The Moneychanger
Daily Commentary
Tuesday, 23 June a.d. 2015 Browse the commentary archive

Exampling how volatile & spooky markets are -- thanks to stabilizing central banks -- the US dollar index today rose 118 basis points (1.25%) to 95.70. On what news? What changed? Somebody discovered how to make electricity for free in the US? Nope, one Fed Reserve governor named Jerome Powell made a speech claiming the US economy "could" be ready for a rate hike in September, followed by a second in December and the US economy is set to strengthen in the year's second half.

What I don't grasp: the Fed has NEVER yet, not once, correctly forecast the US economy. Why would anybody believe any of their shills today? Beats me.

Dollar began rising last night, and opened today (24 hour day) about 94.80. Then it steadily rose until 9:30 eastern, then flattened the rest of the day. Silver & gold pretty much painted the reverse of that.

In spite of rumors the Greek crisis is solved, stocks could hardly put one foot in front of the other today. Dow managed to climb 24.29 (0.13%) to 18,144.07. S&P500 added 1.35 (0.06%) to 2,124.20. Volume is not falling but also not growing. Can still inch higher.

Go look at this chart, the Dow in Gold: http://schrts.co/8Sv0tc Today the DiG punched through the upper gator jaw, closing at 15.41 troy oz versus the March high at 15.58. I've been warning y'all this might happen. When I saw it, first thought that struck my mind was, "That's it. We're seeing the bottom in gold forming now." Oh, maybe not today, probably not today, but it's close. Stocks are making their last push up & gold its last dip, sending that Dow in Gold up. Remember, too, that we are now in the seasonal low window for Gold & Silver.

Here's the Dow in Silver, http://schrts.co/ohwLZP It is reaching for its upper gator jaw, but not quite there at 1,152.96 troy ounces. Same vision applies here. A price bottom is coming for silver, whether now or two weeks, it's coming.

Silver dropped 40.5 cents (2.51%) to 1573.2c while gold dropped only $7.50 (0.63%) $1,176.20. That sent the Gold/Silver Ratio to a new high for the move, 74.765 -- another argument for a bottom nearby.

Silver pierced & closed below its uptrend line. Normally that leads to a further fall. Silver has support about 1550c, but that's not to say it cannot drop further in a quick spike that will scare us all to death. RSI is negative but other indicators are not. Look for yourself, http://schrts.co/kBK1Tm

Here's a gold chart, http://schrts.co/mBW5UP

No surprise, gold sliced through its 20 DMA today, so gravity & momentum are weighing heavily. If it doesn't stop at that $1,175 area that stopped it before, it is doomed to drop to $1,162, the last low, or $1,140, the March low.

The volatility is killing me. The Greek crisis gets blamed for it, but it arises out of markets that are nervous, greedy, scared, & confused. That's why they dump the dollar for 118 points one day, and buy it for 118 the next, why stocks lose 200 in two days then take back 100. All the unknowns and the fearful suspicions are weighing markets down, especially the suspicion that the Fed just might be stupid or lying about the economy.

I would say, Look for a sudden, sharp turnaround as a buy signal, but we've had too many of those that have fizzled lately. Just keep this in mind: after the US dollar's gone & the euro is a footnote in economic history, after the Fed has been abolished and statism is just a bitter memory, silver & gold will still be money, and still be valuable.

My friend Gunnar Haid of Gutrade Podcast talked me into an interview about all the fun I had fighting with the US government for 14 years. He calls it, "How I beat the US Government," but I think he got it wrong. Seems to me I took the beating, but the interview was fun. Download at http://bit.ly/1LA8aW6

Only one thing I didn't make clear enough in that interview, so I'll make it plain to y'all now: God delivered us. Those people intended to put my dear Susan and me away for 19 years, along with 14 other friends, but God had other plans, praise his Holy Name. He alone gets the glory.

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
23-Jun-15 Price Change % Change
Gold, $/oz 1,183.70 -7.50 -0.63%
Silver, $/oz 15.73 -0.41 -2.51%
Gold/Silver Ratio 75.242 1.424 1.93%
Silver/Gold Ratio 0.0133 -0.0003 -1.89%
Platinum 1,067.20 6.90 0.65%
Palladium 695.20 0.15 0.02%
S&P 500 2,124.20 1.35 0.06%
Dow 18,144.07 24.29 0.13%
Dow in GOLD $s 316.86 2.42 0.77%
Dow in GOLD oz 15.33 0.12 0.77%
Dow in SILVER oz 1,153.32 30.45 2.71%
US Dollar Index 95.70 1.18 1.25%
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: 1,176.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,209.24 1,217.47 1,217.47
1/2 AE 0.50 599.40 620.50 1,241.00
1/4 AE 0.25 302.64 316.13 1,264.52
1/10 AE 0.10 123.41 128.80 1,288.05
Aust. 100 corona 0.98 1,146.09 1,155.09 1,178.42
British sovereign 0.24 278.98 291.98 1,240.35
French 20 franc 0.19 221.26 225.26 1,206.55
Krugerrand 1.00 1,190.42 1,200.42 1,200.42
Maple Leaf 1.00 1,184.30 1,200.30 1,200.30
1/2 Maple Leaf 0.50 676.37 617.56 1,235.12
1/4 Maple Leaf 0.25 299.96 314.66 1,258.64
1/10 Maple Leaf 0.10 124.69 128.22 1,282.17
Mexican 50 peso 1.21 1,406.80 1,417.80 1,175.92
.9999 bar 1.00 1,180.42 1,188.30 1,188.30
SPOT SILVER: 15.73      
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 12,208.63 12,566.13 17.58
US 40% silver 1/2s 0.30 4,447.13 4,597.13 15.58
100 oz .999 bar 100.00 1,562.50 1,612.50 16.13
10 oz .999 bar 10.00 156.25 161.75 16.18
1 oz .999 round 1.00 15.83 16.33 16.33
Am Eagle, 200 oz Min 1.00 17.23 18.08 18.08
SPOT PLATINUM: 1,067.20      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,082.20 1,112.20 1,112.20
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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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