The Moneychanger
Daily Commentary
Thursday, 14 May a.d. 2015 Browse the commentary archive

I made the mistake this morning of showing my swollen toe to my wife Susan. I casually remarked I probably ought to see a podiatrist some day & forgot about it. That was as stupid as telling your daddy you have a loose tooth.

About 4:00 Susan whisked me into town like I had sliced two arteries "because the podiatrist is going to be closed tomorrow & you don't want to go over the weekend with that." Next thing I knew the podiatrist was shooting up my toe with deadener and whittlin' away like I was an oak stump, the whittlin' was free & she had a hankerin'. "This won't hurt," she said, Right you are, I thought, it ain't your toe.

So y'all are going to get the short and basic commentary tonight.

I bet y'all think I'm a-hangin' my head in shame & red-faced confusion cause stocks jumpt today. I ain't even thought about it, because I don't care a bit what stocks do in dollar terms, only in silver & gold.

Now the S&P made a marginal new high today, but the headlines are touting it like it blew the top off the scoreboard. Lo, S&P500 rose 22.62 (1.08%) to close at 2,121.10 against its 24 April high at 2,117.69, a big 0.16% better! Durned if that don't shut my nat'ral born Tennessee fool mouth.

Dow rose 191.75 (1.06%) to 18,252.24. By the way, I am just small minded enough to point out the Dow didn't confirm the S&P500, since its last high was 2 March at 18,288.63.

And I am cranky and small minded enough to observe that this new S&P500 high was only a closing high, not the intraday high. I can carp with the best of 'em.

But y'all looky here at that Dow in Gold. Based on the end of day gold price, lower than the Comex close, it closed up 0.2% at G$308.01 (14.90 oz). That is way below the 20 & 50 DMAs (15.09 oz & 15.11 oz).

The Dow in silver is a sight to behold! It fell 0.93% today to S$1,351.21 silver dollars (1,045.08), a bare S$21.64 (16.74 oz) from the 200 DMA at S$1,329.57 (1,028.34 oz). Yes, I will crow when the DiS cuts thru that line.

US dollar index firmed up its intentions today by falling another 22 basis points (0.23%) to 93.43. I am the leeeast bit bothered by what might be a falling wedge on the US dollar index chart, but now that it has passed 94 support, it ought to keep falling a long way.

Euro rose 0.55% to $1.1414 -- made it today, as I suspected. I reckon it will keep rising for a while, but it isn't scratchin' off & laying any tracks behind it. Yen actually fell 0.04% to 83.89, being carefully trimmed by the NGM, I suspect.

Gold rose $7.40 (0.61%) to close Comex at $1,225.40. Silver added 24.2 cents (1.41%) to 1744.9c. Both metals have now reached stiff resistance, $1,225 & 1740c. What are the chances they can keep on rising?

On the negative side, both silver & gold today touched their top Bollinger Band (3 standard deviations), which usually occasions a reversal -- BUT not if they widen out the bands. And the bands for gold are at their narrowest since last June. For silver the width is narrow, but not as narrow as it has been in the last two years.

On the plus side, both silver & gold today closed above their 200 day moving averages ($1,220.90 & 1713c). Minus side of that is, it might mark the limit of their upmove. Silver last traded above its 200 DMA in August 2014, gold in February of this year.

More plus: this stepping out three day rise that has taken gold up $42.60 & silver up 115.1 cents is what a rally ought to look like, with sharply rising volume.

Plus plus: Gold/Silver ratio dropped again today, to 70.227, and is well below it 71.47 200 DMA. End of day ratio close was at 69.89! Also the ratio has fallen BENEATH the uptrend line from the April 2011 low. Y'all look for yourselves,

Swap gold for silver NOW if you have any left.

Finally, that Gold/US Dollar Index spread has broken out upwards like it's stretching for the moon. Go look:

Bottom line is writ here: either silver & gold will run out of gas here, tomorrow, or they will bust through & keep rolling. From the way they've boiled the last three days, chance is better than even they aim to rise further. If they move higher briskly tomorrow, y'all ought to buy some.

But what do I know? I'm jes' a nat'ral born durned fool trying to type with his foot propped up on a waste basket & a podiatrist whose toe ain't hurting. I am a mess.

Only a government agency can REALLY run things into the ground. On 14 May 1980 President Jimmy Carter established the Department of Health and Human Services. Since that time health has taken a nosedive, service has gone to pot, and what service you might extort, wheedle, or beg out of the yankee government is sure to be inhuman or inhumane.

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
14-May-15 Price Change % Change
Gold, $/oz 1,225.40 7.40 0.61%
Silver, $/oz 17.45 0.24 1.41%
Gold/Silver Ratio 70.228 -0.558 -0.79%
Silver/Gold Ratio 0.0142 0.0001 0.79%
Platinum 1,161.30 11.50 1.00%
Palladium 779.50 -9.90 -1.25%
S&P 500 2,121.10 22.62 1.08%
Dow 18,252.24 191.75 1.06%
Dow in GOLD $s 307.90 1.38 0.45%
Dow in GOLD oz 14.89 0.07 0.45%
Dow in SILVER oz 1,046.03 -3.57 -0.34%
US Dollar Index 93.43 -0.22 -0.23%
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SPOT GOLD: 1,220.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,250.20 1,263.63 1,263.63
1/2 AE 0.50 622.15 644.02 1,288.05
1/4 AE 0.25 314.12 328.12 1,312.47
1/10 AE 0.10 128.09 133.69 1,336.89
Aust. 100 corona 0.98 1,189.55 1,198.55 1,222.76
British sovereign 0.24 289.56 302.56 1,285.28
French 20 franc 0.19 229.65 233.65 1,251.48
Krugerrand 1.00 1,234.33 1,244.33 1,244.33
Maple Leaf 1.00 1,228.90 1,244.90 1,244.90
1/2 Maple Leaf 0.50 702.02 640.97 1,281.95
1/4 Maple Leaf 0.25 311.33 326.59 1,306.36
1/10 Maple Leaf 0.10 129.42 133.08 1,330.78
Mexican 50 peso 1.21 1,461.61 1,472.61 1,221.38
.9999 bar 1.00 1,225.17 1,232.90 1,232.90
SPOT SILVER: 17.45      
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 13,045.18 13,402.68 18.75
US 40% silver 1/2s 0.30 4,954.53 5,104.53 17.30
100 oz .999 bar 100.00 1,734.50 1,784.50 17.85
10 oz .999 bar 10.00 173.45 178.95 17.90
1 oz .999 round 1.00 17.55 18.05 18.05
Am Eagle, 200 oz Min 1.00 18.95 19.80 19.80
SPOT PLATINUM: 1,161.30      
Plat. Platypus 1.00 1,176.30 1,206.30 1,206.30
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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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