The Moneychanger
Daily Commentary
Tuesday, 7 April a.d. 2015 Browse the commentary archive

We were closed yesterday for Easter Monday, so I'll try to sort out two days in one.

The yankee government issued its lying jobs report on Friday when all the markets were closed, a typical sneak attack. However, the report upset markets on Monday, driving the US dollar down 83 basis points to 96.96, lowest point in the present move, but not quite as low as that two weeks ago. Thus it leaveth behind a riddle: hath it turned up?

Stocks rose on Monday, expecting I suppose more inflation & later rising interest rate. But today they could not sustain any higher move and in fact sank. Dow lost a minimal 4.53 (0.03%) to 17,875.42 while the S&P lost 4.29 (0.21%) to 2,076.33.

Forget what the man behind the curtain says, stocks continue in a downtrend begun with the 2 March highs.

US dollar index recovered 116 basis points today to close at 98.12.

Gold rose 17.70 on Monday for a Comex close at $1,218.60 and a high at $1,224.50. Today it fell back $8.00 to $1,210.60. I told y'all this was going to be tough resistance.

Silver Monday rose 40.9 cents to 1709.5 at Comex closing. Today it gave back 27 cents to perch at 1682.5c.

Recall that Gold's March 1 high came at $1,223.00, so sellers were bound to come in at that level. Yet this also takes gold above its 50 DMA ($1,209.35). Bonus: It is above that neckline we've been watching since November, too. I don't believe this little move has exhausted itself, and it should reach at least the 200 DMA, now at $1,236.50, or, say, $1,240.

Silver looks better still, although I don't like that high yesterday at 1731, which I find too low. Yet it remains above the 50 DMA and that neckline. 200 DMA hovers above at 1776c. Rally has not ended.

That bullish flag on the Gold/Silver ratio chart did not pan out, and the ratio later traded up to fill that gap it had left behind. However, it remains below its 20 DMA (72.09) and today closed 71.952. Remember, that ratio usually falls when metals rally. Interesting here: silver since December has been slightly stronger than gold (= the ratio has been dropping). Usually silver lags back as a rally begins, then outruns gold. Not this time, and I find it encouraging for silver that is has been outperforming gold. It implies the market finds silver undervaluation too outrageous to abide, so investors must keep buying. Yes, yes, this is a marginal event, but not to be scorned. Do not despise the day of small beginnings.

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
7-Apr-15 Price Change % Change
Gold, $/oz 1,210.60 -8.00 -0.66%
Silver, $/oz 16.83 -0.27 -1.58%
Gold/Silver Ratio 71.952 0.668 0.94%
Silver/Gold Ratio 0.0139 -0.0001 -0.93%
Platinum 1,173.30 -6.60 -0.56%
Palladium 768.70 0.20 0.03%
S&P 500 2,076.33 4.29 0.21%
Dow 17,875.42 -5.43 -0.03%
Dow in GOLD $s 305.23 1.91 0.63%
Dow in GOLD oz 14.77 0.09 0.63%
Dow in SILVER oz 1,062.43 16.46 1.57%
US Dollar Index 98.12 1.16 1.20%
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: 1,208.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,238.41 1,250.49 1,250.49
1/2 AE 0.50 615.67 637.33 1,274.65
1/4 AE 0.25 310.85 324.70 1,298.82
1/10 AE 0.10 126.76 132.30 1,322.98
Aust. 100 corona 0.98 1,178.36 1,187.36 1,211.34
British sovereign 0.24 286.54 291.54 1,238.50
French 20 franc 0.19 227.26 231.26 1,238.69
Krugerrand 1.00 1,221.49 1,231.49 1,231.49
Maple Leaf 1.00 1,216.20 1,232.20 1,232.20
1/2 Maple Leaf 0.50 694.72 634.31 1,268.61
1/4 Maple Leaf 0.25 308.09 323.19 1,292.77
1/10 Maple Leaf 0.10 128.07 131.69 1,316.94
Mexican 50 peso 1.21 1,449.32 1,460.32 1,211.18
.9999 bar 1.00 1,212.43 1,220.20 1,220.20
SPOT SILVER: 16.81      
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 12,662.65 13,020.15 18.21
US 40% silver 1/2s 0.30 4,767.20 4,917.20 16.67
100 oz .999 bar 100.00 1,671.00 1,736.00 17.36
10 oz .999 bar 10.00 167.10 173.60 17.36
1 oz .999 round 1.00 16.91 17.41 17.41
Am Eagle, 200 oz Min 1.00 17.81 19.16 19.16
SPOT PLATINUM: 1,173.30      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,188.30 1,218.30 1,218.30
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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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