The Moneychanger
Daily Commentary
Wednesday, 22 July a.d. 2015 Browse the commentary archive

Sooner or later, all hidden things are made known. In early (Asian time) trading on 19 July) somebody dumped $2.7 billion in sales orders into the futures market, causing gold's flash crash. Nothing new about this, whether it is simply predatory High Frequency Traders or Nice Government Men. Read about it on Zero Hedge at http://bit.ly/1LDbVMn

Remember: these shenanigans only work at the margin, & passingly. Manipulators can't alter primary market trend, and if silver & gold weren't already weak & trending downward, these tricks would hardly work at all. Feels like being in a prison camp. As long as they have you in the camp, you can't hit the guards, but one day, one day, you'll get out. It will be payday someday.

Daily chart says that the biggest gold drop came after closing time in London, i.e., midnight Eastern (4 hours behind London), from $1,100 to $1,094.50. Gold traded flat until New York opened. About 9:00 it gapped down to the near the day's low, $1,088, reached back up to $1,092.50, then dropped to the low of $1,085.60 about 11:30. Off that low it climbed back to $1,095, but ended Comex at $1,091.40, down $12 (1.1%). That took gold's RSI back to 19.44, down from yesterday's 21.16 but up from Monday's 18.46.

Monday gold punched through that 3 Standard deviation lower Bollinger Band. That sort of touch is usually good for triggering at least a little relief rally, but hasn't done anything yet. Gold needs to post some convincing reversal sign. Go look: http://schrts.co/lPShXo

Silver's chart diverges from gold's right plainly. First, on the five day chart, silver's low occurred on Monday (before New York Trading). The rest of the week has been flat. Today's high reached 1486c, the low only 1459c. Silver lost 5.5 cents today (0.4%) to a Comex close at 1471.4c.

Yet silver has still given no unequivocal witness of turning up. The gold silver ratio dropped again today, down 0.72% to 74.174 ounces of silver to one ounce of gold. This is three days below the 20 DMA (75.14) and post-2011 uptrend line and not much higher than the 50 DMA (73.40) or 200 DMA (73.09). This falling ratio makes little sense unless it is telegraphing a coming upturn in metals. http://schrts.co/kh9gOy

Stocks lost ground again. Dow backed up 69.42 (0.39%) while the S&P50 crawfished 5.19 (0.24%) to 2,114.02. That leaves the Dow below its 50 DMA (17974.80) and 20 DMA (17851.04). S&P500 remains above both. Dow Composite never rose as high as the 200 DMA in this recent rally, & turned down 4 days ago. Nasdaq Composite and 100 appear to have turned solidly down.

US Dollar Index regained 24 basis points (0.25%) to close at 97.67, but this is like unbreaking eggs. Once you break an uptrend, the correction has to complete itself before another upleg can begin. Two days ain't enough. Dollar Index may rise higher later, but for a few days it will be doing penance for previous pride. I'm not going to talk about the euro & yen, they're just too dull to stand. Euro lost 0.18% to $1.0918 while the yen lost 0.09%.

Bonds have been rising the last seven days, so somebody is rolling out of risk and into safety. Listen, y'all, I know it sounds utterly laughable that anybody would seek safety in US dollars, much less US government bonds. I'm not offering the statement for the truth of the matter, but for their state of mind.

If, as some say, we are locked in deflation, you couldn't prove it by copper or oil today, since both rose.

On 22 July 1934 outside Chicago's Biograph Theater, John Dillinger, "Public Enemy No. 1," was mortally wounded by FBI agents.

On 22 July 1937 the US senate rejected Franklin Roosevelt's proposal to make himself dictator for life by rejecting his plan to pack the Supreme Court.

On 22 July 1298 English King Edward I defeated the Scots under William Wallace at the Battle of Falkirk.

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
22-Jul-15 Price Change % Change
Gold, $/oz 1,091.40 -12.00 -1.09%
Silver, $/oz 14.71 -0.06 -0.37%
Gold/Silver Ratio 74.174 -0.536 -0.72%
Silver/Gold Ratio 0.0135 0.0001 0.72%
Platinum 982.00 -4.40 -0.45%
Palladium 625.75 -2.70 -0.43%
S&P 500 2,114.02 -5.19 -0.24%
Dow 17,849.87 -69.42 -0.39%
Dow in GOLD $s 338.09 2.38 0.71%
Dow in GOLD oz 16.35 0.11 0.71%
Dow in SILVER oz 1,213.12 -0.18 -0.02%
US Dollar Index 97.67 0.25 0.26%
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: 1,094.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,128.12 1,132.50 1,132.50
1/2 AE 0.50 557.53 577.19 1,154.38
1/4 AE 0.25 281.50 294.07 1,176.27
1/10 AE 0.10 114.79 119.81 1,198.15
Aust. 100 corona 0.98 1,065.03 1,074.03 1,095.72
British sovereign 0.24 259.51 272.51 1,157.63
French 20 franc 0.19 205.82 209.82 1,123.83
Krugerrand 1.00 1,113.90 1,123.90 1,123.90
Maple Leaf 1.00 1,102.20 1,118.20 1,118.20
1/2 Maple Leaf 0.50 629.17 574.46 1,148.91
1/4 Maple Leaf 0.25 279.02 292.70 1,170.79
1/10 Maple Leaf 0.10 115.99 119.27 1,192.68
Mexican 50 peso 1.21 1,312.57 1,323.57 1,097.76
.9999 bar 1.00 1,098.03 1,106.20 1,106.20
SPOT SILVER: 14.38      
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 12,283.70 12,784.20 17.88
US 40% silver 1/2s 0.30 4,050.35 4,200.35 14.24
100 oz .999 bar 100.00 1,428.00 1,478.00 14.78
10 oz .999 bar 10.00 142.80 148.30 14.83
1 oz .999 round 1.00 14.48 14.98 14.98
Am Eagle, 200 oz Min 1.00 15.88 16.73 16.73
SPOT PLATINUM: 982.00      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 997.00 1,027.00 1,027.00
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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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