The Moneychanger
Daily Commentary
Monday, 27 April a.d. 2015 Browse the commentary archive

Something's not right, and for a change it may be not right in our favor.

Gold today rose $28.10 (2.4%) to end the day on Comex at $1,203.30. Silver rose 75.8 cents -- 4.85% -- to 1639.4c. More, this happened on options expiry day with a huge clot of $1,200 strike call options outstanding. One expects "Someone" to manipulate the price down on such days so that the options expire worthless -- maybe they did the manipulating last week & bought back the options positions? This is not how the con game usually works.

But standing back from the chart, putting your hand over the label & simply asking, "What's this market doing?" brings only one answer: reversing upward.

Gold actually punched through its 20 & 50 day moving averages ($1,197.86 & $1,192.22). This was brute strong trading action, but it can only count as a first step. Below $1,210 and $1,225, gold does no more than tread water.

Still, this is hopeful, and points to very deep pocketed buyers below $1,180. Sort of sets a floor under gold. Chart's here, http://schrts.co/lLxLfw

During the day gold made tee-tiny progress until 11:30 a.m., when at a single bound it shot from $1,185 to$1,200, ran as high as $1,207, then settled back. No, I don't know what the catalyst was, which points to something working on the floor, something opaque. Maybe all those short gold were spooked when it pierced $1,200? Whatever caused it, it shows strength.

Did I forget to mention that gold broke out today in the $gold:$USD, gold/US dollar index spread? Shame on me. Looky here at it above the 50 DMA, http://schrts.co/eC51UV

Gold was strong? Look at silver, http://schrts.co/kBEsWt

Silver had formed a falling wedge, traded out into the nose, and today burst upwards & closed above the 20 & 50 DMAs.

A close tomorrow above 1660c for silver and $1,210 for gold would initiate a rally.

After all the new highs last week, stocks just fizzled today. Dow lost 42.17 (0.23%) to end up at 18,039.97, again. S&P500 lost 8.77 (0.41%) to 2,108.92. Hear me now: these drops today LOUDLY refuse to confirm last week's new highs. Disagreement means weakness. Breakout reversed, and was false.

Mercy! Look at that gold/silver ratio: http://schrts.co/kh9gOy In one short day it gapped down and regained everything it had lost in the month of April, but then bounced back up to close barely above the 20 & 50 DMAs. A sign of yet more strength.

I'm much too nice to gloat, but if I was ever tempted to gloat, it would be today. That Dow in Gold hit that upper gator jaw Friday and even I was lower than a fat frog in a deep well. Bottom rail's on top today, though. Shot straight down from Friday's high to close at G$309.87 gold dollars (14.99 oz), down 2.17%. It cut through the 50 dma and stopped right at the 20 dma. Look, look, that top gator jaw HELD.

Dow in Silver didn't "decline," it dropped straight down like the guest of honor at a hanging. Dropped S$64.93 silver dollars (50.22 troy ounces) to S$1,422.58 (1,100.28 troy ounces). Also landed sliced through the 50 DMA & skidded to a stop at the 20 DMA.

The top gator jaws HELD.

US dollar index helped metals some by dropping 21 basis points (0.22%) to 96.89, but it was a-workin' in that direction long before gold & silver shot up, so that explains nothing.

Today's trading puts a whole new light on things. If silver & gold can just close higher tomorrow, we've got something cookin'!

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
27-Apr-15 Price Change % Change
Gold, $/oz 1,203.30 28.10 2.39%
Silver, $/oz 16.39 0.76 4.85%
Gold/Silver Ratio 73.399 -1.761 -2.34%
Silver/Gold Ratio 0.0136 0.0003 2.40%
Platinum 1,152.70 32.30 2.88%
Palladium 782.15 12.20 1.58%
S&P 500 2,108.92 -8.77 -0.41%
Dow 18,037.97 -42.17 -0.23%
Dow in GOLD $s 309.88 -8.15 -2.56%
Dow in GOLD oz 14.99 -0.39 -2.56%
Dow in SILVER oz 1,100.28 -56.04 -4.85%
US Dollar Index 96.89 -0.21 -0.22%
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: 1,202.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,231.77 1,245.00 1,245.00
1/2 AE 0.50 612.97 634.53 1,269.06
1/4 AE 0.25 309.49 323.28 1,293.12
1/10 AE 0.10 126.20 131.72 1,317.18
Aust. 100 corona 0.98 1,172.01 1,181.01 1,204.86
British sovereign 0.24 285.29 298.29 1,267.15
French 20 franc 0.19 226.27 230.27 1,233.35
Krugerrand 1.00 1,216.13 1,226.13 1,226.13
Maple Leaf 1.00 1,210.90 1,226.90 1,226.90
1/2 Maple Leaf 0.50 691.67 631.52 1,263.05
1/4 Maple Leaf 0.25 306.74 321.78 1,287.10
1/10 Maple Leaf 0.10 127.51 131.12 1,311.16
Mexican 50 peso 1.21 1,437.16 1,448.16 1,201.10
.9999 bar 1.00 1,207.11 1,214.90 1,214.90
SPOT SILVER: 16.35      
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 12,298.00 12,655.50 17.70
US 40% silver 1/2s 0.30 4,631.50 4,781.50 16.21
100 oz .999 bar 100.00 1,625.00 1,675.00 16.75
10 oz .999 bar 10.00 162.50 168.00 16.80
1 oz .999 round 1.00 16.45 16.95 16.95
Am Eagle, 200 oz Min 1.00 17.85 18.70 18.70
SPOT PLATINUM: 1,152.70      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,167.70 1,197.70 1,197.70
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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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