The Moneychanger
Weekly Commentary
Friday, 10 April a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  2-Apr-15 10-Apr-15 Change % Change
Silver, cents/oz. 1,668.60 1,637.00 -31.60 -1.9
Gold, dollars/oz. 1,200.90 1,204.60 3.70 0.3
Gold/silver ratio 71.971 73.586 1.615 2.2
Silver/gold ratio 0.0139 0.0136 -0.0003 -2.2
Dow in Gold Dollars (DIG$) 305.77 309.93 4.16 1.4
Dow in gold ounces 14.79 14.99 0.20 1.4
Dow in Silver ounces 1,064.56 1,103.26 38.70 3.6
Dow Industrials 17,763.24 18,060.41 297.17 1.7
S&P500 2,066.96 2,101.77 34.81 1.7
US dollar index 97.79 99.66 1.87 1.9
Platinum 1,153.80 1,170.00 16.20 1.4
Palladium 746.00 775.75 29.75 4.0

'Tis instructive to remember that on 27 March someone wrote, "Unless stocks can scrabble back above the March high, the plunge has begun, the end of the long Fed-sponsored stock bull market." Although they have recovered some, two weeks later stocks remain well below the March high. Silver & gold have spent two weeks wheel-spinning, although the numbers really don't tell this week's heroic story. Platinum & palladium are climbing out of the pit of infamy.

Don't mess with the Law Enforcement Bureaucracy: Seems one Doug Williams from Oklahoma wrote a book, From Cop to Crusader: My Fight Against the Dangerous Myth of "Lie Detection." With a long & distinguished career in law enforcement, in the late 1970s he began to realize that the lie detection test is a scam. Whoops: the yankee government didn't like that so sent in two undercover federal agents who took his course on defeating lie detector tests. Yankee government indicted him, claiming Williams is hampering investigations, but all he is doing is proving these machines don't work by presenting the evidence.

Doesn't pay to mess with the Nice Government Men, especially with their bogus investigative techniques. Take that, you science-deniers! Mess with us and we'll indict you.

Report at http://nydn.us/1CDiO7P shows that the US meat industry is buying more antibiotics for livestock. Sales jumped 20% between 2009 & 2013. Now y'all may be thinking that they feed antibiotics to livestock in crowded Confinement Animal Feeding Operations (CAFOs) to prevent disease, but you'd be wrong. Since antibiotics came on the scene in the late 1940s, they've been feeding them to livestock for one main reason: they make them gain weight faster, period. Studies back then showed the same effect on humans, which makes one suspect that the growing obesity can't be blamed on processed food, video games, & high fructose corn syrup alone. Rather, antibiotic overuse might be guilty, too.

Stocks finally managed to move a little today. Dow added 101.68 (0.57%) to 18,060.41. S&P500 jumped 0.51% (10.59) to 2,101.77.

Always have to look out for taking facts out of context -- context is everything. Doesn't matter if you're a 6'4" girl in a population that averages 7'10", you're still not tall.

Likewise, step away from the numbers & look at them charted. Dow remains in a plain downtrend since the March highs with two higher highs and two lower lows. S&P500 ahs sketched a long, narrow even-sided triangle, but above are lower highs. Next week the S&P500 would need to exceed 2,110 to o'erleap that downtrend line (upper triangle boundary). Dow would have to beat 18,120 - 18,130. Possible, but hasn't happened yet, & looked pretty puny this week.

Dow measured in metals remains rolled over & in a downtrend. Dow in silver lost 0.87% today to close at S$1,425.18 silver dollars (1,102.29 troy ounces). Stands above the 20 & 50 DMA's, but within the Gator Jaws and below mid-March peak. http://scharts.co/1zTl22J

Dow in gold dropped 0.33% today to G$309.87 gold dollars (14.99 oz). Still swimming in the gator jaws, and has made its second lower low, but not yet violated 50 DMA. http://scharts.co/1LTqEBF

US dollar index yesterday pierced the downtrend line & surged. Today it rose again, 20 basis points (0.20%) to 99.6. This begs the forecast that the dollar index is aiming for a double top with March's 100.71, although it could stop higher or lower. Here's a chart, http://scharts.co/1HEYhF1

Now y'all know not to thump your chests over a rising yankee dollar, right? The currency market is as phony as all today's manipulated markets -- Mercy, no! Phonier by far. Like every other scabrous, scrofulous, vile, parasitical, wicked fiat currency, the dollar is an expropriation waiting to happen. The rally you are witnessing is driven by carry-trade gamblers. Thanks to central banks Zero Interest Rate Policy, they are able to borrow for nothing & gamble with the loans. If you could visit the casino with a bottomless line of credit, would you hold hands with the one-armed bandit? Can a duck swim?

Yet again the euro covered itself with shame, dropping 0.5% to $1.0605. Wrecked hopes of a rally this week. Yen gained 0.36% to 83.21, still keeping its head down & scooting sideways, avoiding attention.

