The Moneychanger
Weekly Commentary
Friday, 1 May a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  24-Apr-15 1-May-15 Change % Change
Silver, cents/oz. 1,563.50 1,611.10 47.60 3.0
Gold, dollars/oz. 1,175.20 1,174.50 -0.70 -0.1
Gold/silver ratio 75.165 72.901 -2.264 -3.0
Silver/gold ratio 0.0133 0.0137 0.0004 3.1
Dow in Gold Dollars (DIG$) 318.04 317.23 -0.80 -0.3
Dow in gold ounces 15.38 15.35 -0.04 -0.3
Dow in Silver ounces 1,156.41 1,118.74 -37.67 -3.3
Dow Industrials 18,080.44 18,024.06 -56.38 -0.3
S&P500 2,117.65 2,108.29 -9.36 -0.4
US dollar index 97.10 95.28 -1.82 -1.9
Platinum 1,120.40 1,129.00 8.60 0.8
Palladium 769.95 773.75 3.80 0.5

Looky there! Battle didn't turn out exactly as you'd expect, viewing it from the perspective of dodging bullets.

Silver through a week of wo & joy, gained. Gold was flat, unless you pay attention to 70 cents. Gold/ silver ratio fell, and the white metals walked up a little. Some stock indices made new highs by tiny margins, the jubilatin' was loud, then they gave it all back & closed the week lower. 10 year Treasury note closed the MONTH lower. Mmmmmm.

Markets are always willing and ready to make a fool, even out of somebody who's already a nat'ral born durned fool from Tennessee. After two failed upside breakouts and a week of piddlin' fiddlin', stocks broke down sharply through their 20 & 50 day moving averages yesterday. I offered the chart to y'all as a classic example of a failed breakout followed by a breakdown. Durned if the NGM or somebody didn't turn it right smack round on me today, closing em back above the 20 & 50 DMAs. Here are the Dow & S&P charts,

Be advised that markets often reverse a breakdown with a touchback to the breakdown point, a sort of final kiss good-bye. Monday will tell us with higher or lower prices.

The Dow won back 183.54 today of the 195.01 points it lost yesterday, rising 1.03% to 18,024.06. Interesting it didn't close above that 18,034 we've been watching. S&P500 regained 22.78 against the 21.34 it lost yesterday, rising 1.09% to 2,108.29.

'Pears the market proverb, "Sell in May and go away" will be fulfilled this year.

Strong stocks today against weak gold sent the Dow in Gold back up to the top gator jaw. [Clench!] That's the sound of me grittin' my teeth. Levitated 1.80% to close at G$317.31 gold dollars (15.35 troy ounces). Dow in silver rose above its 20 & 50 DMAs (right next to each other), but nowhere near the top gator jaw. Ended at S$1,444.31 silver dollars (1,117.08 troy ounces). Dow in gold is here,, Dow in silver is here,

Surprising the experts and almost panicking some, the 10 year Treasury note ended the month LOWER. Since bond prices fall when yields rise, that means the yield (interest rate) rose. A market-driven interest rate rising on its own without the Fed's permission is the Janet Yellen's worst nightmare, mixed with chronic indigestion and athlete's foot.

US Dollar index is broken. Only question left is, how broken? Will it fall plumb out of bed to the earth's core, or will it turn up around here?

Today it gained 57 basis points or 0.6% to close 95.28, roughly reversing yesterday's trading. However, it has been dropping for 7 days, so a little dead cat bounce here amazes no one. Bu, look, it fell beneath the uptrending channel's lower boundary, & stayed outside today.

Critical here is 95.5, where the channel line will be on Monday. Above that is 96.50 support. Dollar has left behind all its fair weather friends.

Euro backed off today, a tiny 0.4%, to $1.1215. Broke out this week in what appears to be a rally. Faces resistance at $1.1140 & $1.2200. Yen dropped 0.57% to 83.26, below its 20 & 50 DMAs & vibrating uselessly.

