The Moneychanger
Weekly Commentary
Monday, 17 August a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  7-Aug-15 17-Aug-15 Change % Change
Silver, cents/oz. 1,481.60 1,529.50 47.90 3.2
Gold, dollars/oz. 1,094.10 1,118.60 24.50 2.2
Gold/silver ratio 73.846 73.135 -0.711 -1.0
Silver/gold ratio 0.0135 0.0137 0.0001 1.0
Dow in Gold Dollars (DIG$) 328.25 324.24 -4.01 -1.2
Dow in gold ounces 15.88 15.68 -0.19 -1.2
Dow in Silver ounces 1,172.61 1,147.12 -25.49 -2.2
Dow Industrials 17,373.38 17,545.18 171.80 1.0
S&P500 2,077.57 2,102.45 24.88 1.2
US dollar index 97.62 96.80 -0.82 -0.8
Platinum 961.80 999.50 37.70 3.9
Palladium 596.40 613.30 16.90 2.8

Mercy! I have just spent five days around free, intelligent, and deliberate folks. That's just about the most energizing thing in the world. When y'all get down and start thinking you're the only one left who has a lick of sense & who thinks like you do (like an adult), just remember that there are millions of free, intelligent, and deliberate folks out there. It's just hard to find 'em with all the media, government, and other doofuses standing in the way. Don't y'all lose hope. They're there, and they're building.

Y'all, there some things Nature just don't do. You take them stocks now. Last Wednesday they opened up like an anvil shoved out of a 747 Jumbo Jet, fell nearly 300 points, but closed up 276.70 points from there. Then today the opened and fell 135 points like the guest of honor at a hanging, then somehow came back -- within about an hour -- to close at 203.46 later.

Mythology aside, markets don't do that. When they break like that, they keep on breaking. I am saying that if you were looking for the Nice Government Men's fingerprints, you wouldn't have to wear yourself out dustin' to find 'em. Stinks worse than old cat food.

Sad story is, by holding the market up and preventing the wash-out, the yankee government is only going to make the eventual crash & panic much worse, and wound the economy deeper, than if they'd just took their fat fingers off in the first place.

Dow Industrials "rose" today 67.78 (0.39%) to 17,545.18. S&P500 added 10.91 (0.52%) to 2,102.45. Dow stands way below its 200 DMA (17,825) and is trying to fall through short term support. S&P500 is trying to close below its 200 DMA. Both have formed rounding tops. S&P500 close below 2,039 and Dow below 17,038 will put the pedal to the metal downside.

Dow in Gold and Dow in Silver have done everything I wanted 'em to, except crashing through their 200 day moving averages below, but they'll get to that pretty soon. Every indicator is flashing lower prices.

Dow in gold today closed down 0.8% to 15.69 oz, and has bounced above its 50 DMA. Doesn't matter a little bit, just look at that broken chart.

Dow in silver closed 1,147.49 oz today, not far above the 200 DMA (1,102.60).

I remind y'all that these two indicators tell us -- reliably and in advance -- whether stocks or silver & gold will outperform. That long time since 2011 that stocks have outperformed metals has ended with the throwover tops this summer. Time to swap stocks for silver & gold.

US Dollar index has clearly topped & changed trend downward, although in the last three days it has bounced up off the 50 DMA. Dow below the dollar will begin falling like a meteor when it passes the last low at 95.945.

Of course the falling dollar has meant a rising euro. Given the euro's internal corruption, that wouldn't be true in a sane world, but we don't live in a sane monetary world. 7 July market the beginning of the euro's rise when it crawled through its 20 DMA, then rose, even gapped the day the Chinese roiled the markets with their devaluation, to $1.112.15. It has since backed down, but only to fall to the downtrend line that had ruled it so long. In other words, the return for the final kiss good-bye before take-off.

Bond and T-note yields are trying to fall through their 200 DMAs, so bond prices are rising, but without much speed or conviction. Among the inflation markets, copper seems to have bottomed & crude oil has stopped falling (maybe).

