The Moneychanger
Daily Commentary
Tuesday, 28 April a.d. 2015 Browse the commentary archive

Owch! Today the dollar index got busy proving that parabolic rises end always in woe, plunging for the fifth day running. O, Wo! It's worse still. The Dollar index today lost 65 basis points (0.67%) to end at 96.29, right firmly beneath 96.50 support and back under the downtrend line which April's rally had boosted it above.

Mo wo! RSI points down, MACD points down, ROC & full stochastics all point down. Down it is, then! (And down another 20 bps in the aftermarket!)

This week all rational people will be tortured once again by release of Federal Open Market Committee notes and more groundless speculation about when the Moros on the FOMC will raise interest rates.

As if that weren't painful enough to the fastidious mind, new coinages are being spawned like toads in spring to describe the Greek financial troubles. First was "Grexit," a Greek Exit from the euro. Next came Greccident, an accidental exit from the euro. Now comes the most likely state, Grimbo, Greece In Limbo where the negotiations over Greek debt drag on world without end. Whole thing has me Grexhausted.

Thinkin' on it a while, I wouldn't be surprised the Fed hadn't contributed to slamming the dollar to help their fellow criminals in the European Central Bank while the Greek crisis drags on. Whoops! My suspicion is showing again. But the euro did rise 0.75% to $1.0971 today. The euro has a modest uptrend working, but must climb over $1.1040 to break out into a rally, but it hasn't shown any more ambition than a vegan in a butcher shop.

Yen rose only 0.13% to 84.12. No fun there.

Inflation markets are dancin'. West Texas Intermediate Crude lifted 0.72% to $57.06/barrell. Rallying. Don't believe me? Go look, Copper's on the verge of breakout, None of this matches or fits into the official Establishment "deflation" scare.

More seesawing in stocks: Dow & S&P500 up, Nasdaq & Nasdaq 100 down. Dow rose 72.17 (0.4%) to 18,110.14 but not enough to convince me of any serious intent to rise. Closed barely above the downtrend line. Might happen, but all the back and forth decreases the likelihood. SP500 scraped up another 5.84 (0.28%) to 2,114.76. Also closed above downtrend line, but has done that 4 times already without betterment.

[Don't gloat. Don't gloat. Don't gloat.]

Dow in Gold & Dow in Silver both tumbled further today. Both sliced through their closely-aligned 20 & 50 day moving averages like a sharp knife through Wonderbread balloon loaf.

Dow in gold fell 0.45% to G$309.04 gold dollars (14.95 troy ounces). Down below a bare G$15 lies the 200 DMA at G$294.37 (14.24 oz). Dow in silver tumbled 0.99% to S$1,411.40 silver dollars (1,091.63 oz), on its way to the 200 DMA at S$1,308.38 (1,011.95 oz). Indicators all pointing straight down.

Yesterday I said silver & gold would have to make good their gains by closing over $1,210 and 1660c. We half made it. Gold surged another $10.70 (0.9%) to close Comex at $1,214.00. Silver did close over 1650c, but rose only 19.7 cents (1.2%) to finish at 1659.1c

Today's gold trading was market by another 11:30 miracle. Gold moved sideways nonchalantly until 11:30 then shot from $1,205 to $1,211 quicker than a condo developer can skin a prospect. One jump, then sort of rolled up to $1,215, & closed near the top of the day's range.

But -- O, mercy! -- I am holding on to this. Gold in US dollar index spread gapped up and pulled away from that 50 DMA like a Saturn rocket. Don't take my word, go look for yourself,

Whooaaa! Here's the same chart for silver, $silver:$usd, Look, look, two days to cut from below the bottom triangle boundary (in a failed breakdown) clean through the 20 & 50 DMAs and all the way to the upper triangle boundary!

Slap, slap! Sober up, there! Silver still must bust through this 1660c area and keep right on marching, no, make that running, toward 1740c, the last high. Up there at 1741c lies the 200 DMA, the goal of all goals right now. Silver above the 200 DMA will panic shorts everywhere, and attract buyers.

Gold also must keep climbing. Made it through $1,210, now let's see it clear $1,225.

I bought some today anyway. I know I ought to wait, but I bought just a little, to wet my toes.

By the way, those large orders keep coming in. Not massive numbers, but massive size. Serious people are spending serious money on silver & gold. Not a lot of them yet -- the realizers, edging out of the way before the storm.

Today Tyson Foods announced they are phasing out human antibiotics given to chickens by 2017. Wow. That's some kind of hurry, ain't it? Y'all know why they load animals down with antibiotics, right? They make 'em fat. Make 'em gain weight fast. They've been doing that since the early 1950s. You may not believe me, but you'll believe the New York Times in this article,

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
28-Apr-15 Price Change % Change
Gold, $/oz 1,214.00 10.70 0.89%
Silver, $/oz 16.59 0.20 1.20%
Gold/Silver Ratio 73.172 -0.227 -0.31%
Silver/Gold Ratio 0.0137 0.0000 0.31%
Platinum 1,157.50 4.80 0.42%
Palladium 780.85 1.30 0.17%
S&P 500 2,114.76 5.86 0.28%
Dow 18,110.14 72.17 0.40%
Dow in GOLD $s 308.38 -1.50 -0.48%
Dow in GOLD oz 14.92 -0.07 -0.48%
Dow in SILVER oz 1,091.56 -8.71 -0.79%
US Dollar Index 96.29 -0.65 -0.67%
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SPOT GOLD: 1,212.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,241.80 1,255.14 1,255.14
1/2 AE 0.50 617.97 639.70 1,279.40
1/4 AE 0.25 312.01 325.91 1,303.65
1/10 AE 0.10 127.23 132.79 1,327.91
Aust. 100 corona 0.98 1,181.56 1,190.56 1,214.61
British sovereign 0.24 287.61 300.61 1,277.02
French 20 franc 0.19 228.11 232.11 1,243.22
Krugerrand 1.00 1,226.04 1,236.04 1,236.04
Maple Leaf 1.00 1,220.70 1,236.70 1,236.70
1/2 Maple Leaf 0.50 697.30 636.67 1,273.34
1/4 Maple Leaf 0.25 309.24 324.40 1,297.59
1/10 Maple Leaf 0.10 128.55 132.18 1,321.84
Mexican 50 peso 1.21 1,448.87 1,459.87 1,210.81
.9999 bar 1.00 1,216.94 1,224.70 1,224.70
SPOT SILVER: 16.61      
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 4,708.20 4,858.20 16.47
100 oz .999 bar 100.00 1,651.00 1,701.00 17.01
10 oz .999 bar 10.00 165.10 170.60 17.06
1 oz .999 round 1.00 16.71 17.21 17.21
Am Eagle, 200 oz Min 1.00 18.11 18.96 18.96
SPOT PLATINUM: 1,157.50      
Plat. Platypus 1.00 1,172.50 1,202.50 1,202.50
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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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