The selling pressure (from whenever it came) today landed solely on gold. Gold lost $7.90 (0.67%) to $1,174.50 but silver gave up only 1-3/10 cent to 1611.1c.

Looking closer at the day, the sellers attacked about 9:45, but could only drive gold down to $1,168.40. Considering they drove gold below the last low ($1,174.10), that's actually not bad performance. On the longer term chart I see another explanation, namely, that gold at $1,168.40 nearly hit the 3-standard deviation Bollinger Band ($1,167). That's roughly like saying that the chance of gold going lower -- we're talking nothing but inhuman, random statistics here, ignoring for a moment that we all know that markets are driven by goal-seeking humans -- is roughly the same as your chance of walking outside and being crushed under a falling Holstein cow out of a clear blue sky. So statistically gold ought to turn up from here). Next week ought to see gold bounce back, even if it doesn't intend to rally. Monthly gold chart is equivocal, weekly chart tight-lipped. No clues to a coming rally there.

Silver's day unrolled otherwise. Sellers hit it at 9:45, but couldn't drive it below 1590c. Then silver bowed its back and jumped up again, ending the day close to unchanged. Not too bad.

If there are no downside breakdowns on silver's monthly & weekly charts, there are no upside breakouts, either. No information there.

Gold/US Dollar Index dropped today but remains broken out to the upside. Bowl formations in silver & gold still stand with unbroken bowls.

Only the gold/silver ratio is really behaving well & clearly, besides those indicators last mentioned. It closed Comex today at 72.901, and has fallen again beneath the 20 & 50 DMAs.

Y'all possess your souls in patience.

Y'all enjoy your weekend.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
1-May-15 Price Change % Change
Gold, $/oz 1,174.50 -7.90 -0.7
Silver, $/oz 16.11 -0.01 -0.1
Gold/Silver Ratio 72.901 -0.490 -0.7
Silver/Gold Ratio 0.0137 -0.0000 -0.1
Platinum 1,129.00 -10.90 -1.0
Palladium 773.75 -2.75 -0.4
S&P 500 2,108.29 22.78 1.1
Dow 17,024.06 183.54 1.1
Dow in GOLD $s 299.63 5.24 1.8
Dow in GOLD oz 14.49 0.25 1.8
Dow in SILVER oz 1,056.67 12.23 1.2
US Dollar Index 95.32 -0.87 -0.9
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: 1,174.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,202.28 1,215.19 1,215.19
1/2 AE 0.50 598.28 619.34 1,238.68
1/4 AE 0.25 302.07 315.54 1,262.16
1/10 AE 0.10 123.18 128.56 1,285.64
Aust. 100 corona 0.98 1,143.95 1,152.95 1,176.24
British sovereign 0.24 278.46 291.46 1,238.13
French 20 franc 0.19 220.85 224.85 1,204.33
Krugerrand 1.00 1,188.19 1,198.19 1,198.19
Maple Leaf 1.00 1,182.10 1,198.10 1,198.10
1/2 Maple Leaf 0.50 675.11 616.40 1,232.81
1/4 Maple Leaf 0.25 299.40 314.07 1,256.29
1/10 Maple Leaf 0.10 124.45 127.98 1,279.77
Mexican 50 peso 1.21 1,402.76 1,413.76 1,172.56
.9999 bar 1.00 1,178.21 1,186.10 1,186.10
SPOT SILVER: 16.09      
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 12,112.10 12,469.60 17.44
US 40% silver 1/2s 0.30 4,554.80 4,704.80 15.95
100 oz .999 bar 100.00 1,599.00 1,649.00 16.49
10 oz .999 bar 10.00 159.90 165.40 16.54
1 oz .999 round 1.00 16.19 16.69 16.69
Am Eagle, 200 oz Min 1.00 17.59 18.44 18.44
SPOT PLATINUM: 1,129.00      
Platinum Platypus 1.00 1,144.00 1,174.00 1,174.00
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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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