The Moneychanger
Daily Commentary
Monday, 31 August a.d. 2015 Browse the commentary archive

Stocks wore themselves out after two - three days' reversal. Bear market rallies look fierce, but meet a ceiling of selling and wilt. Dow, for instance, climbed almost to the downtrend line that had contained it almost 4 months before it collapsed through it on 21 August. S&P500 reached toward -- weakly -- support at about 2,040 that marked for it the same line.

Fierce bear market rallies often result when smug shorts get hit by a sudden rally and panic. I reckon fast rallies might also arise from the Nice Government Men of the Plunge Protection Team buying S&P500 futures, but there is also a galloping abundance and overplus of old bulls left who will buy any dip, convinced "it will come back." They will keep doing this all the way down until finally, at the bottom, they all throw in the towel. In a bear market, money returns to its rightful owner.

For the next few weeks, just remember this one fact about the stock market: the plunge ain't finished yet.

Dow in Gold & Dow in Silver both rose sharply last week as the stock market rallied, but today they resumed their fall. DiG closed 14.58 oz, well below its 200 day moving average (DMA) at 15.01 oz.

Dow in silver fell 0.83% to 1,132.06 oz, although above its 1,103.36 200 DMA. See it at

Both have given a downturn signal that can't be recalled.

Last week the US dollar, scrofulous spawn of central banking, rallied after its 145 basis point plunge on 24 August. Five day's rise brought it to the downtrend line. It barely closed above on Friday, dropped today 28 basis points and closed on that line, close to support at 95.50.

Absent some surge tomorrow, the dollar is shackled to a downtrend.

Euro rose 0.28% to $1.1211, but has negated the strength it showed on dollar weakness, even fallen back below its 200 DMA. Yen has done likewise, & today fell 0.39% to 82.47.

Europe meanwhile is completely powerless against an immigrant invasion. Their false values & self-hatred are leading them into final demographic suicide. The Hungarians had better have a lot of that razor tape fence wire, cause they're gonna need it.

West Texas Intermediate Crude rose again today, third day in a row. It has risen 23.6% in the last 3 days. Bear market rally or double bottom with March?

Silver & gold are blowing hot and cold out of both sides of their mouth. Silver rose 4.2 cents (0.3%) today to 1457.7c on Comex. Gold lost $1.50 (0.13%) to $1,131.60.

This says nothing. It's either fatal weakness or a pause before a run, but will make us guess.

Gold remains in the trading channel that has imprisoned it since January. In the middle of that channel is a downtrend line from the October 2012 high. Presently gold stands above that line, above its 20 DMA, and barely above its 50 DMA ($1,130.89). Until gold conquers $1,150 then $1,172, where it fell down last time, it spinneth only wheels.

On 29 August silver made a new intraday low at 1391c, then painted a key reversal the next two days, confirmed by a higher close today -- if no much higher. This only turns the motor on. Silver languishes below its moving averages, and has to top 1500c then 1572c. With stocks weak & falling there remains the chance they will try to suck metals into the black hole with them.

Swapping US 90% silver coin for 100 oz silver bars now fetches a 20% increase in ounces, although bar delivery is delayed four weeks. The US90% coin premium will disappear, so if you don't grab it you lose it.

Also, the Gold/Silver ratio just below 80:1, near the top of the 10 year range, begs a swap from gold into silver.

On 31 August 1920 John Lloyd Wright was issued a patent for Toy-Cabin Construction, also known as Lincoln Logs (as anyone born before video games could tell you.)

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
31-Aug-15 Price Change % Change
Gold, $/oz 1,131.60 -1.50 -0.13%
Silver, $/oz 14.58 0.04 0.29%
Gold/Silver Ratio 77.629 -0.328 -0.42%
Silver/Gold Ratio 0.0129 0.0001 0.42%
Platinum 1,010.10 4.10 0.41%
Palladium 601.55 -10.45 -1.71%
S&P 500 1,972.18 -16.69 -0.84%
Dow 16,528.03 -114.98 -0.69%
Dow in GOLD $s 301.93 -1.70 -0.56%
Dow in GOLD oz 14.61 -0.08 -0.56%
Dow in SILVER oz 1,133.84 -11.19 -0.98%
US Dollar Index 95.80 -0.28 -0.29%
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: 1,132.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,163.18 1,172.24 1,172.24
1/2 AE 0.50 577.12 597.45 1,194.89
1/4 AE 0.25 291.39 304.39 1,217.55
1/10 AE 0.10 118.82 124.02 1,240.20
Aust. 100 corona 0.98 1,101.29 1,110.29 1,132.72
British sovereign 0.24 268.61 281.61 1,196.32
French 20 franc 0.19 213.04 217.04 1,162.52
Krugerrand 1.00 1,152.99 1,162.99 1,162.99
Maple Leaf 1.00 1,142.60 1,156.60 1,156.60
1/2 Maple Leaf 0.50 651.25 594.62 1,189.23
1/4 Maple Leaf 0.25 288.81 302.97 1,211.88
1/10 Maple Leaf 0.10 120.06 123.45 1,234.53
Mexican 50 peso 1.21 1,357.27 1,368.27 1,134.83
.9999 bar 1.00 1,136.56 1,144.60 1,144.60
SPOT SILVER: 14.59      
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 13,363.35 13,720.85 19.19
US 40% silver 1/2s 0.30 4,112.30 4,262.30 14.45
100 oz .999 bar 100.00 1,484.00 1,509.00 15.09
10 oz .999 bar 10.00 147.40 152.40 15.24
1 oz .999 round 1.00 14.69 15.15 15.15
Am Eagle, 200 oz Min 1.00 16.09 17.59 17.59
SPOT PLATINUM: 1,010.10      
Plat. Platypus 1.00 1,025.10 1,055.10 1,055.10
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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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