The Moneychanger
Weekly Commentary
Friday, 22 May a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  18-May-15 22-May-15 Change % Change
Silver, cents/oz. 1,771.20 1,703.00 -68.20 -3.9
Gold, dollars/oz. 1,227.80 1,204.00 -23.80 -1.9
Gold/silver ratio 69.320 70.699 1.379 2.0
Silver/gold ratio 0.0144 0.0141 -0.0003 -1.9
Dow in Gold Dollars (DIG$) 308.09 313.03 4.94 1.6
Dow in gold ounces 14.90 15.14 0.24 1.6
Dow in Silver ounces 1,033.13 1,070.58 37.45 3.6
Dow Industrials 18,298.88 18,232.02 -66.86 -0.4
S&P500 2,129.20 2,126.06 -3.14 -0.1
US dollar index 94.27 96.11 1.84 2.0
Platinum 1,177.40 1,147.90 -29.50 -2.5
Palladium 793.00 784.00 -9.00 -1.1

Not every week is a good one, but I reckon we'll survive this'un anyway. Stocks made tee-tiny marginal new highs only to end the week lower. US dollar index gained in a (probably) brief correction to its plunge. Silver & gold are correcting from their rally, jes' taking a break.

Once again the rationality & utility of central banking is being proved in Venezuela, where the bolivar has lost a quarter of its value in the last 8 days. Today it traded at 415 to the US dollar, down from 173 when the year started (down 56.75%). Y'all reckon any of those Venezuelans are interested in owning a little gold or silver?

Not even Janet Yellen's hot air today could breath life into the stock market. Stocks declined in spite of her mumblings. What does it say that the Dow & S&P500 made new highs this week, but finished the week lower while Janet was blowing like the west wind? 'Tain't cheery for stocks.

Dow fell 53.72 (0.29%) to 18,232.02 & the S&P500 lost 4.7 (0.22%) to 2,126.06. Both indices have traded into rising wedges, so both are candidates for a wedgectomy where the wedge breaks open and the index falls out.

Dow in metals indicators are still rolling over in the gator jaws. Dow in gold dropped 0.22% today to G$312.76 (15.13 oz), barely above the 50 & 20 DMAs which are twined together like lovers' fingers.

Dow in silver has run out ahead of the Dow in gold, and stands not much above its 200 DMA. Flat today at S$1,378.12 (1,065.89 oz). Begging to drop further.

US dollar index shot up today on not much news and on nothing Janet said. Still it rose 78 basis points (0.8%) to 96.11, which may mark the peak or near peak of this move. Resistance at 96.50 grows strong, mean, and hungry.

If the euro weren't so scabby sorry it might offer some competition to the US dollar. As it is, it can't. It lost 0.93% to $1.1013 today, & has wrecked its uptrend. Yen fell 0.42% to 82.29, back to the bottom of its 6 month trading range. No hope.

In the snarling teeth of a hot rising dollar and Janet Yellen's fetid breath silver & gold held out today. On Comex gold lost a measly ten cents to $1,204.00 and silver gave back 8.1 cents to 1703c. Yes, after two rising weeks both silver & gold suffered a down week, but considering the rise that's not so bad. AND they are still holding on here about 1700c and $1,200 support.

Remember we are moving into that part of the year that usually marks a seasonal low for silver & gold. Seasonal low doesn't mean "low for the year", only low relative to the rest of the year. That argues against expecting any big rise out of silver & gold next week, but options expire on Tuesday. After options expire the manipulators ease up a few days, so we might see action out of gold and silver next week.

Buy on any fall to $1,190 or 1680c.

Meanwhile, like those Venezuelans, I'm brushing up on my monetary history & holding on to silver & gold.

By the way, the Internet's abuzz in stories about governments banning cash. Don't you know they'd like to, but it ain't yet feasible. They might try, especially in totalitarian Europe, but not yet in the US and impossible in Asia. What do you suppose a cash ban would do to the street value of silver & gold? I remember back in the late 1970s gold's street value in Russia was $2,400 an ounce when it was $600 in the US. That "illegal" part adds significant value. That "asset outside the banking system" adds significantly more value.

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
22-May-15 Price Change % Change
Gold, $/oz 1,204.00 -0.10 -0.0
Silver, $/oz 17.03 -0.08 -0.5
Gold/Silver Ratio 70.699 -0.003 -0.0
Silver/Gold Ratio 0.0141 -0.0001 -0.5
Platinum 1,147.90 -3.60 -0.3
Palladium 784.00 7.90 1.0
S&P 500 2,126.06 -4.70 -0.2
Dow 18,232.00 -53.72 -0.3
Dow in GOLD $s 313.03 -0.86 -0.3
Dow in GOLD oz 15.14 -0.04 -0.3
Dow in SILVER oz 1,070.58 1.93 0.2
US Dollar Index 9.11 0.78 9.4
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: 1,205.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,231.92 1,247.59 1,247.59
1/2 AE 0.50 614.24 635.85 1,271.70
1/4 AE 0.25 310.13 323.95 1,295.81
1/10 AE 0.10 126.46 131.99 1,319.91
Aust. 100 corona 0.98 1,174.44 1,183.44 1,207.35
British sovereign 0.24 285.88 298.88 1,269.67
French 20 franc 0.19 226.74 230.74 1,235.87
Krugerrand 1.00 1,218.66 1,228.66 1,228.66
Maple Leaf 1.00 1,213.40 1,229.40 1,229.40
1/2 Maple Leaf 0.50 693.11 632.84 1,265.67
1/4 Maple Leaf 0.25 307.38 322.44 1,289.78
1/10 Maple Leaf 0.10 127.77 131.39 1,313.89
Mexican 50 peso 1.21 1,443.06 1,454.06 1,205.99
.9999 bar 1.00 1,209.62 1,217.40 1,217.40
SPOT SILVER: 17.08      
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 12,748.45 13,105.95 18.33
US 40% silver 1/2s 0.30 4,846.85 4,996.85 16.94
100 oz .999 bar 100.00 1,698.00 1,748.00 17.48
10 oz .999 bar 10.00 169.80 175.30 17.53
1 oz .999 round 1.00 17.18 17.68 17.68
Am Eagle, 200 oz Min 1.00 18.58 19.43 19.43
SPOT PLATINUM: 1,147.90      
Platinum Platypus 1.00 1,162.90 1,192.90 1,192.90
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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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