The Moneychanger
Daily Commentary
Monday, 23 February a.d. 2015 Browse the commentary archive

A couple of days iced in is a treat. A week iced in threatens to deplete my firewood stores & my patience. It started sleeting and freezing again last night, but melted off early today. Shucks, I might as well live in Michigan. I am so thankful for global warming: without it, we'd be froze clean solid.

The bogus tug of war between Greece and the EU continues, but everybody assumes that after talking things to death, some deal will be struck that takes the euro out of harm's way. Jes' seems like nothin' atall goes bad in this perfect world no more, not since our wonderful rulers seized control of the world economy. All they have to do is crank up the computers & issue another trillion euros or dollars or zlotys & smiles break out all 'round.

Hey, wait a minute --- what's that I just tripped over? Barbed wire? What's that for?

It's been since late 2007 that the Dow Jones STOXX European 600 index has closed at 385.08, today's close. I swan, it don't get no better than this. But look a little closer and suspicions begin to sprout like toadstools. STOXX has traded up into a scary rising wedge. It's jes' astounding what QE can do. Chart's here,

On the New York side of the Atlantic where the destinies of nations Our Rulers don't like very much are decided, stocks closed the day with mixed results. After Friday's new high, the Dow slipped 23.6 (0.13%) to 18,116.84. S&P500 scraped off 0.64 (0.03%) to 2,109.66. Other indices rose slightly.

With all the free money the carry trade can carry, stocks are bound to move higher. Dow would have to close below 17,850, then 17,750 to gainsay that expectation.

It appears the Dow in Gold and Dow in Silver will travel all the way to the top Gator Jaw before they turn around. Dow in Gold edged up(15.09 troy ounces) 0.08% to G$311.94 (15.09 oz). Dow in silver looks the same as gold. It did drop 0.25% today to S$1,441.11 silver dollars (1,114.61 troy oz).

US dollar index was blowing and going out of the weekend, & hit a 95.48 high at 6:00 a.m. New York time. Caught a stomach virus about that time and commenced regurgitating all those gains, plumb down to nearly where it started, 94.45. Just tucked tail and slunk off the rest of the day, ending up 25 basis points (0.26%) at 94.68.

Since January's high US dollar index has built a long, narrow even-sided triangle. It should be ready for a correction, but won't break. Any close below 93.40 (last low) would send it much lower. Any close above 95.23 would send it skittering higher.

Bruited settlement of the Greek crisis brought the euro no joy today. Quite the contrary: it closed down 0.39% at $1.1335, below its 20 DMA at $1.1357. Nobody wants euros?

Yen is trading like an EKG on a corpse -- straight line. Waxed 0.14% greater today with a close at 84.16 and a tiny range. No interest.

Silver & gold behaved opposite to the dollar index today, reaching their lows about 5:00 a.m. NY time, then peaking about noon. I reckon speculators thought a Greek deal would send silver & gold down, but when no deal showed up they backed out of their positions.

On Comex gold declined $4.10 to $1,200.30. Silver dipped 1.6 cents to 1624.7c.

Silver ranged from 1607c to 1629 cents, but closed only a couple of cents higher than its open. Once again in the nose cone of that falling wedge and below its moving averages. Hard to believe silver does not plan to show lower prices. A closed below 1600c sends it tumbling but a close above 1700 sends it for a balloon ride.

Gold peaked through the uptrend line from the November bottom, not an encouraging harbinger. It tested the floor today at $1,190.60. If it finds itself much lower than that, it may mean a trap door has opened beneath it. Only a close above $1,210 would turn gold around short term.

Only witness testifying in favour of silver & gold is the Gold/Silver ratio, which appears to have completed a diamond reversal.

Y'all hear that giant vacuum cleaner? That's stock markets sucking up all the investment money & interest in the world.

No commentary tomorrow because I will be finishing my monthly paid subscription Moneychanger. Wednesday I have to travel with my son to Kentucky to pick up two sows, yes, sows, Hereford sows. I hope I'll get back in time to send y'all a commentary, but may not.

On 23 February 1836 the Mexican General Santa Anna besieged the Alamo in San Antonio. It would fall on 6 March 1836, costing the lives of all the defenders. They knew, however, when they stayed that their loyalty would probably cost them their lives. They also knew that their delaying Santa Anna would give the rest of the Texicans time to prepare to meet him. And they did, on 21 April 1836 at San Jacinto, where they destroyed Santa Anna's army. Hard to imagine men doing that today, but I reckon there are a few.

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
23-Feb-15 Price Change % Change
Gold, $/oz 1,200.30 -4.10 -0.34%
Silver, $/oz 16.25 -0.02 -0.10%
Gold/Silver Ratio 73.878 -0.179 -0.24%
Silver/Gold Ratio 0.0135 0.0000 0.24%
Platinum 1,166.30 -6.60 -0.56%
Palladium 785.95 6.75 0.87%
S&P 500 2,109.66 -0.64 -0.03%
Dow 18,116.84 -23.60 -0.13%
Dow in GOLD $s 312.01 0.66 0.21%
Dow in GOLD oz 15.09 0.03 0.21%
Dow in SILVER oz 1,115.09 -0.35 -0.03%
US Dollar Index 94.68 0.25 0.26%
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: 1,201.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,232.74 1,243.55 1,243.55
1/2 AE 0.50 618.26 633.79 1,267.58
1/4 AE 0.25 309.13 322.90 1,291.61
1/10 AE 0.10 126.05 131.56 1,315.64
Aust. 100 corona 0.98 1,169.47 1,181.47 1,205.33
British sovereign 0.24 284.53 296.53 1,259.69
French 20 franc 0.19 226.00 229.12 1,227.21
Krugerrand 1.00 1,215.92 1,225.92 1,225.92
Maple Leaf 1.00 1,209.50 1,226.50 1,226.50
1/2 Maple Leaf 0.50 690.86 630.79 1,261.58
1/4 Maple Leaf 0.25 306.38 321.40 1,285.61
1/10 Maple Leaf 0.10 127.36 130.96 1,309.64
Mexican 50 peso 1.21 1,438.39 1,462.39 1,212.90
.9999 bar 1.00 1,205.71 1,217.50 1,217.50
SPOT SILVER: 16.28      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 24.00 27.00 35.29
VG+ Peace dollar 0.77 19.00 22.50 29.41
90% silver coin bags 0.72 12,351.63 12,709.13 17.78
US 40% silver 1/2s 0.30 4,609.38 4,759.38 16.13
100 oz .999 bar 100.00 1,617.50 1,677.50 16.78
10 oz .999 bar 10.00 167.75 168.75 16.88
1 oz .999 round 1.00 16.38 16.88 16.88
Am Eagle, 200 oz Min 1.00 18.03 19.28 19.28
SPOT PLATINUM: 1,166.30      
Plat. Platypus 1.00 1,191.30 1,231.30 1,231.30
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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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