The Moneychanger
Daily Commentary
Thursday, 4 June a.d. 2015 Browse the commentary archive

Tonight is one of my grandsons birthday party, & if I am late my wife will skin me and tack my hide to the barn as a warning to others, so I have to keep this short. She's skinny, but she's strong.

Stocks found the open manhole & stepped in. Dow was down today 199.32, but closed down "only" 170.69 (0.94%) at 17,905.58. S&P500 fell down the same hole, down 18.23 (0..86%) to 2,095.84. Portentous. Inauspicious. Lo, and behold! Both fell below their 50 day moving averages today. Bad juju. Drums beating in jungle - bad.

I'm going to give y'all four charts to go look at, so you can tell me what they say: US 10 year T-note yield, US 30 year bond yield, German 10 year treasury yield, and the UK 10 year treasury ("gilt") yield. Every one made a low at end January and is now trading above its 200 DMA.

I remind y'all that the yield of a bond is the interest rate, & trades inversely to the bond price. Yields rise, bonds fall. Hence in a world in the grip of the most colossal, most stupendous, most gargantuan bond bubble ever seen in history engineered by central banks, YIELDS ARE RISING. This threatens the central bank criminals' strategy & control. This is not a joke.

Go look at 'em:

US 10 year yield,

US 30 year yield,

German 10 year yield,

UK 10 year yield,

This is the sort of thing that can leave folks lining up to jump out of 20 story windows. Bonds are underwater for the year.

US dollar index rose two basis points today and ended at 95.53, but traded much lower.

Gold lost $9.80 on Comex to close at $1,174.90 and silver lost 37.5 cents to end at 1608.9.

Gold's loss began about 10:45 when it fell through $1,180, but the fall was slow and sloping to a low at $1,172.95, then it rounded back up above $1,175. Not a panic day. Stopped near my $1,170 target, so scared as you might be (Hey! Stop puking in my wastebasket), this is a place to buy.

Silver followed same pattern as gold, but went a bit further. While gold intraday touched the upper triangle boundary line, silver, always more volatile, dropped through the point of its triangle to a leetle below the lower boundary. Because silver is so much more volatile than gold & often overshoots, I'm not willing to call that a breakdown, especially since gold held at the upper triangle line. I told y'all I bought silver two days ago, & I feel just fine.

I would buy both silver and gold right now at these prices, all the way down to 1575c for silver and down to $1,169 for gold.

Be advised that if I am wrong, both will likely see sharp drops, but I doubt to new lows. All gain comes with risk, and the bigger the risk, the bigger the possible gain.

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
4-Jun-15 Price Change % Change
Gold, $/oz 1,174.90 -9.80 -0.83%
Silver, $/oz 16.09 -0.38 -2.28%
Gold/Silver Ratio 73.025 1.068 1.48%
Silver/Gold Ratio 0.0137 -0.0002 -1.46%
Platinum 1,098.70 -4.90 -0.44%
Palladium 755.10 -2.70 -0.36%
S&P 500 2,095.84 -18.23 -0.86%
Dow 17,905.58 -170.69 -0.94%
Dow in GOLD $s 315.04 -0.37 -0.12%
Dow in GOLD oz 15.24 -0.02 -0.12%
Dow in SILVER oz 1,112.91 14.98 1.36%
US Dollar Index 95.53 0.02 0.02%
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: 1,176.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,206.68 1,217.26 1,217.26
1/2 AE 0.50 599.30 620.39 1,240.79
1/4 AE 0.25 302.59 316.08 1,264.31
1/10 AE 0.10 123.39 128.78 1,287.83
Aust. 100 corona 0.98 1,143.59 1,152.59 1,175.87
British sovereign 0.24 278.93 291.93 1,240.15
French 20 franc 0.19 221.22 225.22 1,206.35
Krugerrand 1.00 1,190.21 1,200.21 1,200.21
Maple Leaf 1.00 1,184.10 1,200.10 1,200.10
1/2 Maple Leaf 0.50 676.26 617.45 1,234.91
1/4 Maple Leaf 0.25 299.91 314.61 1,258.43
1/10 Maple Leaf 0.10 124.67 128.19 1,281.95
Mexican 50 peso 1.21 1,406.56 1,417.56 1,175.72
.9999 bar 1.00 1,180.22 1,188.10 1,188.10
SPOT SILVER: 16.06      
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 12,090.65 12,448.15 17.41
US 40% silver 1/2s 0.30 4,545.95 4,695.95 15.92
100 oz .999 bar 100.00 1,596.00 1,646.00 16.46
10 oz .999 bar 10.00 159.60 165.10 16.51
1 oz .999 round 1.00 16.16 16.66 16.66
Am Eagle, 200 oz Min 1.00 17.56 18.41 18.41
SPOT PLATINUM: 1,098.70      
Plat. Platypus 1.00 1,113.70 1,143.70 1,143.70
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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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