The Moneychanger
Weekly Commentary
Friday, 5 June a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  29-May-15 5-Jun-15 Change % Change
Silver, cents/oz. 1,668.40 1,597.10 -71.30 -4.3
Gold, dollars/oz. 1,189.40 1,167.80 -21.60 -1.8
Gold/silver ratio 71.290 73.120 1.830 2.6
Silver/gold ratio 0.0140 0.0137 -0.0004 -2.5
Dow in Gold Dollars (DIG$) 313.03 315.96 2.94 0.9
Dow in gold ounces 15.14 15.28 0.14 0.9
Dow in Silver ounces 1,079.52 1,117.62 38.10 3.5
Dow Industrials 18,010.68 17,849.46 -161.22 -0.9
S&P500 2,107.39 2,092.83 -14.56 -0.7
US dollar index 96.97 96.36 -0.61 -0.6
Platinum 1,111.00 1,091.30 -19.70 -1.8
Palladium 776.75 750.40 -26.35 -3.4

Before we look at the week, let's consider year to date performance. Since 31 December 2014 silver is up 2.6% (as of today), gold down 1.4%. Here's how stocks have scored: Dow Industrials +0.1%; S&P500 + 1.6%; Dow Transports, -6.9%; Dow Utilities - 8.9%, Dow composite, -3.4%; Russell 2000, +4.7%; Wilshire 5000, + 2.3%.

But the big eye-gogglers come with interest rates and bond prices. 10 year T-note yield, up 10.7% [sic]; 30 year bond yield, +15.4%. 10 year note price is down 0.8% and 30 year bond down 1.2%.

US dollar index is up 6.3% for the year, euro is down 8.1%, and the yen is down 4.7%.

This was the week silver & gold got creamed, but stocks didn't fare too well either. US dollar index is crazy volatile, and white metals are just sick.

After falling a colossal 160 basis points on Tuesday, the US dollar index lost another 51 basis points on Wednesday, but today jumped up 87 basis points (0.91%) to close at 96.36. The media attributd the dollar's jump to a "robust" lying jobs report from the Labor Department (I added that "lying" part, and it's the report that's lying, not lying jobs increasing). The logic of this augury is that Mother Janet, when she's not wishing she owned a donut shop instead of running the Fed, is watching the employment number and when it waxes "robust" enough, she will give the all clear for raising interest rates. Higher interest rates, in turn, will make the scrofulous, scabby dollar more attractive than the scrofulous, scabby yen and euro, so more folks will buy it.

All this majestic, mighty aircastle was built on a leetle ol' lying jobs report.

The dollar's trend is down. Dollar index needs to close above 97.88 to change that.

If you think the dollar's ugly, you ought to look at the euro -- but put on your dark glasses first. Euro dropped 1.03% today to $1.1114. Black clouds from Greece still overhang it.

Yen hit a 13 year low against the dollar today, 79.66 cents to 100 yen (US$1= Y125.53). And it's likely to fall further.

I reckon this interest rate thing's about to get out of hand. 10 year US T-note yield rose another 4.12% today to 2.402%. It stands above its 200 day moving average & at 2.45% will cross the downtrend line from the 2007 high. Look for yourself, http://schrts.co/cKCV7Z

Now think about the 10 year T-note's PRICE. It's here, http://schrts.co/1FGqXe Since June began it has been trading below its 200 day moving average and is threatening to crash through the bottom boundary of an even-sided triangle forming since 2013.

The 30 year Treasury bond yield traded up through its 200 DMA as May opened, traded higher, then came back to the 200 DMA for a final kiss good-bye, and since June has shot higher. It has passed the 20 DMA and the last high. Don't take my word: http://schrts.co/tJ7zRF

The 30 year bond price has been dropping since April and today passed beneath its 200DMA. Presently at 149.98, the uptrend line stands at 146. Chart's at http://schrts.co/mhGhYm

So what? Here's what: the central banking criminals' strategy all hangs on keeping interest rates near zero. Rising rates means the market is testing the central banks' fetters. Also at stake is the Cosmos' Biggest Bond Bubble that central banks have blown up since 2008 with ZIRP. Once the stampede starts out of bonds, the ground will quake in Yellen-ville, and Mario Draghi may be looking for a job at a higher level, say, hanging from a lamppost.

Stocks are struggling, heavy laden in rough seas. Today the Dow Industrials peeled off another 56.12 (0.31%) to close at 17,849.46, below 18,000 & third down week running. Also, it has pierced its 20 and 50 DMAs and today closed barely below its lower trading channel boundary. Last low was 17,738, so watch that. 200 DMA isn't far at 17,608.50.

S&P500 lost 3.01 (0.14%) to end at 2,092.83. Also in hexed alignment below its 50 DMA and barely above its uptrend line. Watch 2,068, the last low.

For a person with financial staying power and patience this would be a wondrous, historic place to short stocks with long dated puts.

