The Moneychanger
Weekly Commentary
Friday, 20 March a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  13-Mar-15 20-Mar-15 Change % Change
Silver, cents/oz. 1,547.70 1,686.70 139.00 9.0
Gold, dollars/oz. 1,152.60 1,184.80 32.20 2.8
Gold/silver ratio 74.472 70.244 -4.228 -5.7
Silver/gold ratio 0.0134 0.0142 0.0008 6.0
Dow in Gold Dollars (DIG$) 318.33 316.28 -2.05 -0.6
Dow in gold ounces 15.40 15.30 -0.10 -0.6
Dow in Silver ounces 1,146.82 1,074.74 -72.08 -6.3
Dow Industrials 17,749.31 18,127.65 378.34 2.1
S&P500 2,053.40 2,108.10 54.70 2.7
US dollar index 99.41 98.14 -1.27 -1.3
Platinum 1,162.20 1,142.20 -20.00 -1.7
Palladium 788.35 778.76 -9.59 -1.2

Today for the first day I noticed the grass is GREEN. I don't mean simply green, I mean that eye-smarting kelly green that screams Spring! I am so glad. So are the cows.

Gold & silver turned glad this week, too. Silver flew up an astounding 9%, gold gained a more staid 2.8%. Gold/Silver ratio was the surprise, closing the week 5.7% lower and promising much better things. Volatility took stocks by the scruff of their Armani-ed neck this week & shook 'em like a terrier shakes a rat, but they ended the week higher. Platinum & Palladium are almost up to even, but that is a huge improvement over where they were earlier in the week. Dollar finally broke, ending 1.3% lower this week.

'Twas a jagged week for stocks. Up 228, down 128, up 227, down 117, & today up 168.62 (0.94%) for a Dow close at 18,127.65. S&P500 today ran up 18.83 (0.9%) to 2,108.10. Dow's on the wing, S&P's on a tear, Janet's on the throne, all's right in the world.

Internally that carried both indices up above their 20 DMAs & turns momentum up. Volume was huge today, suggesting stocks will move higher.

Ahh, but what do the Dow in Gold & Dow in Silver tell us?

Dow in Gold dropped 0.26% today to G$316.28 gold dollars (15.30 troy oz), and has fallen all the way back to the topside of the upper gator jaw. floats a mere G$14.47 (0.7 ounce0 above the 20 DMA and appears minded to roll over toward earth. Other indicators agree with that.

O SPECTACULAR Dow in Silver! Thou hast sunk like a fat frog in a deep well!

Dow in silver lost S$39.96 silver dollars or 2.77% today (30.91 oz) & ended the day at S$1,401.37 (1,083.87 oz). Looks like free fall. Dow in Gold will no doubt follow. With stocks rising strongly today, silver is signaling she is ready to fight and about had a gut-full of stocks. Next milestone is at the 50 DMA (S$1,380.68 or 1,067.87 oz).

Remember, remember, the Dow in Gold & Dow in Silver are our key indicators to the future of stocks & of metals. Down is good, downer is better.

US dollar index weakened all on its own today. More that I think about it, more I believe the Fed's resolve to do nothing in the face of a strong dollar finally broke, and we heard that SNAP! At the FOMC meeting this week. That doesn't mean we've seen the end of dollar strength, other than for a passing while.

Dollar index lost a huge 145 basis points (1.46%) to close at 98.14. Friends, hear me say this: straight up comes straight down. Tears, weeping, wailing, & gnashing of teeth ALWAYS follow a hyperbolic or straight up ride in a market. And when it's going straight up your traitorous heart will always yearn toward it like a rusty old Chevy to a junkyard magnet, but don't ever listen.

The mongrel, scrofulous, scabrous euro actually rose 1.58% today & almost reached its downtrend line. Maybe it will rally after all. Indicators are turning up, but Mercy! Who would buy that nasty thing?

Yen lifted 0.55% to 82.59, but indicates no gumption a-tall. Did close above the 20 DMA, but remains in the bottom of that four month range.

Looky here! That gold rose $15.70 (1.36%) today to $1,184.80, and silver beat it. Rose 76.9 cents or 5.02% to 1686.7c. Mercy!

I read some feller on the internet yesterday who said he wanted "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 & closing the week with a big show."

