The Moneychanger
Weekly Commentary
Friday, 17 April a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  10-Apr-15 17-Apr-15 Change % Change
Silver, cents/oz. 1,637.00 1,622.10 -14.90 -0.9
Gold, dollars/oz. 1,204.60 1,202.90 -1.70 -0.1
Gold/silver ratio 73.586 74.157 0.571 0.8
Silver/gold ratio 0.0136 0.0135 -0.0001 -0.8
Dow in Gold Dollars (DIG$) 309.93 306.34 -3.59 -1.2
Dow in gold ounces 14.99 14.82 -0.17 -1.2
Dow in Silver ounces 1,103.26 1,098.96 -4.30 -0.4
Dow Industrials 18,060.41 17,826.30 -234.11 -1.3
S&P500 2,101.77 2,081.18 -20.59 -1.0
US dollar index 99.66 97.53 -2.13 -2.1
Platinum 1,170.00 1,166.80 -3.20 -0.3
Palladium 775.75 782.65 6.90 0.9

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Now, to this week:

Build the bubble, and the pricking pin will appear. Media mumblers today laid blame for stocks' plunge on fear of a Greek default. Greece is only a nearby pin for a bubble waiting to burst. US dollar index capped a bad week with more pain. Silver & gold went everywhere & nowhere. Crude oil surprised the experts & broke out upside.

Nat'ral born durn fool from Tennessee that I am, I am not above every now'n then saying, "I told y'all so!" Stocks have been fumbling & stumbling all week near the top boundary, a sign of weakness & inability to advance. Today somebody on Wall Street opened the trap door, and all the stocks fell through. Yesterday some durned fool said "watch for Dow close below 17,620 & S&P500 2,030." Those numbers looked a long ways off from 18,105.77 & 2,104.99. Today they look a lot closer, for the Dow 279.47 points closer, down 1.54% to 17,826.30. Sliced through those 20 & 50 DMAs like a straight razor & never looked back. Fell more than half the trading channel's width. Here 'tis, http://scharts.co/1HBrVwB

S&P500 lost 23.81 (1.13%) but also cut through its intertwined 20 & 50 DMAs. S&P had been forming an even-sided triangle, & now is much nearer the bottom boundary. Momentum turned down today.

All week long the Dow in metals has been jigging & fishhooking up & down with no effect. Today it turned plumb vicious. Dow in Gold lost 1.97% today to close at G$306.36 gold dollars (14.82 troy oz) -- Boom! Plunged below the 20 & 50 DMA. Snapshot here, http://scharts.co/1LTqEBF

In line with silver's weakening against gold this week the Dow in Silver didn't acquit itself quite so briskly. Fell 1.33% to S$1,420.18 silver dollars. (1,098.42 try oz). http://scharts.co/1b5tl5E

This past week most likely market the end of the corrective rally in the Dow in metals. Gravity is again setting the course.

'Tis an unbroken law in markets that parabolic rises fall as fast as they rose. US dollar index is painting another example now. Now appears that last Monday's high made a double top with the 16 March high. US dollar index fell steadily & generously throughout the week, through the 20 DMA and now nearly to the 50 (96.99). Indicators have turned down. All those hot-rock speculators will become rats & cockroaches fleeing the ship when it closes below 96.30, adding speed to the descent. http://scharts.co/1HEYhF1

Euro rose today, finally, through its 20 DMA (107.94) to close at $1.0806, up 0.37%. Chart shows a double bottom, so I reckon it is rallying, but nothing will be proved until it conquers $1.1040.

Yen rose 0.9% to 84.08. Trending up and standing above its 20 & 50 DMAs, but must break out above 84.50 to confirm a rally.

West Texas Intermediate Crude fell back 1.40% today to $55.74, but that changeth naught. Still broken out above the 2-1/2 month range and will head higher. Copper is also frisky, and broke out of a bull flag today, projecting a move to about $3.00. Interesting & comforting to see these inflation markets rising. Good for metals. Not essential, but helpful.

On Comex today gold rose $4.90 (0.04%) to $1,202.90. Silver slipped a miniscule 5-1/2 cents to 1622.1c. Silver's low this week hit 1595c.

After trading as low as 1,183.50 on Tuesday, gold closed the week only $1.70 lower. I showed this chart this week, http://scharts.co/1JNS9LC to illustrate the bowl or rounding bottom gold is forming, with a lip about $1,350.

