The Moneychanger
Daily Commentary
Wednesday, 1 April a.d. 2015 Browse the commentary archive

Today was filled with astounding news. Janet Yellen announced she was quitting the Federal Reserve because she could no longer participate in a criminal enterprise sucking the lifeblood out of the American people. All the other governors resigned as well, and 8 of the 12 regional Fed chairmen. President Obama held a press conference apologizing for the wreck that Obamacare had made out of healthcare and promised to ask congress to pass legislation to abolish it, but only after they had passed legislation abolishing the Fed and the IRS. At a conference in Washington hundreds of academic climate scientists met and admitted that global warming was a hoax as preposterous as the Easter Bunny.

April fooooool -- but y'all were hoping it was true, weren't you?

I'm out of time so will have to make this short. Have to say something because it was a day of turnarounds.

Stocks kept on sinking. Dow lost another 77.94 (0.44%) to 17,698.18. S&P500 gave up 8.2 (0.4%) to 2,059.69. WDF: Will Drop Further. Once stocks cut through that lower trading channel boundary, just a few points below, the rats will start POURING off the ship.

Dow in Gold & Dow in silver today lost everything they had gained in the last two days. DiG closed below the 50 DMA, & the DiS is waaaay below it.

US dollar index negated gains of the past two days, but didn't quite close below the 20 DMA (98.39). Lost 15 basis points (0.15%) to 98.51. Yen and euro did nothing with this advantage. Dollar appears to have stumbled.

Gold hunkered down and jumped flatfooted over the fence: rose $25.00 (2.1%) to $1,208.10. That takes it clean over all that resistance from $1,190 - $1,205. Still, real target is $1,223, where gold stalled on the last try. Look for gold to attempt that tomorrow.

Silver jumped 46.3 cents or 2.8% to close Comex at 1704.4c. Like gold, silver jumped flatfooted over the fences at 1680c and 1700c.

All this enthusiasm is confirmed by the Gold/Silver Ratio which closed Comex at 70.881. It punched through the 200 DMA today, but didn't close there. It also punched through the uptrend line from the April 2011 low (listen to what I'm saying) but didn't stay there. It closed barely above the line. Look at the chart,

It appears the ratio has formed a bear flag, that is, a pause after a rapid downward move where it appears to recover, trading in an upward channel. Then suddenly it breaks down out of that "flag" and resumes the sudden fall. If this flag flies at half-mast, as the measuring rule of thumb says, it targets a ratio move to at least 65.4. To confirm that it needs to drop again tomorrow.

One day doth not a reversal prove, but this was a good start on it for silver & gold. Came faster than I was looking for. If it's what I think, and we need higher closes tomorrow to prove it, then silver & gold have a stout rally before them.

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
1-Apr-15 Price Change % Change
Gold, $/oz 1,208.10 25.00 2.11%
Silver, $/oz 17.04 0.46 2.79%
Gold/Silver Ratio 70.881 -0.472 -0.66%
Silver/Gold Ratio 0.0141 0.0001 0.67%
Platinum 1,165.20 22.60 1.98%
Palladium 748.55 13.55 1.84%
S&P 500 2,059.69 -8.20 -0.40%
Dow 17,698.18 -77.94 -0.44%
Dow in GOLD $s 302.83 -7.76 -2.50%
Dow in GOLD oz 14.65 -0.38 -2.50%
Dow in SILVER oz 1,038.38 -33.70 -3.14%
US Dollar Index 98.51 -0.15 -0.15%
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: 1,203.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,234.00 1,246.04 1,246.04
1/2 AE 0.50 613.48 635.06 1,270.11
1/4 AE 0.25 309.75 323.55 1,294.19
1/10 AE 0.10 126.30 131.83 1,318.27
Aust. 100 corona 0.98 1,174.16 1,183.16 1,207.06
British sovereign 0.24 285.52 290.52 1,234.17
French 20 franc 0.19 226.45 230.45 1,234.35
Krugerrand 1.00 1,217.14 1,227.14 1,227.14
Maple Leaf 1.00 1,211.90 1,227.90 1,227.90
1/2 Maple Leaf 0.50 692.24 632.05 1,264.10
1/4 Maple Leaf 0.25 306.99 322.04 1,288.17
1/10 Maple Leaf 0.10 127.61 131.23 1,312.25
Mexican 50 peso 1.21 1,441.26 1,452.26 1,204.50
.9999 bar 1.00 1,208.11 1,215.90 1,215.90
SPOT SILVER: 16.93      
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 12,855.70 13,213.20 18.48
US 40% silver 1/2s 0.30 4,802.60 4,952.60 16.79
100 oz .999 bar 100.00 1,683.00 1,748.00 17.48
10 oz .999 bar 10.00 168.30 174.80 17.48
1 oz .999 round 1.00 17.03 17.53 17.53
Am Eagle, 200 oz Min 1.00 17.93 19.28 19.28
SPOT PLATINUM: 1,165.20      
Plat. Platypus 1.00 1,180.20 1,210.20 1,210.20
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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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