Metals' woes this week pushed up the Dow in Metals in spite of stocks' weakness. Dow in Silver closed the week at S$1,443.83 silver dollars (1,116.71 oz), above the moving averages but well below the top gator jaw. Dow in gold is at the upper Gator Jaw again. Closed at G$315.87 gold dollars (15.28 oz). Both are still rolling over, still doomed to plunge like Iguaçu Falls. Write it down and watch for it.

Silver backed off 11.8 cents to close Comex at 1597.1c. Gold forked over another $7.10 to close at $1,167.80.

Today's gold low at $1,162 took gold into that even-sided triangle, but it closed above the upper boundary. In fact, in the aftermarket it was trading at $1,171.30.

I'm no clairvoyant and my crystal ball broke a long time ago. I can only sketch out two outcomes. 1, gold keeps on dropping to the triangle's bottom boundary now about $1,145. 2, gold turns around here, stumbles sideways the rest of the month, but inches higher till June ends. Gold chart's at http://schrts.co/6OOS0q

Silver, thy name is volatility! Silver dropped clean through the nose of the triangle, but on an end of day chart today posted the first half of a key reversal by breaking into new low for the move but closing higher than yesterday. A close higher than today's EOD close (1609c) is needed Monday to complete that key reversal. Otherwise silver may fall clean to support around 1550c. See it here, http://schrts.co/s4SygJ

What is telling, however, is how the phones are ringing. Whole lot of folks are eager buyers at these prices, all over the country. That hints that silver & gold won't abide down here long. abide down here long.

The gold/silver ratio gave a favorable sign. It had been lingering beneath its 200 DMA (where we want it), but this week shot through that and even crossed back above the uptrend line from the April 2011 low. Today it fell back through that. And, yes, that is a big deal, a Very Big Deal, that the ratio had been trending up for four years and has now broken down through that line. Very big deal indeed. Ratio chart: http://schrts.co/BXYO6m

Y'all ought to be buying silver & gold.

I see where the yankee government Office of Personnel management got hacked & the hackers stole the names, addresses, and shoe sizes of four million government employees. Now the point here is not that government computers were hacked. You expect that 'cause government never quite gets it right. But my question is, why do we need four million people working for the yankee government? Just think of all the potholes they could fill and fenceposts they could set and rocks they could break up & sock drawers they could straighten if they were put to useful and productive work!

On 5 June 1827 the Turks captured the Acropolis and Athens. Today Greece has been captured by the bankers, who are a lot more bloodthirsty than the Ottoman Turks were.

On 5 June 1913 the US Marines invaded Cuba -- for the third time. As the French say, the more things change, the more they stay the same.

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
5-Jun-15 Price Change % Change
Gold, $/oz 1,174.90 -7.10 -0.6
Silver, $/oz 15.97 -0.12 -0.7
Gold/Silver Ratio 73.565 -0.439 -0.6
Silver/Gold Ratio 0.0136 -0.0001 -0.7
Platinum 1,091.30 -7.40 -0.7
Palladium 750.40 -4.70 -0.6
S&P 500 2,092.83 -3.01 -0.1
Dow 17,849.46 -56.12 -0.3
Dow in GOLD $s 314.05 0.94 0.3
Dow in GOLD oz 15.19 0.05 0.3
Dow in SILVER oz 1,117.62 4.71 0.4
US Dollar Index 96.36 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: 1,171.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,205.27 1,212.30 1,212.30
1/2 AE 0.50 596.85 617.86 1,235.72
1/4 AE 0.25 301.35 314.79 1,259.15
1/10 AE 0.10 122.88 128.26 1,282.57
Aust. 100 corona 0.98 1,142.37 1,151.37 1,174.63
British sovereign 0.24 277.79 290.79 1,235.31
French 20 franc 0.19 220.32 224.32 1,201.51
Krugerrand 1.00 1,185.36 1,195.36 1,195.36
Maple Leaf 1.00 1,179.30 1,195.30 1,195.30
1/2 Maple Leaf 0.50 673.50 614.93 1,229.87
1/4 Maple Leaf 0.25 298.68 313.32 1,253.29
1/10 Maple Leaf 0.10 124.16 127.67 1,276.72
Mexican 50 peso 1.21 1,400.82 1,411.82 1,170.96
.9999 bar 1.00 1,175.40 1,183.30 1,183.30
SPOT SILVER: 16.07      
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 12,097.80 12,455.30 17.42
US 40% silver 1/2s 0.30 4,548.90 4,698.90 15.93
100 oz .999 bar 100.00 1,597.00 1,647.00 16.47
10 oz .999 bar 10.00 159.70 165.20 16.52
1 oz .999 round 1.00 16.17 16.67 16.67
Am Eagle, 200 oz Min 1.00 17.57 18.42 18.42
SPOT PLATINUM: 1,091.30      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 1,106.30 1,136.30 1,136.30
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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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