The Moneychanger
Daily Commentary
Monday, 30 March a.d. 2015 Browse the commentary archive

Markets are all a-bubble today with Mother Janet Yellen's comments late Friday and the Chinese Central Bank president's comments. Both were more of the same nonsense, Yellen promising higher interest rates somewhere in the future, and the Chinese CB's president threatening more inflation. I am reminded of what Danish CB's head Lars Rohde said on 4 February about defending the Danish Kroner's peg to the euro: "There is no limit to how low rates can go and how large foreign currency reserves can grow . . . Either we can expand our balance sheet or we can go deeper into negative territory with interest rates . . . We can go on forever."

Well, Mr. & Mrs. Masters of the Universe, "forever" is a long time. Y'all may be used to pushing markets around with the breath of your mouth, but in the end, you're just bad breath and when y'all need the Certs, y'all won't be able to find 'em. Hogbreath. All bluff & hogbreath.

All the same, stocks jumped today, especially the dollar, I reckon 'cause Yellen gave the gamblers a second wind. It rose 81 basis points (0.83%) to 98.32. Technically that places the dollar above the 20 DMA, and the half-way line of its trading channel. Also might mark a breakout thru the downtrend line.

Euro did what you expect, it fainted again, back to its 20 DMA. Lost 0.71% to $1.0815. Simply can't get any rally working. Yen gapped down today, 0.84% to 83.23. Looked for news, but couldn't find any. It just took a notion to drop.

But notice the volatility in the currency markets as well as stocks. This is the result of the Masters of the Universe breath blowing across them. Anybody think that improves on nature? Raise your hand.

Dow leapt 263.65 (1.49%) to 17,976.31, and up 25.22 (1.22%) jumped the S&P500 to 2,086.24.

If you take a string & stretch it from the 2 March high across the 23 March highs, you get a downtrend with two lower highs and two lower lows. So until stocks burst through that line, tomorrows about 18,180, they are still trending down, no matter what the hogreath volatility from day to day.

Stocks' strength and metals' weakness today sent the Dow in Gold & Dow in silver bouncing up sharply. Dow in gold gained 2.64% to G$313.59 gold dollars (15.17 oz). Dow in silver jumped up 3.29% to S$1,393.91 silver dollars (1,078.10 oz.).

SO? Trend has not changed, outlook remains unchanged. Stocks appear to have peaked against silver & gold.

Gold lost $15.00 today & shuttered Comex at $1,184.80; silver gave up 35.9 cents to 1665.70.

Clearly on Friday I didn't scrutinize the charts closely enough for downside gargets. Let's try that again. Gold is likely to hit $1,170 on a correction, & silver might stop at 1660c but could drop to 1620c.

Interesting that volume dropped off for both metals today, very sharply for gold. That suggests there's not much power behind the selling. Correction will likely last all this week.

Be patient, be patient.

This is Holy Week, and our office will be closed from noon on Maundy Thursday and won't open again until the Tuesday after Easter. I hope y'all enjoy your Easter as much as I plan to enjoy mine.

On 30 March 1533 Thomas Cranmer became Archbishop of Canterbury. He would preside over the turbulent move of the Church of England from Roman Catholicism to Protestantism. Along the way he also became the chief author of the Book of Common Prayer, still in use today, whose unforgettable cadences helped form modern English.

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
30-Mar-15 Price Change % Change
Gold, $/oz 1,184.80 -15.00 -1.25%
Silver, $/oz 16.66 -0.36 -2.11%
Gold/Silver Ratio 71.129 0.619 0.88%
Silver/Gold Ratio 0.0141 -0.0001 -0.87%
Platinum 1,119.50 7.50 0.67%
Palladium 728.70 7.95 1.10%
S&P 500 2,086.24 25.22 1.22%
Dow 17,976.31 263.65 1.49%
Dow in GOLD $s 313.64 8.46 2.77%
Dow in GOLD oz 15.17 0.41 2.77%
Dow in SILVER oz 1,079.20 38.26 3.68%
US Dollar Index 98.32 0.81 0.83%
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: 1,184.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,216.79 1,226.27 1,226.27
1/2 AE 0.50 603.74 624.98 1,249.96
1/4 AE 0.25 304.83 318.42 1,273.66
1/10 AE 0.10 124.30 129.74 1,297.36
Aust. 100 corona 0.98 1,155.53 1,164.53 1,188.06
British sovereign 0.24 280.99 285.99 1,214.93
French 20 franc 0.19 222.86 226.86 1,215.11
Krugerrand 1.00 1,199.02 1,209.02 1,209.02
Maple Leaf 1.00 1,192.80 1,208.80 1,208.80
1/2 Maple Leaf 0.50 681.26 622.02 1,244.04
1/4 Maple Leaf 0.25 302.12 316.93 1,267.74
1/10 Maple Leaf 0.10 125.59 129.14 1,291.43
Mexican 50 peso 1.21 1,418.40 1,429.40 1,185.53
.9999 bar 1.00 1,188.95 1,196.80 1,196.80
SPOT SILVER: 16.69      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 23.00 26.00 33.99
VG+ Peace dollar 0.77 18.50 21.00 27.45
90% silver coin bags 0.72 12,609.03 12,966.53 18.14
US 40% silver 1/2s 0.30 4,730.33 4,880.33 16.54
100 oz .999 bar 100.00 1,658.50 1,723.50 17.24
10 oz .999 bar 10.00 165.85 172.35 17.24
1 oz .999 round 1.00 16.79 17.29 17.29
Am Eagle, 200 oz Min 1.00 17.69 19.04 19.04
SPOT PLATINUM: 1,119.50      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,134.50 1,164.50 1,164.50
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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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