The Moneychanger
Daily Commentary
Wednesday, 29 April a.d. 2015 Browse the commentary archive

My eyes bugged out when I looked at the US dollar Index chart & saw it had broken down through its lower trading channel boundary. The spongy move from the July 2014 breakout over 81.20 now falls under questioning scrutiny. Oh, other stopping points offer themselves, namely the 200 day moving average at 89.71, but a lot of air intervenes between today's 94.71 close and 89.71. Today's close was 61 basis points short of yesterday's, a 0.64% loss. Stalled twice at 95.40.

The dollar's foregoing parabolic rise guarantees a swift and long fall, or would if were we observing anything but a jimmied market. Nothing happens much by nature in currencies: all currency rates are manipulated. For all we know, the Fed criminals struck a deal with the ECB criminals to let the dollar rise, then fall. Surely we can guess that trend & momentum following hedge funds fat with no-cost money to gamble with, thanks to the Federal Reserve's zero interest rates, would also push the dollar up when it began rising -- they follow markets, they don't lead them. And since money and hedge funds know no loyalty, they abandon markets just as quickly as they disappoint them. All this wildly accelerates market swings and destabilizes markets, thanks to the Fed.

Yea, truly, a nation without a central bank is like an oyster without a piano.

Euro rose 0.89% to $1.1221, confirming yesterday's breakout into a rally. Potential targets are $1.1400 and $1.2250. Yen lost 0.24% to 83.77. No life there.

Other inflation markets forged ahead (a circumstance that makes silver & gold's behavior today suspect). WTIC rose 1.88% to $59.63/barrel. YO! Copper! Broke out of that bullish flag and rose 3.55% from $2.787 to $2.89. Target is $3.15.

And the yield is rising on the 10 year Treasury note, up another 0.54% today to 2.046%. That upward pressure can result from speculators expecting the Fed to raise rates (not likely) to speculators bailing out of dollars & into euros (more likely -- lots of luck.)

Stocks took body blow today. All indices fell. Dow gave up 195.01 (1.08%) to 17,840.52 & the S&P500 shucked 21.34 (1.01%) to 2,085.51. I reckon that answers my question yesterday about the 18,034 - 18,039 level. 'Twas not a stable perch in the high winds of today's markets.

I really have to show y'all these charts, and They both illustrate classic breakdowns after a failed breakout.

Both indices, and I suspect the others, too, but I didn't check them, sliced through their intertwined 20 & 50 DMA's, both turned down MACD indicators & RSI. Lower prices in store, unless the Nice Government Men of the Plunge Protection Team get busy and build a safety net somewhere. Mattereth not: they will only prolong the inevitable death plunge. Germany's DAX broke yesterday.

Ahh, but the greater falls in silver & gold today turned the Dow in Silver & Dow in Gold up, but only enough to touch the 50 DMA. Still pointed earthward.

Gold fell $27.40 (2.3%) to $1,182.40 on Comex and silver fell 54.6 cents (3.3%) to 1612.4c. I hate to fall back on the NGM, but don't it seem suspicious to y'all, don't it smell a bit of sardines, that oil and copper made hay out of the dollar's fall today but silver & gold FELL? Leave it be, fall back on description, nat'ral born durned fool! That's why we wait for confirmations, I reckon.

About 9:45 some BIG seller pounded gold, smacking it from $1,205 to $1,176 by 11:45, about as straight down as you'd want.

Well, y'all can go into mourning if you want, but I'm not. Sellers only forced gold back down to the bottom of the range, they didn't break it. And that upside gold breakout in the $GOLD:$USD spread? It fell, but it remains broken out. The picture of sinewy strength able to bounce back remains. However, Gold really must not back through $1,170.

Sellers hit silver harder than gold, piling on about 1670c & driving it down to 1581c. Its recovery was nothing to brag about, but peppier than gold's.

Once again, y'all, this attack drove silver down, but did not break it through that uptrend line from the December 2014 low.

Let's lay aside questions of NGM or other interest parties jimmying the market. What! How can I justify that? Because they can only affect markets at the margin & over the short term. All the experience of 1996 - 2011 proves that. But what we can see is that the downward momentum of silver & gold has flattened in the last two years and just about stopped in the last six months. Now instead of crumbling, they take a sock to the jaw, shake their heads, and climb back up off the mat, dancing smartly. Both are forming rounding bottoms, and while I know better than ever to say "never," both appear to have left lows behind the in December.

Look at it this way: the market is handing you a chance to buy more silver & gold cheaper. Take it.

On 30 April 1803 the United States purchased the Louisiana Territory from France for $15 million in gold. Because the gold dollar then was a bit heavier (0.05157714 oz), that amounted to 773,657 troy ounces. To give you an idea how ridiculously low today's gold price is, at $1,182/ounce, Louisiana Territory, over half the area of the US, was bought for $914 billion of today's fiat dollars. Don't make no sense atall.

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
29-Apr-15 Price Change % Change
Gold, $/oz 1,209.80 -3.80 -0.31%
Silver, $/oz 16.67 0.08 0.48%
Gold/Silver Ratio 72.573 -0.575 -0.79%
Silver/Gold Ratio 0.0138 0.0001 0.79%
Platinum 1,160.40 -20.50 -1.74%
Palladium 784.75 -8.25 -1.04%
S&P 500 2,106.85 -7.91 -0.37%
Dow 18,035.53 -74.61 -0.41%
Dow in GOLD $s 308.17 -0.31 -0.10%
Dow in GOLD oz 14.91 -0.01 -0.10%
Dow in SILVER oz 1,081.92 -9.65 -0.88%
US Dollar Index 95.32 -0.87 -0.90%
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SPOT GOLD: 1,209.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,238.63 1,251.94 1,251.94
1/2 AE 0.50 616.39 638.06 1,276.13
1/4 AE 0.25 311.21 325.08 1,300.32
1/10 AE 0.10 126.90 132.45 1,324.51
Aust. 100 corona 0.98 1,177.35 1,186.35 1,210.31
British sovereign 0.24 286.88 299.88 1,273.90
French 20 franc 0.19 227.53 231.53 1,240.10
Krugerrand 1.00 1,222.91 1,232.91 1,232.91
Maple Leaf 1.00 1,217.60 1,233.60 1,233.60
1/2 Maple Leaf 0.50 695.52 635.04 1,270.08
1/4 Maple Leaf 0.25 308.45 323.57 1,294.27
1/10 Maple Leaf 0.10 128.22 131.85 1,318.46
Mexican 50 peso 1.21 1,445.17 1,456.17 1,207.74
.9999 bar 1.00 1,213.83 1,221.60 1,221.60
SPOT SILVER: 16.67      
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 12,523.23 12,880.73 18.02
US 40% silver 1/2s 0.30 4,724.43 4,874.43 16.52
100 oz .999 bar 100.00 1,656.50 1,706.50 17.07
10 oz .999 bar 10.00 165.65 171.15 17.12
1 oz .999 round 1.00 16.77 17.27 17.27
Am Eagle, 200 oz Min 1.00 18.17 19.02 19.02
SPOT PLATINUM: 1,160.40      
Plat. Platypus 1.00 1,175.40 1,205.40 1,205.40
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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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