The Moneychanger
Weekly Commentary
Friday, 13 March a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  6-Mar-15 13-Mar-15 Change % Change
Silver, cents/oz. 1,578.40 1,547.70 -30.70 -1.9
Gold, dollars/oz. 1,164.10 1,152.60 -11.50 -1.0
Gold/silver ratio 73.752 74.472 0.720 1.0
Silver/gold ratio 0.0136 0.0134 -0.0001 -1.0
Dow in Gold Dollars (DIG$) 317.10 318.33 1.24 0.4
Dow in gold ounces 15.34 15.40 0.06 0.4
Dow in Silver ounces 1,131.32 1,146.82 15.50 1.4
Dow Industrials 17,856.78 17,749.31 -107.47 -0.6
S&P500 2,071.26 2,053.40 -17.86 -0.9
US dollar index 97.67 99.41 1.74 1.8
Platinum 1,159.90 1,159.90 0.00 0.0
Palladium 818.05 818.05 0.00 0.0

For three weeks running stocks have closed lower and are about to close below their 20 week moving average. Silver & gold did no better, managing only to slow their rate of fall this week. Attention hog has been the US dollar index, which may be likeneed unto Grendel's mother winning a beauty contest. Thanks to lunatic central bank policies world wide, even loonier in Europe, Japan, & China than in the US, the globe is running into dollars. If I weren't such a naturally merry soul and a nat'ral born durned fool from Tennessee to boot, I'd wax right gloomy at the outlook for another global financial crisis. But, shucks! Forget that, Mama, & hand me the credit card! We're going out tonight, & we'll worry about the bill tomorrow.

Ttnks to what was most liekly the heroic efforts of the Nice Government Men who are always busy protecting us from ourselves & from freedom, the Dow, down at one point 265, ended the day down only 145.91 or 0.82% at 17,749.31. SP500 lost 12.55 (0.61%) to 2,053.40. Yes, yes, it DOES mean something that both indices, yea, the twosome, stand BELOW their uptrend line from the 2009 low. Both pitifully gave back most of yesterday's gains, and both closed miserably below their 50 day moving averages (DMA). 'Tain't good, & rising volume makes it likely to get worse. If y'all haven't escaped stocks yet, you'd better.

A market proverb says, "Markets take the stairs up, and the elevator down." Ture, & sometimes they take the fireman's pole, just to speed it up.

When a market tries to do the something and fails, it proves the opposite. Durn! That's hardly an English sentence, is it? When a market tries to break out, actually breaks through a trend line, but then falls back, it's a more certain failure.

Yesterday the surge in stocks took the Dow in Gold a little above the top Gator Jaw, but today it failed, & failing, gave it all back. That is a more certain failure than merly trying and failing once, because it is the second time.

DiG shaved off 1.35% to G$316.69 gold dollars (15.32 troy ounces). Indicators suggest it is about to fall like a ripe fig in June.

Dow in silver Fell 1.35% also to S$1,467.30 (1,134.87 troy ounces). It poked into the upper Gator Jaw, & has now dropped away. Heavy, O heavy, doth gravity weigh and tug!

I'm not sure how it will console y'all that stocks are going to drop faster than silver & gold, but it's better than losing on all sides.

US dollar Index didn't rise much today, just 15 basis points (0.15%), but then it didn't need to rise much to scare stock & euro investors. Beginning to look like it will carry to 106, if it doesn't stop at 100-ish. Lots of long tolerated stupidity is fuelling it, & never underestimate how many BTUs stupidity give off.

EMANL -- Euro made a new low. I'm going to start using the initials rather than having to taype that out daily. Lost 1.23% to $1.0496. Yen barely moved, leaving behind 0.09% at 82.37.

WTIC broke down out of the trading range today, down 4.11% to $45/barrell, but itmade a low at $43.58 in January, so might be getting near a low, if the dollar ever stocps rising.

I have nothing to brag on silver & gold about. Silver fell 1.6 cents to 1547.7 on Comex. Gold rose -- what's that? -- fifty whole cents to $1,152.60.

Gold has no short term trend but sideways on the five day chart. Down below it has held support about $1,147, but above failed at $1,165. It is forming a kind of triangle that will break up or town, but not yet. Most encouraging about gold is that it has not tanked in the face of the dollar's brutally relentless rise. More, the gold/ silver ratio acted as it it wanted to break out to the upside, but has since fallen back below the uptrend line. That's tee-tiny, but in gold's favor.

