The Moneychanger
Weekly Commentary
Thursday, 25 June a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  18-Jun-15 25-Jun-15 Change % Change
Silver, cents/oz. 1,614.80 1,580.80 -34.00 -2.1
Gold, dollars/oz. 1,201.50 1,171.50 -30.00 -2.5
Gold/silver ratio 74.405 74.108 -0.297 -0.4
Silver/gold ratio 0.0134 0.0135 0.0001 0.4
Dow in Gold Dollars (DIG$) 311.68 315.69 4.00 1.3
Dow in gold ounces 15.08 15.27 0.19 1.3
Dow in Silver ounces 1,121.86 1,131.73 9.87 0.9
Dow Industrials 18,115.84 17,890.36 -225.48 -1.2
S&P500 2,124.24 2,102.31 -21.93 -1.0
US dollar index 94.24 95.39 1.15 1.2
Platinum 1,082.50 1,084.40 1.90 0.2
Palladium 718.60 679.15 -39.45 -5.5

I'm closing the week early because I'm driving down to Alabama tomorrow with my son to look at Southpoll cows. God willing, I'll be back on Monday.

Dead & directionless markets. Silver & gold rallies failed this week and metals tumbled. Stock market volatility continues, as stocks can't hold on to gains & rallies quickly become routs. End is near. US dollar index is undecided. Greek cloud still hangs over the market, blocking big moves.

Stocks had a plumb rotten day. Dow lost 75.71 (0.42%) and closed below its 20 DMA. Point to watch is 17,700, which roughly coincides with the 200 DMA at 17,670.34. Stocks right now are pointed down, but could still rally as high as 18,400. This shouldn't last much longer. A close belo the 200 DMA could be the trigger an avalanche.

Dow gave up 6.27 (0.3%) to 2,102.31. It too, closed below the 20 DMA tripwire. A close below 2,075 will bring trouble. Rally as high as 2140 is possible, but next move will be down. Earlier in the week the Dow in gold peeked through the top gator jaw of that broadening top, but today closed again beneath it at 15.26 oz, down 0.27%.

Dow in silver never reached that top jaw before it turned down. Ended down 0.14% today at 1,131.94. This latest attempt by stocks to push up out of the gator jaws has failed, more evidence stocks are rolling over against metals.

I am inclined to expect that the Greeks will not exit the euro. Not that Greece itself is that big and important, but its exit is just the point of a needle that the European balloon can't stand. If Greece left, others might get ideas.

US dollar tried to rally but now has stalled at the 50 DMA. Again, market is waiting for Greece cloud to lift so they know which way to lean. Euro lost 0.01% to $1.1204. Yen gained 0.2% to 80.88. Meaningless for both.

The bond bubble may have begun to burst. The 10 year treasury yield is bumping against the downtrend from 2007 and has staged a SERIOUS rally since 1 February, from 1.651% to 2.393%. 30 year bond yield has risen from 2.226% to 3.156% and is way above the 200 DMA (2.836%). When those yields start rising in earnest, the Fed is going to have a basement flooded with sewage, and find out just how clever they are at pumping.

Gold & silver won't break down, but they won't break up, either. Gold shaved off $1.10 today to land on $1,171.50. Silver gave up 4.5 cents for a 1580.8c Comex close.

Yes, it was a rotten week for gold. It lost 2.5% or $30. Silver lost 34 cents or 2.1%. But most of that loss fell on Monday for gold, and Tuesday for silver.

If gold closes below its last low, $1,162.10, then it will drop to someplace between there and $1,141.60. A lot of folks are expecting a big drop, say to $1,100 or lower. I don't see it. One reason is the buying support I suspect lurks just under this market. This week we have seen serious buyers come back with large orders. I don't solicit business, so this is spontaneous. So maybe gold sees a fast spike down, but not too long and not too far. Up above gold does nothing -- it's all meaningless noise -- until it climbs above $1,205.

What will a resolution in Greece do to gold? If Greece doesn't leave the euro, nothing much. Oh, gold might drop a little on the news, but all that safe-haven demand has been beaten out of gold, no doubt by the Nice Government Men, scared to death the Greek crisis might precipitate a enlightenment of the Mushrooms and a stampede into gold. If Greek did leave the euro, gold would get a boost. How long that lasts depends on the knock on effects of the Grexit.

Sivler keeps holding on above 1550 cents, where there's lateral support. Break that and silver might crumple to 1450c in a sudden spike, as suddenly over. Overhead silver must climb over 1640c to make any difference.

June & July are the time of the year for seasonal lows in gold & silver. I suspect those lows will be made by 15 July.

Y'all, my heart's about to break. I'm so tired of hearing the Confederate flag blamed for murder and racism and every bad thing by politicians wearing out their knees for votes and people too ignorant of history & truth to argue with. This is the same Gramscian consciousness molding campaign that was started in the early 1990s by people who make a living stirring up trouble between the races. Ignored and largely unreported in all these terrible events is the majestic and sublime Christian response by those robbed of their loved ones and by others in Charleston. THAT is the South that I love, and the Confederate flag has never stood for any other South, regardless how many lunatics, liars, and murderers have used it for their own purposes. Lawlessness & senseless bloodshedding is what 250,000 Confederate soldiers died to prevent.

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
25-Jun-15 Price Change % Change
Gold, $/oz 1,172.60 -1.10 -0.1
Silver, $/oz 15.85 -0.05 -0.3
Gold/Silver Ratio 73.967 -0.067 -0.1
Silver/Gold Ratio 0.0135 -0.0000 -0.3
Platinum 1,084.40 10.30 1.0
Palladium 679.15 -16.30 -2.3
S&P 500 1,585.30 1,172.60 284.1
Dow 17,890.36 -75.71 -0.4
Dow in GOLD $s 315.39 -1.01 -0.3
Dow in GOLD oz 15.26 -0.05 -0.3
Dow in SILVER oz 1,128.52 -1.57 -0.1
US Dollar Index 95.39 -0.03 -0.0
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SPOT GOLD: 1,172.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,205.99 1,213.02 1,213.02
1/2 AE 0.50 597.21 618.23 1,236.46
1/4 AE 0.25 301.53 314.98 1,259.90
1/10 AE 0.10 122.96 128.33 1,283.34
Aust. 100 corona 0.98 1,143.05 1,152.05 1,175.32
British sovereign 0.24 277.96 290.96 1,236.02
French 20 franc 0.19 220.45 224.45 1,202.21
Krugerrand 1.00 1,186.06 1,196.06 1,196.06
Maple Leaf 1.00 1,180.00 1,196.00 1,196.00
1/2 Maple Leaf 0.50 673.90 615.30 1,230.60
1/4 Maple Leaf 0.25 298.86 313.51 1,254.04
1/10 Maple Leaf 0.10 124.23 127.75 1,277.48
Mexican 50 peso 1.21 1,405.90 1,416.90 1,175.17
.9999 bar 1.00 1,176.10 1,184.00 1,184.00
SPOT SILVER: 15.81      
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 12,373.08 12,730.58 17.81
US 40% silver 1/2s 0.30 4,470.73 4,620.73 15.66
100 oz .999 bar 100.00 1,570.50 1,620.50 16.21
10 oz .999 bar 10.00 157.05 162.55 16.26
1 oz .999 round 1.00 15.91 16.41 16.41
Am Eagle, 200 oz Min 1.00 17.31 18.16 18.16
SPOT PLATINUM: 1,084.40      
Platinum Platypus 1.00 1,099.40 1,129.40 1,129.40
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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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