probably angry."

Candide had a field day today. S&P500 hit a new high, gold & silver disagreed for the week, and the dollar index finally broke, it seems.

Markets have been nervous about European-Russian talks about the Ukraine, & about the Greeks scratching for a better deal. Yesterday the talks resulted in a new cease-fire in Ukraine, and it appears the Euros will delay, postpone, meet & meet again until they finally talk the Greek problem to death, or at least keep the bored public from noticing it anymore.

Odd as spitcurls on a toad, the US dollar index didn't change an eyelash. Closed same place it closed yesterday, 92.22. Nothing to brag about, though, as that leaves it below the 20 DMA (94.39) after a failed rally. Two strikes and you're out. Not proof the dollar rally that began in July has ended -- it could still hit 100+ - but a sign it's gonna drop for a correction at least. Dollar would have to close below its 200 day moving average to signal that sort of trend change.

Euro backed off 0.08% to $1.1394 today. That's about as unenthusiastic performance as you might imagine from something that finally scratched together enough gumption to cross its 20 DMA. Until it beats the last high at $1.1500, euro has nothing to talk about.

Yen added 0.29% to 84.18. Broke down this week out of the little uptrend it had started, and has now traded back up to the downtrend line. Either it can't make up its mind or it's going lower.

West Texas Intermediate Crude rose 2.8% to $52.78/barrel, and has a squatty but undeniable rally working. 10 year Treasury yield has risen from 1.65% when February opened to 2.021% today. (When yields rise, bond prices fall.) WHY is what I want to know? What's going on? It's suspicious.

Stocks jubilated & juned today. S&P500 hit a new high. On 29 December 2014 it hit 2,090.57, but today bettered that. Rose 8.15 (0.41%) to 2,096.99. Dow didn't quite keep up. It rose 46.97 (0.26%) & closed 18,019.35. It they keep rising next week they'll see up to two weeks of higher prices & we'll have to read all those headlines about a "new bull market" ad nauseam. Truth is, both indices are locked in broadening top formations (Gator Jaws), & they take an excruciatingly long time to unfold. Could see Dow 18,300 and S&P500 at 2200, yet have I no interest in a market addicted to fiat money creation. I'm an extremist.

I noticed that one Peter Hug, an executive at Canadian gold & silver retailer Kitco, called 25% of gold investors "crazies" (his word) because they fear a collapse of the dollar or financial system. He apparently specializes on gnawing on the hand that feeds him. Interesting that the Internet made Kitco, which was an unknown firm before it got an early website presence. But shucks, them Canadians are bound to know more than a hick from Tennessee. Besides, I don't think the financial & political system is gonna collapse. Now, it might SAG a right smart, like an old rotten hammock, but surely it won't collapse. Last thing I want is some furriner to call me crazy. It'd plumb wreck my self-image.

All unexpected (to a lot of folks in Canada & New York) gold rose $6.40 (0.5%) to $1,226.50 on Comex. Silver rose 3% (50 cents) to 1727.8c.

Look here, y'all, I am clinging on this edge by my fingernails, & they are none too long. Gold closed right at that neckline, and if it was ever intended to turn around, right here's what it would look like. But it didn't close above its 50 DMA ($1,230). I think it would surprise everybody by continuing the uptrend begun with the November low. From here, that's what it's planning, it seems, but it must prove that by closing over that $1,255 October high & 200 DMA, now about the same place. Monday a close over $1,245 would cheer me. A close below $1,215 signals much lower prices.

Silver looked strong as a garlic milkshake today, rising up to its 20 DMA, above the neckline, breaking out through the upper boundary of a falling wedge like a Brahma bull breaking out of a chute. Next move is higher, higher.

On 12 February 182 the Battle of Fort Donelson, Tennessee began. We won't talk about that.

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
13-Feb-15 Price Change % Change
Gold, $/oz 1,226.50 6.40 0.5
Silver, $/oz 17.28 0.50 3.0
Gold/Silver Ratio 70.986 0.350 0.5
Silver/Gold Ratio 0.0141 0.0004 3.0
Platinum 1,210.50 7.00 0.6
Palladium 794.75 20.80 2.7
S&P 500 2,096.99 8.51 0.4
Dow 18,019.35 46.97 0.3
Dow in GOLD $s 303.70 -0.77 -0.3
Dow in GOLD oz 14.69 -0.04 -0.3
Dow in SILVER oz 1,042.91 -28.28 -2.6
US Dollar Index 94.22 0.00 0.0
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: 1,227.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,255.73 1,270.46 1,270.46
1/2 AE 0.50 625.52 650.58 1,301.15
1/4 AE 0.25 315.82 329.89 1,319.56
1/10 AE 0.10 128.78 135.03 1,350.25
Aust. 100 corona 0.98 1,194.77 1,203.77 1,228.09
British sovereign 0.24 291.12 296.12 1,257.95
French 20 franc 0.19 230.89 234.89 1,258.13
Krugerrand 1.00 1,242.23 1,252.23 1,252.23
Maple Leaf 1.00 1,242.50 1,257.50 1,257.50
1/2 Maple Leaf 0.50 705.81 644.44 1,288.88
1/4 Maple Leaf 0.25 313.01 328.36 1,313.43
1/10 Maple Leaf 0.10 130.12 133.80 1,337.98
Mexican 50 peso 1.21 1,470.99 1,481.99 1,229.16
.9999 bar 1.00 1,231.80 1,243.50 1,243.50
SPOT SILVER: 17.26      
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 12,980.83 13,338.33 18.66
US 40% silver 1/2s 0.30 4,898.48 5,048.48 17.11
100 oz .999 bar 100.00 1,715.50 1,775.50 17.76
10 oz .999 bar 10.00 177.55 178.55 17.86
1 oz .999 round 1.00 17.36 17.91 17.91
Am Eagle, 200 oz Min 1.00 18.76 19.61 19.61
SPOT PLATINUM: 1,210.50      
Platinum Platypus 1.00 1,235.50 1,275.50 1,275.50
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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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