The Moneychanger
Daily Commentary
Thursday, 16 July a.d. 2015 Browse the commentary archive

Jay Taylor interviewed me on 14 July about all the fun I had playing with the government 25 years ago. Its about 25 minutes long on his website, or on YouTube, Listen, I don't look nearly as bad as that picture makes me look.

Today's markets:

Well, everybody in the gold & silver world is long faced & depressed. That's good, that's the kind of sentiment we need at a turnaround. Today gold scraped off another $3.40 (0.3%) to $1,143.80 while silver dipped 0.4% or 6.4 cents to 1496.4. It ain't the end of the world yet. That came in 1865.

Gold traded today to a lower low for the move ($1,140.60) by about $3.50. Looking at yesterday's V-bottom low and decline into today's slightly lower V-bottom, all those are places gold could turn around. More likely it will wait for $1,130, the low from November 2014. That's $13 from here.

Silver has followed gold's pattern the last two days, with a slightly lower V-bottom today (1485c). Most obvious target from the chart is that 7 July intraday low at 1462c, maybe a dime lower. If it breaks that, 'twould be bad, but volume is not rising on this fall, with silver or gold, and that's a plus.

I can testify that we are experiencing HUGE increase in physical demand at these prices.

Gold/Silver ratio refuses to rise as metal's fall -- odd, and might point to a turnaround. Ratio today closed Comex at 76.436, up a fraction from yesterday but not near the 7 July high.

I remain unrepentantly clinging to my interpretation that we are seeing seasonal lows that mark the convergence of two very long cycles and the bottom of the long bear phase that began in 2011. Don't bother telling me it wracks your nerves. Mine are already shot, but I am buying in the teeth of 'em.

Stocks rose again today. Dow added 70.08 (0.4%) to 18,120.25 & the S&P500 picked up 16.89 (0,8%) to 2,124.29. Now both indices have met the downtrend from their last two highs. What happens next? Stocks might turnaround tomorrow, or rise a few more days even to new nominal high, say, 2,140 & 18,400.

Dow in gold rose to a new high today, 15.84, 1.7% above its March high at 15.581. Dow in silver Hit 1,209.31 oz. These new highs are what you would expect if metals are making seasonal lows, plus the whole carnival of propaganda about deflation, Greece solved, Chinese stock market stabilized, & the US economy a-boomin'. Hard to twist your head around that way to look at it from the contrary viewpoint, but that's the only way to penetrate to the truth.

US dollar index rose 49 basis points (0.5%) to 97.77. That has passed the last high (97.45) and is working on the May high (97.88). This rising dollar also belongs to the deflation scare. Dollar is due for another cyclical high in August. Euro fell 0.66% to $1.0876 and the Yen lost 0.31% to 80.55 cents/Y100.

Seems a naturalized Kuwaiti citizen working for ISIS today opened fire at a naval center in Chattanooga & killed four US Marines & wounded a police officer. It is loony to let all these immigrants flood into the country, & looks loonier still when you consider how much damage a few sleepers could do in the US. Makes a concealed carry permit look like the only sane path. Pray for the families of those victims.

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
16-Jul-15 Price Change % Change
Gold, $/oz 1,147.20 -6.10 -0.53%
Silver, $/oz 15.03 -0.27 -1.75%
Gold/Silver Ratio 76.338 0.934 1.24%
Silver/Gold Ratio 0.0131 -0.0002 -1.22%
Platinum 1,012.10 -9.50 -0.93%
Palladium 630.95 -10.45 -1.63%
S&P 500 2,107.40 -1.55 -0.07%
Dow 18,120.25 70.08 0.39%
Dow in GOLD $s 326.52 2.98 0.92%
Dow in GOLD oz 15.80 0.14 0.92%
Dow in SILVER oz 1,205.77 25.63 2.17%
US Dollar Index 97.77 0.49 0.50%
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: 1,144.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,179.57 1,184.14 1,184.14
1/2 AE 0.50 582.98 603.51 1,207.03
1/4 AE 0.25 294.35 307.48 1,229.91
1/10 AE 0.10 120.03 125.28 1,252.79
Aust. 100 corona 0.98 1,113.60 1,122.60 1,145.27
British sovereign 0.24 271.34 284.34 1,207.91
French 20 franc 0.19 215.21 219.21 1,174.11
Krugerrand 1.00 1,164.69 1,174.69 1,174.69
Maple Leaf 1.00 1,152.10 1,168.10 1,168.10
1/2 Maple Leaf 0.50 657.86 600.65 1,201.31
1/4 Maple Leaf 0.25 291.75 306.05 1,224.19
1/10 Maple Leaf 0.10 121.27 124.71 1,247.07
Mexican 50 peso 1.21 1,372.43 1,383.43 1,147.41
.9999 bar 1.00 1,148.10 1,156.10 1,156.10
SPOT SILVER: 14.96      
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 12,698.40 13,055.90 18.26
US 40% silver 1/2s 0.30 4,221.45 4,371.45 14.82
100 oz .999 bar 100.00 1,486.00 1,536.00 15.36
10 oz .999 bar 10.00 148.60 154.10 15.41
1 oz .999 round 1.00 15.06 15.56 15.56
Am Eagle, 200 oz Min 1.00 16.46 17.31 17.31
SPOT PLATINUM: 1,012.10      
Plat. Platypus 1.00 1,027.10 1,057.10 1,057.10
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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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