The Moneychanger
Daily Commentary
Tuesday, 28 July a.d. 2015 Browse the commentary archive

Good evenin', Mushrooms! It's gold & silver futures options expiry today, so you could expect that metals weren't going anywhere. No, they had to be kept down just one day so those barely out of the money options would expire worthless. They use the same playbook every month. I'm glad that's behind us.

Silver & gold flatlined. Gold lost 30 cents to $1,096.20 on Comex; silver gave back 3.7 cents to 1463.1.

Ranges were very tight, 1468 - 1451c for silver and $1,098.20 to $1,090.70 for gold. I can't promise y'all metals will rise tomorrow, but that's what I expect. Same rules apply: gold must not close below $1,090 nor silver below 1440c. Upside gold must o'erleap $1,140 and silver 1550c to prove they have any muscle left.

Dow Industrials rose 189.68 (1.09%) today to 17,630.27. S&P500 also rose, 25.61 (1.24%) to 2,093.24.

I ain't impressed. In five days it lost 660.99. It'll take more than a single day gaining 189.68 to fix that.

Likewise the US dollar index rose 26 basis points to 96.86. So what? Remains below its 20 day moving average.

Delays in physical silver deliveries on one ounce rounds and now even 100 oz bars have stretched out to three weeks. US 90% premium has risen to $3.30 over spot at wholesale. Now gold coins have caught the infection with rising prices and delayed deliveries. What do y'all reckon that means?

The door into silver & gold is an exceedingly low and narrow passage. When too many people rush it all at once, some don't get through. Y'all bear that in mind.

On 28 July 1794 the Jacobin leader Robespierre and 22 other leaders of the Terror were guillotined to thunderous cheers in Paris. After they had guillotined so many others, the Revolution finally ate her own children.

On 28 July 1866 the metric system became the legal measurement system in the US, and we've been ignoring it ever since. Why? 'Tain't human. Tain't to the human measure. Everybody knows an inch is as wide as your thumb, a foot as long as yours, a yard stretches from your nose to your fingertip, but what's a meter? Why, one ten-millionth of the distance from the equator to the North Pole. Sounds like the sort of "scientific" nonsense that would come out of the French Revolution, and sure enough it did. It was always interesting to me when I lived in Germany that folks at the meat market didn't order "grams", but a Pfund or a halbes Pfund (pound or half pound), & I don't think I every heard anybody order a kilo of salami.

I tell y'all, metric ain't human.

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
28-Jul-15 Price Change % Change
Gold, $/oz 1,096.20 -0.30 -0.03%
Silver, $/oz 14.63 -0.04 -0.25%
Gold/Silver Ratio 74.923 0.169 0.23%
Silver/Gold Ratio 0.0133 -0.0000 -0.22%
Platinum 987.80 -2.70 -0.27%
Palladium 620.60 8.50 1.39%
S&P 500 2,093.25 25.61 1.24%
Dow 17,630.27 189.68 1.09%
Dow in GOLD $s 332.47 3.67 1.12%
Dow in GOLD oz 16.08 0.18 1.12%
Dow in SILVER oz 1,204.99 15.97 1.34%
US Dollar Index 96.86 0.26 0.27%
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: 1,094.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,128.22 1,132.60 1,132.60
1/2 AE 0.50 557.58 577.24 1,154.49
1/4 AE 0.25 281.52 294.09 1,176.37
1/10 AE 0.10 114.80 119.83 1,198.26
Aust. 100 corona 0.98 1,065.12 1,074.12 1,095.82
British sovereign 0.24 259.53 272.53 1,157.73
French 20 franc 0.19 205.84 209.84 1,123.93
Krugerrand 1.00 1,117.28 1,127.28 1,127.28
Maple Leaf 1.00 1,102.30 1,118.30 1,118.30
1/2 Maple Leaf 0.50 629.22 574.51 1,149.02
1/4 Maple Leaf 0.25 279.05 292.73 1,170.90
1/10 Maple Leaf 0.10 116.00 119.28 1,192.79
Mexican 50 peso 1.21 1,312.69 1,323.69 1,097.86
.9999 bar 1.00 1,098.13 1,106.30 1,106.30
SPOT SILVER: 14.64      
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 12,469.60 12,827.10 17.94
US 40% silver 1/2s 0.30 4,127.05 4,277.05 14.50
100 oz .999 bar 100.00 1,454.00 1,504.00 15.04
10 oz .999 bar 10.00 145.40 150.90 15.09
1 oz .999 round 1.00 14.74 15.24 15.24
Am Eagle, 200 oz Min 1.00 16.14 16.99 16.99
SPOT PLATINUM: 987.80      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,002.80 1,032.80 1,032.80
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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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