Look, now, this is a heartening chart. When any market keeps dropping to similar points but refuses to drop further, it's tired of falling & ready to climb. Similar chart can be drawn for silver, but even better (4 stops at the bowl's bottom).

Then I showed y'all this chart, Gold measured by the US dollar index, http://scharts.co/1HByUFH Remember the dollar index measures the dollar's value against several currencies. There you see that after forming an even-sided triangle, gold broke out yesterday & stayed out today. However, it must confirm by closing above the 50 DMA. Momentum indicators promise it will. Gold is on a tear against other rotten, scrofulous, parasitic, evil fiat currencies like the euro & yen & pound & Ozzie dollar.

Silver's refusal to drop below 1595c this week makes me anticipate -- not proven yet -- that silver has formed a falling wedge that will break out upward. http://scharts.co/1HBAzv4 However, silver must first hoist itself above its 50 DMA (1643) and 20 DMA (1664).

I am wondering, too, about silver's sudden transition from stronger than gold to weaker. The gold/silver ratio ended today at 74.157, but failed to break the downtrend like this week. Looks ready to turn down again. In march it made a similar upside breakdown that failed & was followed by a huge drop. http://scharts.co/1b5Dhfz

It was a miserable week for gold & silver, but try as they might the sellers couldn't break them. That's heartening action. If gold clears $1,225, buy it or silver.

I view with suspicion -- timeo Danaos et dona ferentes -- a meeting of high monetary muckety-mucks in Washington this weekend. No telling what sort of mischief they will brew. I view even more suspiciously statements this week by an old Marxist economist named Desai who works with OMFIF to the effect that the IMF's Special Drawing Right ought to be upgraded to include gold. That's gold-plating, not reform & certainly not any gold standard. I don't want any of the Establishment's rotten fixes that only make things worse, I want real money back.

I am so proud of my office flies! I have trained them to disappear every time I pull out a flyswatter. They never miss.

With 320 million people in America, you'd think they could find somebody better to run for president than a re-tread from the Bush & Clinton families or people with annoying shrill voices. We must be dumber than I thought.

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
17-Apr-15 Price Change % Change
Gold, $/oz 1,202.90 4.90 0.4
Silver, $/oz 16.22 -0.06 -0.3
Gold/Silver Ratio 74.157 0.305 0.4
Silver/Gold Ratio 0.0135 -0.0000 -0.3
Platinum 1,166.80 8.30 0.7
Palladium 782.65 3.20 0.4
S&P 500 2,081.18 -23.81 -1.1
Dow 17,826.30 -279.47 -1.5
Dow in GOLD $s 306.34 -6.04 -1.9
Dow in GOLD oz 14.82 -0.29 -1.9
Dow in SILVER oz 1,098.96 -13.46 -1.2
US Dollar Index 97.53 -0.08 -0.1
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: 1,203.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,227.47 1,245.52 1,245.52
1/2 AE 0.50 613.22 634.79 1,269.59
1/4 AE 0.25 309.62 323.41 1,293.66
1/10 AE 0.10 126.25 131.77 1,317.72
Aust. 100 corona 0.98 1,173.67 1,182.67 1,206.56
British sovereign 0.24 285.40 298.40 1,267.65
French 20 franc 0.19 226.36 230.36 1,233.85
Krugerrand 1.00 1,215.43 1,225.43 1,225.43
Maple Leaf 1.00 1,211.40 1,227.40 1,227.40
1/2 Maple Leaf 0.50 691.96 631.79 1,263.57
1/4 Maple Leaf 0.25 306.87 321.91 1,287.64
1/10 Maple Leaf 0.10 127.56 131.17 1,311.71
Mexican 50 peso 1.21 1,437.76 1,448.76 1,201.59
.9999 bar 1.00 1,207.61 1,215.40 1,215.40
SPOT SILVER: 16.21      
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 11,983.40 12,340.90 17.26
US 40% silver 1/2s 0.30 4,590.20 4,740.20 16.07
100 oz .999 bar 100.00 1,611.00 1,676.00 16.76
10 oz .999 bar 10.00 161.10 167.60 16.76
1 oz .999 round 1.00 16.31 16.81 16.81
Am Eagle, 200 oz Min 1.00 17.21 18.56 18.56
SPOT PLATINUM: 1,166.80      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 1,181.80 1,211.80 1,211.80
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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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