Last few days I've been meaning to tell y'all that premiums on common fractional gold coins have jumped. Sovereigns (0.2354 troy ounce) have gained about $8 in premium, French & Swiss 20 francs the same. Since these coins are favored gold investment forms in Europe, & since small coins have been disappearing for a couple of years, one is tempted to speculate that more Greeks & other Europeans are bailing out of the Euro. Just a guess.

Gold & silver staged a dramatic reversal today that shouts strength.

From the dismal breakdowns yesterday, gold rose $11 (0.9%) to $1,204.60, well over the morale-busting $1,200 level. Silver added 20.6 cents (1.27%) to close 1637c on Comex. That was a "paint-the-tape" close for sure, since silver rose above 1650c in the aftermarket & didn't trade near 1637 for longer than it took the black shirts to say "Close!"

Why am I buoyed by today? Gold hit that uptrend line from the March low and bounced! It's above its 20 DMA and 50 DMA ($1,204.20). It has climbed back above $1,20, & that bounce from the low $1,190s was strong. Buyers wouldn't let it languish there, so support from below is pushing gold up.

Silver had broken yesterday through its trading channel's bottom boundary, but today threw a leg over that line and bounced back over the fence. Closed slightly below the 20 & 50 DMAs, which are running together (1652c & 1653c).

In short words, yesterday's breakdowns FAILED to hold, and a failed breakdown is a bullish -- one longs to say "most bullish" -- sign.

Now factor in the gold/silver ratio. Last two days it gapped up above the 20 & 50 DMAs & looked like it would take off for the moon. Whoops, it reversed today. Now that may be no more than gap filling, we'll see next week. All the same, it matches March behavior when the ratio broke out upside, only to fail & drop like your mother-in-law's respect when you show up drunk for her birthday party. Y'all go look, http://scharts.co/1Fq4lmt

Today's trading implies (does NOT guarantee) that silver & gold intend to keep on rallying a while, and that this week's trip below $1,200 may have been the last.

Almost forgot the white metals! Since 2011's top platinum has sketched out a long falling wedge. Early in March it fell through the bottom boundary, but has since climbed above that line. Today it stands at the 50 DMA. Once again, it appears to be a failed breakdown. See it at http://scharts.co/1IAV3W7

Palladium, bless its heart, trades like a mad dog much of the time. But in early 2014 it broke through its downtrend line from 2011, rallied to 913, then fell back to touch that line. It rose and fell back again this year, but after hitting the line once more, it riseth again. It appears palladium's long bear market is about over. See http://scharts.co/1IAVuzX

On 10 April 1902 the South African Boers accepted British terms of surrender. Of course, some of 'em never stopped fighting.

On 10 April 1865 at Appomattox, Virginia, General Lee issued his last orders to the Army of Northern Virginia. Of course . . .

Y'all enjoy your weekend.

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
10-Apr-15 Price Change % Change
Gold, $/oz 1,204.60 11.00 0.9
Silver, $/oz 16.37 0.21 1.3
Gold/Silver Ratio 73.586 0.663 0.9
Silver/Gold Ratio 0.0136 0.0002 1.3
Platinum 1,170.00 13.60 1.2
Palladium 775.75 13.65 1.8
S&P 500 2,101.77 10.59 0.5
Dow 18,060.41 101.68 0.6
Dow in GOLD $s 309.93 -1.06 -0.3
Dow in GOLD oz 14.99 -0.05 -0.3
Dow in SILVER oz 1,103.26 -7.77 -0.7
US Dollar Index 99.60 0.20 0.2
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: 1,209.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,237.22 1,251.73 1,251.73
1/2 AE 0.50 616.28 637.96 1,275.92
1/4 AE 0.25 311.16 325.03 1,300.11
1/10 AE 0.10 126.88 132.43 1,324.29
Aust. 100 corona 0.98 1,177.16 1,186.16 1,210.12
British sovereign 0.24 286.83 299.83 1,273.70
French 20 franc 0.19 227.49 231.49 1,239.90
Krugerrand 1.00 1,221.49 1,231.49 1,231.49
Maple Leaf 1.00 1,217.40 1,233.40 1,233.40
1/2 Maple Leaf 0.50 695.41 634.94 1,269.87
1/4 Maple Leaf 0.25 308.40 323.51 1,294.06
1/10 Maple Leaf 0.10 128.20 131.82 1,318.25
Mexican 50 peso 1.21 1,444.93 1,455.93 1,207.54
.9999 bar 1.00 1,213.63 1,221.40 1,221.40
SPOT SILVER: 16.51      
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 12,340.90 12,698.40 17.76
US 40% silver 1/2s 0.30 4,678.70 4,828.70 16.37
100 oz .999 bar 100.00 1,641.00 1,706.00 17.06
10 oz .999 bar 10.00 164.10 170.60 17.06
1 oz .999 round 1.00 16.61 17.11 17.11
Am Eagle, 200 oz Min 1.00 17.51 18.86 18.86
SPOT PLATINUM: 1,170.00      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 1,185.00 1,215.00 1,215.00
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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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