The Moneychanger
Daily Commentary
Wednesday, 8 April a.d. 2015 Browse the commentary archive

Two of my sons were spraying sugar and fish emulsion on our pastures & somehow my wife Susan squeezed in there & wound up driving the sprayer truck. Then they all come in to my office for a meeting. Imagine somebody soaking his clothes a couple of days in that oil you pour off a can of sardines. That is what it still smells like.

I'm not sure, but I believe I saw a buzzard tailing that truck Susan was driving.

Today smelt a lot the same way, fishy. FOMC -- Federal Organism for Monetary Crimes -- minutes were published today, let us all fall down and worship. At least, some fell down and worshipped -- rest of us yawned. Minutes said nothing, but said it both ways. Didn't move markets much, just confused 'em a little more.

US dollar index rose another 22 basis points (0.22% to 98.28. Chart remains in a downtrend with equivocal indicators. In today's insane world driven by carry-trading gamblers, anything could happen.

Euro fell 0.3% to $1.0782. It has formed a kind of flat topped rising triangle, which usually breaks out upward, but it's the durned laziest thing I ever saw. If it falls out of this triangle it'll spend another six months sick & puking.

Japanese yen rose 0.17% to 83.26, flat as a fritter, which itself raises suspicions. Nobody in the world interested in trading yen?

Stocks traded up, they traded down, they traded all around & did nothing much profound. Dow rose 0.15% (27.09 points) to 17,902.51. Hot zig, be still my beating heart. S&P500 added 5.57 (0.27%) to 2,081.90.

Behold the chart, observe the lower lows and lower highs. That defineth a downtrend.

Dow in silver & Dow in gold have turned up, of course, and both are above their 50 day moving averages. Dow in silver closed at $1,406.75 silver dollars (1,088.03 oz), up 2.41% today. Dow in gold rose 0.58% to G$307.60 gold dollars (14.88 troy ounces). Both have rolled over and headed down, and are still pointing down longer term.

'Twas not a good day for silver & gold. Gold misplaced $7.50 (0.6%) somewhere to end Comex at $1,203.10. Silver gave away 38.5 cents for a 1644c close, down 2.3% .

Silver flatlined above 1675c until about 12:15 eastern time when it dropped 20 cents in a few minutes. Traded as low as 1641c. Ended the day on its 20 DMA (1644c.

Wouldn't everybody be surprised tomorrow if silver jumped up to 1725c? I kept staring at the chart & realized that silver has traced out a bullish flag pattern. Unless it closes below today's 1641c low & invalidates that pattern, it foretells an upside breakout. Unhappily, silver's other indicators seem to be nixing that idea.

Gold's daily chart steadily eroded from 8:00 a.m. without much relief. Made a little V-bottom about 4:00 p.m., but nothing spectacular.

Day before yesterday Gold hit its 2-sigma Bollinger Band & turned down, & indicators look rotten, but I step back & look at that chart from mid-March till now and it shows a nice steep uptrend.

Let's see what happens tomorrow when the haze of those FOMC meeting minutes clears away.

What I don't like the most is the Gold/Silver ratio that jumped up to 73.181 today. On the chart it o'erleapt the 20 & 50 DMAs & left a gap behind. That I don't like. Chart is here,

On 8 April 1864 Confederate General Richard Taylor routed yankee troops in the Battle of Mansfield, Louisiana. Son of President Zachary Taylor, General Taylor had grown up partly in Washington & knew everybody. His memoir of the war, Destruction & Reconstruction, is the most thoughtful memoir I have read, full of humor, character insight, and elegance. Still in print, too. Taylor was a fine writer.

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
8-Apr-15 Price Change % Change
Gold, $/oz 1,203.10 -7.50 -0.62%
Silver, $/oz 16.44 -0.39 -2.29%
Gold/Silver Ratio 73.181 1.229 1.71%
Silver/Gold Ratio 0.0137 -0.0002 -1.68%
Platinum 1,165.50 -7.80 -0.66%
Palladium 755.40 -13.30 -1.73%
S&P 500 2,081.90 5.57 0.27%
Dow 17,902.51 27.09 0.15%
Dow in GOLD $s 307.60 2.37 0.78%
Dow in GOLD oz 14.88 0.11 0.78%
Dow in SILVER oz 1,088.96 26.53 2.50%
US Dollar Index 98.28 0.22 0.22%
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SPOT GOLD: 1,202.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,232.87 1,244.90 1,244.90
1/2 AE 0.50 612.92 634.48 1,268.95
1/4 AE 0.25 309.46 323.25 1,293.01
1/10 AE 0.10 126.19 131.71 1,317.07
Aust. 100 corona 0.98 1,173.09 1,182.09 1,205.97
British sovereign 0.24 285.26 298.26 1,267.05
French 20 franc 0.19 226.25 230.25 1,233.25
Krugerrand 1.00 1,216.03 1,226.03 1,226.03
Maple Leaf 1.00 1,210.80 1,226.80 1,226.80
1/2 Maple Leaf 0.50 691.61 631.47 1,262.94
1/4 Maple Leaf 0.25 306.71 321.75 1,287.00
1/10 Maple Leaf 0.10 127.50 131.11 1,311.05
Mexican 50 peso 1.21 1,442.85 1,453.85 1,205.81
.9999 bar 1.00 1,207.01 1,214.80 1,214.80
SPOT SILVER: 16.56      
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 12,483.90 12,841.40 17.96
US 40% silver 1/2s 0.30 4,693.45 4,843.45 16.42
100 oz .999 bar 100.00 1,646.00 1,711.00 17.11
10 oz .999 bar 10.00 164.60 171.10 17.11
1 oz .999 round 1.00 16.66 17.16 17.16
Am Eagle, 200 oz Min 1.00 17.56 18.91 18.91
SPOT PLATINUM: 1,165.50      
Plat. Platypus 1.00 1,180.50 1,210.50 1,210.50
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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.

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