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

Fellow mushrooms, here's a perfect example of how our Monetary Masters work us. Last Wednesday the FOMC announcement hit the hyperbolic US dollar in the head with a nine pound hammer. (I'd been telling y'all the Nice Government Men couldn't let that rising dollar rise forever.) Today Comrade Fed Vice-Chairman Stanley Fischer says he expects the Fed to start raising interest rates sometime this year.

This shameless shilling is nothing more than the Good Cop/Bad Cop routine that police use to terrorize people under interrogation. The Fed is continually promising to raise interest rates, then pulling back the promise. Their dadburn lips ought to be worn out on the right and left but not in the middle, since they spend so much time talking out of both sides of their mouth.

Today's message, for those who will read, says, "Whoops! The dollar has dropped about enough, & might get out of hand. Let's make a speech that will talk it back up."

Instead of the Gang that Couldn't Shoot Straight, they're the Gang That Couldn't Think Straight.

The US dollar index fell another 87 basis points (0.89%) to 97.30, reminding me that whatever market riseth straight up also falleth straight down.

This is serious. Dollar index closed below its 20 DMA (97.44) and below that internal mid-channel line. Y'all remember that in January when the dollar blew through its upper channel line, I flipped the channel line over to make a new upper channel line just twice the width of the old. Target then, when it broke out about 94, was 100, and 100 it hath made. Time to drop back to the channel's bottom boundary, about 94.

Dollar is also monstrously high above its 200 DMA, now 87.36. Now is the time to let out all that air in the price. This will take a while. Chart:

Euro took advantage of the dollar's distraction to close above the downtrend line that has ruled its wretched existence since December. Rose 1.23% to $1.0946. That's right at the $1.0903 20 DMA but the euro really needs to climb above the apex of the last even-sided triangle, now about $1.1350. The euro may rise, but only from dollar weakness & not from euro strength. They are having a time corralling even little Greece, which contributes about 1.26% of its GDP and has 2.2% of its population. What will they do if Spain or Italy gets a burr under its economic saddle?

Yen rose a well-mannered 0.25%, not hurting anybody's feelings or threatening anybody's exchange rate. Closed at 83.53, keeping its head down. Has a leetle, discreet rally going.

Accelerated by a falling dollar the inflation markets did well today. West Texas Intermediate Crude rose 2.24% to $47.49. Still rangebound, but knocking on the 20 DMA's door. Copper blew the top off the cooker today with a 4.54% rise to $2.88. Chart: Copper is closing in on its 200 DMA at $2.95.

When some great person in history or literature tries some great thing and it fails, we call that a "tragedy." When a market breaks into higher territory, then fails to hold its gains, we call that a "failure."

Dow today reached a high of 18,205, but about 2:00 some rats started climbing down the gangway and the anchor ropes. How DO they know?

Dow wound up 89 points lower than that high, and 11.61 (0.06%) lower for the day at 18,116.04. S&P500 fell even more, 3.68 or 0.17% to 2,104.42.

About them Gator Jaws. Dow in Gold punched down again, back through the top Gator Jaw it had overthrown (but not 3%) & poked through the 20 DMA (G$315.66 gold dollars or 15.27 troy ounces). As all trend & momentum indicators bear unanimous witness, it has rolled over towards the bottom of the mine.

Dow in silver, thanks to silver's relatively greater strength, fell today through its 50 DMA (S$1,380.01 silver dollars or 1,067.35 ounces) and dropped 1.54% to S$1,379.84 (1,067.22). Will move lower.

Today was Paint The Tape day for the NGM (or the bandits on the exchange floor) in gold and silver. I'll explain in a second.

Gold closed Comex $3.20 higher at $1,188, but silver only rose 1/2 cent to 1687.2c. Mmmmm.

Then in the aftermarket gold trades at $1,191.10 and silver at 1706c. Painted tape closes. Said silver price truly speaks loudly, since it is above resistance at 1700c. Now silver has pierced its 20 DMA (1609c) and 50 DMA (1674c) & closed above that neckline we have watched so long, AND closed above its last high at 1686c. If silver can't rally on this, it can't rally.

Where's gold? Above its 20 DMA (1,180.18) and ready to take on resistance beginning at $1,190. It has also broken out of its downward trading channel reigning since the January high. This comes after it slid down its 3-sigma lower Bollinger Band & punched through the 2-sigma version.

What lies ahead? Ground gold has fought back and forth over more than no-man's land, time after time. From $1,190 to $1,223, the last high, gold must pick its way through landmines. Not as far along as silver, but following up close.

Gold/silver ratio dropped again, cutting into but not closing beneath its 200 DMA at 69.74! Closed Comex at 70.413. Gapped down on Friday, and confirmation today makes that look like a runaway gap. Listen to this, hear me: the gold/silver ratio closed BELOW its uptrend line from the April 2011 low! That means two things.

1) If you EVER want to trade gold for silver, here's your last chance for this round.

2) Gold & Silver are flashing the brightest buy signal you're likely to see. Stop waiting and buy some.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
23-Mar-15 Price Change % Change
Gold, $/oz 1,188.00 3.20 0.27%
Silver, $/oz 16.87 0.01 0.03%
Gold/Silver Ratio 70.413 0.169 0.24%
Silver/Gold Ratio 0.0142 -0.0000 -0.24%
Platinum 1,145.50 3.30 0.29%
Palladium 770.35 8.40 1.10%
S&P 500 2,104.42 -3.68 -0.17%
Dow 18,116.64 -11.61 -0.06%
Dow in GOLD $s 315.24 -1.05 -0.33%
Dow in GOLD oz 15.25 -0.05 -0.33%
Dow in SILVER oz 1,073.77 -1.01 -0.09%
US Dollar Index 98.14 -1.45 -1.46%
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: 1,191.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,226.83 1,232.79 1,232.79
1/2 AE 0.50 612.90 628.31 1,256.61
1/4 AE 0.25 306.45 320.11 1,280.43
1/10 AE 0.10 124.96 130.43 1,304.25
Aust. 100 corona 0.98 1,158.18 1,167.18 1,190.75
British sovereign 0.24 282.49 287.49 1,221.27
French 20 franc 0.19 224.05 228.05 1,221.46
Krugerrand 1.00 1,208.97 1,218.97 1,218.97
Maple Leaf 1.00 1,199.10 1,216.10 1,216.10
1/2 Maple Leaf 0.50 684.88 625.33 1,250.66
1/4 Maple Leaf 0.25 303.73 318.62 1,274.48
1/10 Maple Leaf 0.10 126.26 129.83 1,298.30
Mexican 50 peso 1.21 1,424.50 1,435.50 1,190.60
.9999 bar 1.00 1,195.27 1,207.10 1,207.10
SPOT SILVER: 17.06      
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 13,055.90 13,413.40 18.76
US 40% silver 1/2s 0.30 4,840.95 4,990.95 16.92
100 oz .999 bar 100.00 1,696.00 1,756.00 17.56
10 oz .999 bar 10.00 175.60 176.60 17.66
1 oz .999 round 1.00 17.16 17.66 17.66
Am Eagle, 200 oz Min 1.00 18.56 19.36 19.36
SPOT PLATINUM: 1,145.50      
Plat. Platypus 1.00 1,160.50 1,190.50 1,190.50
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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.

Other Important Information

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