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

Before we leave the subject of weird charts distorted by criminal central bank shenanigans, y'all go look at the US dollar index chart from yesterday. Looks like an EKG of somebody's heart stopping: http://scharts.co/1HEYhF1

Friends, this ain't normal, none of it. Nature has better manners.

Dollar index was right active today, too. It opened above its 20 DMA (97.13) and climbed as high as 99.76. Ended up at 99.58, gaining a hefty 80 basis points (0.81%). All the same, for the present at least the FOMC's announcement yesterday broke the dollars climb.

Come to think of it, after what the Swiss Central Bank did to traders in January, and the Fed yesterday, I don't know why anybody would have nerve enough to trade currencies. 'Tain't that much fun.

If I was the euro I'd be checking to see if my burial insurance was paid up. It jumped up to close yesterday about $1.0800 and even touched its 20 DMA & the downtrend line, but today it is -- literally -- right back where it was before the party began. Lost 2.10% today & ended at $1.0639. That says to me that the market does NOT believe the euro is worth this high rate any more than it believes the dollar deserves its "low" rate. That's not what I believe, now, cause I believe that both of 'em ought to be hanged, drawn, and quartered & their body parts hung on the city gate to rot as a warning to others. The market, however, which has the attention span of alone fruit-fly in a roomful of rotten bananas, does believe the euro's too high & the dollar too low. (I have not yet decided yet but am pondering whether the central bankers ought to get the same treatment as their respective currencies.)

Yen fell 0.71% to 82.71, still near the bottom of that range it has habituated since December, from 82.2 to 86.3. Hardly any life there.

Stocks lost their mojo today. Watching today's stock market coming off yesterday's FOMC fix reminds me why I don't do heroin -- too hard coming down.

Dow gave back 117.16 (0.65%) to dip beneath 18,000 again: 17,959.03. S&P500 puked back 10.23 (0.49%) to 2,089.27. Today ain't fatal but it's none too inspiring, either.

Whooo-eee! Look at that Dow in Silver! Fell like a one-winged albatross from the top gator jaw through the 20 DMA. Ended at S$1,440.97 silver dollars (1,114.5 troy ounces), down 2.03% and below the 20 DMA at S$1,453.87 (1,124.48 oz).

Dow in Gold fell but not as sharply, only 1% to G$317.11 gold dollars (15.34 oz). Closed barely above the upper gator jaw, but promises to fall further tomorrow. Every day's like Christmas Eve, just waitin' for good things to come.

We need to view these metals' closes not from the perspective of where they closed on Comex yesterday but in the aftermarket. After all, Comex closed before the FOMC announcement caused everybody's scalp to blow off.

Gold closed Comex up $17.70 (1.5%) at $1,169.10, but was about even with yesterday's late trading. In other words, it didn't really make any new headway today, but did hold its own against a dollar up 80 basis points.

Silver closed Comex up 3.75 or 57.3 cents at 1609.8c. That's about 3 cents higher than yesterday's aftermarket.

So when it's all said & done, what did we gain out of all the razzle-dazzle? Gold pushed up to its top trading channel line and near its 20 DMA. It is positioned to break out. You can see that on this chart, http://scharts.co/1Gfi8tl All the indicators I regularly watch have turned up, arguing the next move will be toward the treetops. Yet remember, dear friends, gold's overall trend is down so it must prove itself like an old convict on a new job. Must best that last high at $1,223, then the $1,308 high where it failed in January.

Daily chart shows that gold held with a V-bottom at $1,160, which was good. Sets the stage for a rise tomorrow.

Silver's 5 day chart just chirps good things. It corrected & made a low at 1585c, then climbed again like a Sherpa on Mt. Everest. On a longer term chart it did, in fact, break out & close above the upper boundary of that long-building falling wedge. I want to see a strong day with another 60 cent or more move and a close above 1700c. But that will require silver to come bursting out of that wedge tomorrow and closing the week with a big show. Here's a chart http://scharts.co/1Gfid07

I somehow failed to refresh the gold/silver ratio chart yesterday. Y'all need to take a look at it because it is SHOUTING a powerful message. http://scharts.co/1Fq4lmt

It shows an upward breakout with this recent gold & silver weakness, BUT the breakout FAILED. Now it has not only turned down but obligingly closed today well below its 20 & 50 day moving averages, turning momentum down. In fact, all indicators point down. That falling ratio whispers, "There's something y'all aren't seeing that intends to pull silver & gold higher." That's what a falling ratio means, higher silver & gold prices.

And by the way, platinum and palladium recovered sharply yesterday, too.

On 19 March 1644 the Chongzhen Emperor, facing overthrow of the Ming dynasty by internal rebellion and the approaching Manchu army, committed suicide. Upon his death dozens of loyal high level officials and over 700 imperial house hold scholars killed themselves, as well as 300 imperial maids.

He was the last Ming dynasty emperor & the Qing or Manchu dynasty succeeded him shortly. All this happened about the same time that the reign of paper money began in China and an unvarying SILVER standard was instituted which lasted until 1912. If I had Ralph Foster's excellent history of fiat money with me I could look it up, but I am virtually positive that the Chinese silver standard began about that time, after paper money had tortured the Chinese for centuries.

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-Mar-15 Price Change % Change
Gold, $/oz 1,169.10 17.70 1.54%
Silver, $/oz 16.10 0.57 3.69%
Gold/Silver Ratio 72.624 -1.540 -2.08%
Silver/Gold Ratio 0.0138 0.0003 2.12%
Platinum 1,120.80 27.20 2.49%
Palladium 765.45 1.45 0.19%
S&P 500 2,089.27 -10.23 -0.49%
Dow 17,959.03 117.16 0.66%
Dow in GOLD $s 317.55 -2.78 -0.87%
Dow in GOLD oz 15.36 -0.13 -0.87%
Dow in SILVER oz 1,115.61 -33.63 -2.93%
US Dollar Index 99.58 0.80 0.81%
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: 1,170.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,203.93 1,210.95 1,210.95
1/2 AE 0.50 602.04 617.18 1,234.35
1/4 AE 0.25 301.02 314.44 1,257.75
1/10 AE 0.10 122.75 128.12 1,281.15
Aust. 100 corona 0.98 1,137.66 1,146.66 1,169.82
British sovereign 0.24 277.48 282.48 1,200.02
French 20 franc 0.19 220.08 224.08 1,200.20
Krugerrand 1.00 1,186.38 1,196.38 1,196.38
Maple Leaf 1.00 1,178.00 1,195.00 1,195.00
1/2 Maple Leaf 0.50 672.75 614.25 1,228.50
1/4 Maple Leaf 0.25 298.35 312.98 1,251.90
1/10 Maple Leaf 0.10 124.02 127.53 1,275.30
Mexican 50 peso 1.21 1,400.68 1,411.68 1,170.84
.9999 bar 1.00 1,174.10 1,186.00 1,186.00
SPOT SILVER: 16.09      
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 12,362.35 12,719.85 17.79
US 40% silver 1/2s 0.30 4,554.80 4,704.80 15.95
100 oz .999 bar 100.00 1,599.00 1,659.00 16.59
10 oz .999 bar 10.00 165.90 166.90 16.69
1 oz .999 round 1.00 16.19 16.69 16.69
Am Eagle, 200 oz Min 1.00 17.59 18.39 18.39
SPOT PLATINUM: 1,120.80      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,135.80 1,165.80 1,165.80
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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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