The Moneychanger
Weekly Commentary
Thursday, 7 May a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  1-May-15 8-May-15 Change % Change
Silver, cents/oz. 1,611.10 1,627.20 16.10 1.0
Gold, dollars/oz. 1,174.50 1,182.40 7.90 0.7
Gold/silver ratio 72.901 72.665 -0.236 -0.3
Silver/gold ratio 0.0137 0.0138 0.0000 0.3
Dow in Gold Dollars (DIG$) 317.23 313.37 -3.87 -1.2
Dow in gold ounces 15.35 15.16 -0.19 -1.2
Dow in Silver ounces 1,118.74 1,101.53 -17.21 -1.5
Dow Industrials 18,024.06 17,924.07 -99.99 -0.6
S&P500 2,108.29 2,088.00 -20.29 -1.0
US dollar index 95.28 94.75 -0.53 -0.6
Platinum 1,129.00 1,131.40 2.40 0.2
Palladium 773.75 785.75 12.00 1.6

I have to attend a wedding celebration tomorrow in Memphis, so I won't be here to send y'all a commentary. Hence I send this weekly summary today.

It was a tough week, burning up buying power for silver & gold & for stocks: no gains, plenty pains. US dollar index has broken all support & is now paying for that parabolic rise earlier in the year. If stocks can't go higher, neither can metals, but on balance we've made progress, even if metals have to re-visit earlier lows. Turnarounds are in train, they're just leaving the station slowly.

US dollar index looks like it got hold of some bad greasy spoon chili. Hit 93.96 yesterday, and hath fallen past earlier recent lows. Could stage a small relief rally, but it has fallen out of the intermediate term uptrend channel. Lower prices in store, although I doubt it will sink to its intrinsic value: zero.

Today the dollar index rose 57 basis points (0.61%) to 94.75. Maybe the speculators just haven't caught on yet. Euro lost 0.74% to $1.1238. The mongrel currency has had a tough time catching any fans, even with the dollar tumbling. Yen is wheel-spinning. Lost 0.17% to 83.55. No action there or in sight.

West Texas Intermediate Crude peeled off 2.9% to $58.94 & broke its uptrend line. Taint never a good sign when a market does that.

Seems the speculators are falling off bonds like scurvy rats leaving a sinking ship, both here & in Europe. Good time to get out. Yields on both the 10 year & 30 year Treasuries fell today, but both remain above their 200 day moving average. That COULD BE but is not yet confirmed as the bond bubble popping. Expect Mother Yellen to come out with her butcher knife flashing to cut the tails off those bond rats. She'll give a speech, as will some of the Fed's other caporegimes.

I remind y'all that the Fed's control is founded ultimately on BLARNEY. They huff, they puff, they propagandize like the old cadre in the USSR, but they don't control interest rates. They only set the discount rate, and if the market decides to turn against 'em, the Fed will go down like a Blue Heeler dog in front of stampeding cattle.

Stocks had an up day, almost regaining all they lost yesterday. Dow added 82.08 (0.46%) to close at 17,924.06. So it lost 228.42 Tuesday & Wednesday, but regained 82.08 today. This doesn't look like progress, especially when it closes below its 50 DMA.

S&P500 gained 7.85 (0.38%) and ended at 2,088.00. Also below its 50 DMA.

Both indices stand below/outside their uptrend lines from the 2009 low. If the S&P500 loses another 11 points, it crashes the uptrend line that has held since the March Low. I can't find anything to build optimism here, other than hoping the deus ex machina at the Fed will come buy again before stocks collapse.

Today the Dow in Gold and Dow in Silver both hooked up a little, but earlier in the week both had already removed all doubt about their direction by closing below the 20 & 50 DMAs. All this is the regulation Lubyanka torture for the gator jaws (broadening top) formation. Dow in silver rose 1.66% today to close at S$1,420.44 silver dollars (1,098.62 troy ounces). Dow in Gold climbed 1.05% to G$312.97 (15.14 oz). Charts are here http://schrts.co/ohwLZP and here, http://schrts.co/8Sv0tc

All week silver & gold have failed to conquer nearby hurdles. Today gold lost $7.90 (0.66%) & closed Comex at $1,182.40. Silver gave back 21.2 cents (1.29%) & ended at 1627.2c.

Gold's 20 & 50 DMAs are intertwined, & with a week to work gold did no more than rise to the 20 DMA. I think silver & gold are both bottoming, but they could pay one last visit to the March lows before turning up. Longer they spend without conquering progressive milestones, more vulnerable they are to a fall.

Silver has frustrated me as much as gold, won't go forward and won't back up. It did close above its 50 DMA on an EOD chart today, by two whole cents.

Weekly charts don't show anything to hang your hat on. Still, I would be selling stocks & rolling the proceeds over into silver & gold, before stocks break, as the Dow in Gold & Dow in Silver indicate they will.

I am not in favor of poking people in the eye with a sharp stick. That shooting down in Texas was at a "draw a cartoon Mohammed" contest sponsored by one Pamela Geller who is not from Texas and was taking her show on the road to carry on her own personal war with Islam. It makes no sense to draw a gun on anybody in Texas, but it also makes no sense to poke people in the eye with a sharp stick.

There's a simple rule for getting along in the world: leave people alone. Mind your own business. Some folks just never get that message.

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
7-May-15 Price Change % Change
Gold, $/oz 1,182.40 -7.90 -0.7
Silver, $/oz 16.27 -0.21 -1.3
Gold/Silver Ratio 72.665 -0.476 -0.7
Silver/Gold Ratio 0.0138 -0.0002 -1.3
Platinum 1,131.40 -10.70 -0.9
Palladium 85.75 -6.90 -7.4
S&P 500 2,088.00 7.85 0.4
Dow 17,924.06 82.08 0.5
Dow in GOLD $s 313.36 3.54 1.1
Dow in GOLD oz 15.16 0.17 1.1
Dow in SILVER oz 1,101.53 19.15 1.8
US Dollar Index 94.75 0.57 0.6
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: 1,183.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,212.31 1,225.34 1,225.34
1/2 AE 0.50 603.28 624.51 1,249.01
1/4 AE 0.25 304.60 318.17 1,272.69
1/10 AE 0.10 124.20 129.64 1,296.37
Aust. 100 corona 0.98 1,153.50 1,162.50 1,185.98
British sovereign 0.24 280.78 293.78 1,248.00
French 20 franc 0.19 222.69 226.69 1,214.20
Krugerrand 1.00 1,198.11 1,208.11 1,208.11
Maple Leaf 1.00 1,191.90 1,207.90 1,207.90
1/2 Maple Leaf 0.50 680.74 621.55 1,243.10
1/4 Maple Leaf 0.25 301.89 316.69 1,266.77
1/10 Maple Leaf 0.10 125.49 129.05 1,290.45
Mexican 50 peso 1.21 1,417.32 1,428.32 1,184.64
.9999 bar 1.00 1,188.04 1,195.90 1,195.90
SPOT SILVER: 16.30      
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 12,222.93 12,580.43 17.60
US 40% silver 1/2s 0.30 4,615.28 4,765.28 16.15
100 oz .999 bar 100.00 1,619.50 1,669.50 16.70
10 oz .999 bar 10.00 161.95 167.45 16.75
1 oz .999 round 1.00 16.40 16.90 16.90
Am Eagle, 200 oz Min 1.00 17.80 18.65 18.65
SPOT PLATINUM: 1,131.40      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 1,146.40 1,176.40 1,176.40
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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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