Gold has also held on at the support line acorss the shoulders of that upside-down head and shoulders it formed October - January. And its indicators may be signalling a turn nearby. But every one of these whispers lacks confirmation. Silver & gold have fallen for six of the last seven weeks. Mercy.

On an End of Day chart after 8 down days silver finally turned up (with gold) the last two days. All alone that decline's duration suggests some rally not far away, if only a relief rally.

As I said above, that rapidly rising US dollar is NOT good news for the world economy or the financial system, and may be the safety valve blowing off the boiler. How much might that resemble the 2008 crisis? During that crisis the dollar soared. Gold & silver sank, but stocks sank much faster & further. Physical silver & gold vanished. Delivery times from wholesalers stretched out to two weeks, then four, then eight, and you'd better not get lippy with them or you wouldn't get anything. We got so desperate to help desperate people get gold in their hands we even sold kilo (32.15 ounce) gold bars and 1000 oz silver bars.

The physical market clean decoupled from the paper market. When paper silver was $9.00, physical silver cost $13.50 OR MORE, with an 8-week wait. Premium didn't rise as much on gold, but the delay was the same.

So the quesiton arises, when you get into a knife fight in a bar, how much is it worth to you to already own a knife, rather than waiting until the fight breaks out to buy one? How much is it worth to own silver & gold going into a panic, versus trying to buy it when the panic breaks out.

Besides, there's no guarantee that this time around silver & gold will behave as they did in 2008. A lot of paper money has flowed out of the presses since then. Maybe this time right from the get-go folks say, "I believe I ought to have some gold & silver" & the metals soar along with the dollar while everyrthing else sinks. After all, silver and gold are money, and better money than any paper currency ever made.

But what do I know, just a day-dreaming nat'ral born durned fool from Tennessee! Shucks, Janet Yellen & Super Mario got all this figured out. Hand me my credit card & a jar of that white lightnin'.

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-Mar-15 Price Change % Change
Gold, $/oz 1,152.10 0.50 0.0
Silver, $/oz 15.49 -0.02 -0.1
Gold/Silver Ratio 74.363 0.033 0.0
Silver/Gold Ratio 0.0134 -0.0000 -0.1
Platinum 1,116.20 -21.30 -1.9
Palladium 788.35 -6.75 -0.8
S&P 500 2,053.40 -12.55 -0.6
Dow 17,749.31 -145.91 -0.8
Dow in GOLD $s 318.47 -2.72 -0.8
Dow in GOLD oz 15.41 -0.13 -0.8
Dow in SILVER oz 1,145.63 -8.23 -0.7
US Dollar Index 99.41 0.15 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: 1,153.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,186.21 1,194.29 1,194.29
1/2 AE 0.50 593.74 608.68 1,217.36
1/4 AE 0.25 296.87 310.11 1,240.44
1/10 AE 0.10 121.05 126.35 1,263.52
Aust. 100 corona 0.98 1,122.00 1,131.00 1,153.85
British sovereign 0.24 273.67 278.67 1,183.79
French 20 franc 0.19 217.05 221.05 1,183.98
Krugerrand 1.00 1,168.90 1,178.90 1,178.90
Maple Leaf 1.00 1,161.90 1,178.90 1,178.90
1/2 Maple Leaf 0.50 663.49 605.80 1,211.60
1/4 Maple Leaf 0.25 294.24 308.67 1,234.67
1/10 Maple Leaf 0.10 122.31 125.78 1,257.75
Mexican 50 peso 1.21 1,381.40 1,392.40 1,154.85
.9999 bar 1.00 1,157.94 1,169.90 1,169.90
SPOT SILVER: 15.50      
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 11,833.25 12,190.75 17.05
US 40% silver 1/2s 0.30 4,380.75 4,530.75 15.36
100 oz .999 bar 100.00 1,540.00 1,600.00 16.00
10 oz .999 bar 10.00 160.00 161.00 16.10
1 oz .999 round 1.00 15.60 16.10 16.10
Am Eagle, 200 oz Min 1.00 17.00 17.80 17.80
SPOT PLATINUM: 1,116.20      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 1,131.20 1,161.20 1,161.20
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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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