Silver today closed Comex 8.5 cents higher at 1529.5c. Gold climbed $5.7 to $1,118.60.

The first leg of the metal's rally was completed with those highs on 12 August. A 50% correction would push gold back to $1,103, roughly also the level of the 50 DMA (1,098). A like silver correction would pull silver down to 1496c. Might not see corrections that big because of the upward force of the rally, but (1) it's possible & (2) should bottom within the next week, then begin rising again. All indicators call for higher prices after a little time to sweat and cool off. Gold chart's at Silver's chart is here,

Down at 73.135 today, the gold/silver ratio is confirming the silver rally by hiding below its 200 DMA. Remember, the gold/silver ratio should fall during rallies. Speaking in bureaucratese, it is not insignificant (that is, it signifies something) that the ratio has fallen through its uptrend line from the April 2011 low. Fact is, it signifies that gold and silver have completed their long correction.

Once they've finished this little correction, Silver will again attack 1560c & gold $1,140. Breaching those lines, support turned resistance, will spur the rally harder.

Silver & gold are giving y'all one last chance to buy 'em before they take off.

On 17 August 1786 was born on Greene County, Tennessee, David Crockett. He fought in the Creek War and settled in a town about 25 minutes from where I'm sitting, Lawrenceburg. He set up a water powered cotton spinning mill, but a flood took it out. Elected to congress, he finally ran afoul of Polk and the Jackson political machine and lost an election. Last meeting he held with his constituents he allegedly said, "Y'all can all go to hell, and I'm going to Texas!" For Davy that would not work out well, as he lost his life defending the Alamo, but for Texas the stand of the men there, mostly Tennesseans, meant victory and independence.

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
17-Aug-15 Price Change % Change
Gold, $/oz 1,107.60 3.40 0.3
Silver, $/oz 15.28 -0.01 -0.1
Gold/Silver Ratio 72.482 0.223 0.3
Silver/Gold Ratio 0.0138 -0.0000 -0.1
Platinum 995.50 6.80 0.7
Palladium 613.30 -3.70 -0.6
S&P 500 2,084.07 -9.70 -0.5
Dow 17,565.18 67.78 0.4
Dow in GOLD $s 327.83 0.29 0.1
Dow in GOLD oz 15.86 0.01 0.1
Dow in SILVER oz 1,149.48 5.03 0.4
US Dollar Index 97.23 0.03 0.0
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: 1,116.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,138.83 1,155.58 1,155.58
1/2 AE 0.50 568.91 588.95 1,177.91
1/4 AE 0.25 287.24 300.06 1,200.24
1/10 AE 0.10 117.13 122.26 1,222.57
Aust. 100 corona 0.98 1,085.64 1,094.64 1,116.75
British sovereign 0.24 264.80 277.80 1,180.10
French 20 franc 0.19 210.01 214.01 1,146.30
Krugerrand 1.00 1,136.60 1,146.60 1,146.60
Maple Leaf 1.00 1,126.50 1,140.50 1,140.50
1/2 Maple Leaf 0.50 641.99 586.16 1,172.33
1/4 Maple Leaf 0.25 284.71 298.66 1,194.66
1/10 Maple Leaf 0.10 118.35 121.70 1,216.99
Mexican 50 peso 1.21 1,339.32 1,350.32 1,119.95
.9999 bar 1.00 1,120.41 1,128.50 1,128.50
SPOT SILVER: 15.30      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25.00 27.00 35.29
VG+ Peace dollar 0.77 20.00 22.00 28.76
90% silver coin bags 0.72 13,152.43 13,509.93 18.90
US 40% silver 1/2s 0.30 4,320.28 4,470.28 15.15
100 oz .999 bar 100.00 1,554.50 1,579.50 15.80
10 oz .999 bar 10.00 154.45 159.45 15.95
1 oz .999 round 1.00 15.40 15.86 15.86
Am Eagle, 200 oz Min 1.00 16.80 18.30 18.30
SPOT PLATINUM: 995.50      
Platinum Platypus 1.00 1,010.50 1,040.50 1,040.50
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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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