Silver must have been a-listening, because it shot up out of that wedge & closed plumb at the top of its range, clean above the neckline we've been watching so long. Also closed above the 50 DMA & left the 20 DMA behind yesterday. Indicators are going NUTS, needles pegged all the way over into the red "BUY THAT STUFF NOW!" part of the dial.

Today's breakout was your signal. If you didn't hear it, you ain't listening.

What about gold? It, too, broke out of its downward trading channel that has ruled gold since the January $1,308 high.

Other buy signals we got earlier: a touch into the 3-standard deviation Bollinger Band and a slide down the 2 Bollinger Band & another touch Monday (2 std deviation BB shown on chart). Gold also closed above its 20 DMA. Now it must clear that resistance that stretches from $1,190 to $1,225. Indicators are all pegged over into the red "BUY ME" zone.

Now let's ice that cake. After a false downside breakdown this week, copper closed above the top of a rising triangle today. Very good.

Hand me that knife, that cake needs more icing still. Look at the gold/silver ratio. Closed at 70.244 today! Lost 2.4 full points today. Broke down this week, smashed through the 20 & 50 DMAs like James Bond driving an Aston Martin through roadblocks. GAPPPED DOWN today, traded even below its 200 day moving average, and closed BELOW the uptrend line from the April 2011 low!

Don't miss this, that gold/silver ratio is SHOUTING at us that something big is happening, some big change. Today's intraday low was the lowest since 6 October 16, and lower than that. And all this comes on top of a failed breakout in the last two weeks.

Are y'all paying attention? Silver is leading, tugging, pulling at the reins to run, and that's what the ratio shows. Something big is starting here, unless this is a fake out like that drop in February. Oh, but this one is different.

Time to buy silver & gold. You got your signal. Y'all don't buy, it's your fault.

On 20 March 1896 US Marines landed in Nicaragua to "protect US citizens." The more things change, the more they remain the same.

On 20 March 1890 young German Emperor Wilhelm II fired his chancellor Otto von Bismarck, who had guided the formation of the German empire through and after the Franco-Prussian War. It was perhaps the most egregiously stupid mistake in a career studded and larded with spectacularly stupid mistakes. Doubtful Bismarck, for all his flaws, would have let Europe fall into the carnage of World War I.

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
20-Mar-15 Price Change % Change
Gold, $/oz 1,184.80 15.70 1.3
Silver, $/oz 16.87 0.77 4.8
Gold/Silver Ratio 70.244 0.899 1.3
Silver/Gold Ratio 0.0142 0.0006 4.8
Platinum 1,142.20 21.40 1.9
Palladium 778.75 13.30 1.7
S&P 500 2,108.10 18.83 0.9
Dow 18,127.65 168.62 0.9
Dow in GOLD $s 316.28 -1.23 -0.4
Dow in GOLD oz 15.30 -0.06 -0.4
Dow in SILVER oz 1,074.74 -40.87 -3.7
US Dollar Index 98.14 -1.45 -1.5
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: 1,181.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,215.76 1,222.85 1,222.85
1/2 AE 0.50 607.96 623.24 1,246.48
1/4 AE 0.25 303.98 317.53 1,270.11
1/10 AE 0.10 123.95 129.37 1,293.74
Aust. 100 corona 0.98 1,148.84 1,157.84 1,181.23
British sovereign 0.24 280.21 285.21 1,211.60
French 20 franc 0.19 222.24 226.24 1,211.79
Krugerrand 1.00 1,198.04 1,208.04 1,208.04
Maple Leaf 1.00 1,189.50 1,206.50 1,206.50
1/2 Maple Leaf 0.50 679.36 620.29 1,240.58
1/4 Maple Leaf 0.25 301.28 316.05 1,264.21
1/10 Maple Leaf 0.10 125.24 128.78 1,287.84
Mexican 50 peso 1.21 1,413.02 1,424.02 1,181.07
.9999 bar 1.00 1,185.64 1,197.50 1,197.50
SPOT SILVER: 16.73      
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 12,816.38 13,173.88 18.43
US 40% silver 1/2s 0.30 4,742.13 4,892.13 16.58
100 oz .999 bar 100.00 1,662.50 1,722.50 17.23
10 oz .999 bar 10.00 172.25 173.25 17.33
1 oz .999 round 1.00 16.83 17.33 17.33
Am Eagle, 200 oz Min 1.00 18.23 19.03 19.03
SPOT PLATINUM: 1,142.20      
Platinum Platypus 1.00 1,157.20 1,187.20 1,187.20
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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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