The Moneychanger
Daily Commentary
Thursday, 19 February a.d. 2015 Browse the commentary archive

The Greeks dropped their demand for a bailout settlement & are headed into another round of [endless] negotiations Friday with Eurozone finance ministers. (Wonder why they call 'em ministers? I bet none of 'em are ordained, & probably not a one goes to church. Like the US Treasury secretary who can't even type or take shorthand. Wow -- cushy Government jobs!)

Looks like the Europeans intend to talk this crisis to death, too. They just keep on droning on & on until finally nobody, not even the media-trained public, will listen any longer.

This latest stock rally is rolling over with another down day today. Dow misplaced 44.08 (0.24%) somewhere while the S&P500 was bereft of 2.23 (0.11%) to roost at 2,097.45.

None of this really tells us anything about longer term direction. For starters, a downturn would have to violate the 20 DMA at 17,713 before anyone would suspect a turn. Yes, it could drop that far tomorrow but 273 points is a large move. Chart now says regardless what happens in the next week, we will see higher prices in the next month.

The Dow in Silver & Dow in Gold charts jiggered a little, but not enough to amount to anything or say aught.

Watching the US dollar index is liable to wear out your cervical vertebrae as bad as a fast tennis match, up, down, up, down. Today it reached up 37 basis points (0.39%) to a 94.49 close. Dollar index has traded out into another even sided triangle, and will break one way or t'other soon, largely.

You'd have thought the news out of Europe about the Greeks backing off their demands would have boosted the euro, but you'd have thought wrong. It fell 0.34% to $1.1357. Barely above its 20 DMA. Working out into a triangle that ought to resolve soon.

Yen mislaid 0.26% to close at 84.03 cents/Y100. Bumping along the bottom of a trading range from 86.30 above & 83 below. Booooring.

Gold snatched back $7.40 (0.62%) of the $8.40 it lost yesterday, ending Comex at $1,207.10. Silver gained 12.1 cents (0.74%) against the 11.2 cents it lost yesterday, & closed Comex at 1637.1 cents.

Technically that completes a 2 day key reversal for gold, but not a very enthusiastic one. Always safe to give those things another day, which would mean a higher close tomorrow. Yet so far gold has bounced off the uptrend line from November. Why is it that the best places to buy are also the places that scare you most?

Silver reached its 50 DMA (1679) today then fainted. Couldn't break out of that falling wedge.

Silver's five day chart shows a double bottom (Tuesday & Wednesday), an attempted rise off that, & a tumble nearly back to that starting point. Needs to jump clean over 1680c.

Gold's five day chart shows a V-bottom yesterday followed by a rise that failed today at $1,223. $1,205 offers support. This will be a bottom IF gold can remain above $1,205.

On 19 February 1807 Former US VP Aaron Burr was arrested in Alabama on charges of plotting to annex Spanish territory in Louisiana and Mexico to establish an independent republic. Although he had conspired against the US, he was acquitted of treason on grounds he had not engaged in any "overt act" required to constitute treason under the constitution.

On 19 February 1881 Kansas became the first state to prohibit all alcoholic beverages, dealing a death blow to its young world class wine-growing region around Wichita.

On 19 February 1906 William Kellogg founded the company that would become Kellogg's Cornflakes. The food faddist Kellogg developed the cereal at first as a health food for psychiatric patients. Y'all ought to watch Anthony Hopkins in the hilarious movie about Kellogg, The Road To Wellville. Not suitable for children, but will make adults laugh.

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
19-Feb-15 Price Change % Change
Gold, $/oz 1,207.10 7.40 0.62%
Silver, $/oz 16.37 0.12 0.74%
Gold/Silver Ratio 73.734 -0.094 -0.13%
Silver/Gold Ratio 0.0136 0.0000 0.13%
Platinum 1,175.80 5.60 0.48%
Palladium 787.10 10.20 1.31%
S&P 500 2,097.45 -2.23 -0.11%
Dow 17,985.77 -44.00 -0.24%
Dow in GOLD $s 308.01 -2.66 -0.86%
Dow in GOLD oz 14.90 -0.13 -0.86%
Dow in SILVER oz 1,098.64 -10.89 -0.98%
US Dollar Index 94.49 0.37 0.39%
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SPOT GOLD: 1,208.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,238.41 1,250.49 1,250.49
1/2 AE 0.50 615.67 640.35 1,280.69
1/4 AE 0.25 310.85 324.70 1,298.82
1/10 AE 0.10 126.76 132.90 1,329.02
Aust. 100 corona 0.98 1,175.99 1,184.99 1,208.92
British sovereign 0.24 286.54 291.54 1,238.50
French 20 franc 0.19 227.26 231.26 1,238.69
Krugerrand 1.00 1,222.70 1,232.70 1,232.70
Maple Leaf 1.00 1,223.20 1,238.20 1,238.20
1/2 Maple Leaf 0.50 694.72 634.31 1,268.61
1/4 Maple Leaf 0.25 308.09 323.19 1,292.77
1/10 Maple Leaf 0.10 128.07 131.69 1,316.94
Mexican 50 peso 1.21 1,446.41 1,457.41 1,208.77
.9999 bar 1.00 1,212.43 1,224.20 1,224.20
SPOT SILVER: 16.37      
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 12,419.55 12,777.05 17.87
US 40% silver 1/2s 0.30 4,637.40 4,787.40 16.23
100 oz .999 bar 100.00 1,627.00 1,687.00 16.87
10 oz .999 bar 10.00 168.70 169.70 16.97
1 oz .999 round 1.00 16.47 17.02 17.02
Am Eagle, 200 oz Min 1.00 17.87 18.72 18.72
SPOT PLATINUM: 1,175.80      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,200.80 1,240.80 1,240.80
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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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