The Moneychanger
Daily Commentary
Tuesday, 1 September a.d. 2015 Browse the commentary archive

Today's stock market action proved that last week's stock rally was all vine and no taters. Dow plunged 470.01 (2.84%) to 16,058.02 while the S&P500 slid 58.25 (2.95%) to 1,913.93.

Stocks opened and slid 400 points, plump! Balance of the day they traded sideways & lower without any enthusiasm or sign of recovery. Of course, they made no move to go lower, either, but then, after falling 450 points, they didn't really need to.

With silver & gold steady, today's stock dive took the Dow in Gold for another attempt at drowning. It lost 3.34% to close at G$291.27 gold dollars (14.09 troy ounces). 200 DMA floats above at G$310.08 (15.00 oz). Here's the chart,

The Dow in Silver fell S$43.53 (33.67 ounces) or 2.97% to S$1,420.13 silver dollars (1,098.38 oz), slap down against the uptrend line from August 2013 and below the 200 DMA (S$1,426.37 or 1,103.21 oz). Watch the last low at S$1,381.69 (1,068.65 oz), the last low. An acceleration is coming.

Scabby US dollar index closed beneath the downtrend line (from the August high at 98.43) and below 95.50 support. It lost 43 basis points (0.45%) to end at 95.43.

It would clear up the entire cosmic situation if the dollar would close below 93, giving us an equivocal "I am going to hell in a handbasket so don't look for no survivors" signal. As long as it stays above the 200 dma (now 94.86), can't be sure what it intends. Don't let this meditation take your eyes off the present trend, which is firmly down.

Euro rose 0.79% to $1.1300, but remains below its 200 DMA ($1.1332). This may technically be an uptrend, but if so it was born tard and raised lazy. No gumption, but then why should it have? Who but an insane speculator using borrowed money could find in the euro anything to love?

Yen looks better than the euro as a nearly dead man looks better than a corpse. It did gap up through its 200 DMA today 1.25% to 83.50. Maybe this time 'twill find some traction.

WTIC slowed its upward trajectory today with an 8.24% fall to $44.19/barrel. It is above its 20 dma (42.65) but hit the 50 DMA yesterday after rising 27% in 3 days. That accounts for today's ricochet. 200 DMA is above at 53.68. Copper is also trying to break out skyward. By the way, that 3 days is the oil market's biggest jump in 25 years.

Gold gained $7.10 (0.6%) to close Comex at $1,138.70. Silver inched up 3.6 cents (0.25%) to 1461.3c.

Gold is slowly but steadily gaining. Today it left the 50 DMA (1,129.97) behind as it moved up, but stopped cold when it hit the support/resistance line at $1,150 from the November low through the March low. That was also where gold broke down in July. Real test will come at the last high ($1,170) where gold failed.

Silver lies behind the eight ball. Yes, last week it made a new low & then a key reversal upwards, but it still is lollygagging below its 20 (1493c) & 50 (1505c) day moving averages. And it is rising on declining volume, which is like watching your gas guage needle drop.

I am not particularly thrilled, either, to see the Comex close Gold/Silver Ratio at 77.924. Silver is weak against gold right now, & any further weakness would send the ratio even higher.

Silver & gold are both acting mealy-mouthed when they need to show some brass. At least the dropping dollar adds something in their favor.

On 1 September 1715 Louis XIV of France, the Sun King, died after reigning 72 years. His thirst for show left France bankrupt. Trying to escape that bankruptcy a few years later, the regent the Duke of Orleans listened to the schemes of Scottish adventurer John Law and gave Law a charter for a bank. Law's bank, which functioned like a central bank, and stock market manipulations led to a hyperinflation and stock market boom & collapse. The more things change, the more they remain the same.

On 1 September 1870 Napoleon III was captured at the Battle of Sedan. It was the end of his empire.

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
1-Sep-15 Price Change % Change
Gold, $/oz 1,138.70 7.10 0.63%
Silver, $/oz 14.61 0.04 0.25%
Gold/Silver Ratio 77.924 0.295 0.38%
Silver/Gold Ratio 0.0128 -0.0000 -0.38%
Platinum 1,007.60 -2.50 -0.25%
Palladium 578.50 -23.05 -3.83%
S&P 500 1,913.93 -58.25 -2.95%
Dow 16,058.02 -740.01 -4.41%
Dow in GOLD $s 291.52 -15.35 -5.00%
Dow in GOLD oz 14.10 -0.74 -5.00%
Dow in SILVER oz 1,098.89 -53.48 -4.64%
US Dollar Index 95.43 -0.45 -0.47%
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: 1,138.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,169.03 1,178.14 1,178.14
1/2 AE 0.50 580.02 600.45 1,200.91
1/4 AE 0.25 292.85 305.92 1,223.67
1/10 AE 0.10 119.42 124.64 1,246.44
Aust. 100 corona 0.98 1,106.84 1,115.84 1,138.38
British sovereign 0.24 269.97 282.97 1,202.06
French 20 franc 0.19 214.11 218.11 1,168.26
Krugerrand 1.00 1,158.79 1,168.79 1,168.79
Maple Leaf 1.00 1,148.30 1,162.30 1,162.30
1/2 Maple Leaf 0.50 654.52 597.61 1,195.22
1/4 Maple Leaf 0.25 290.27 304.50 1,217.98
1/10 Maple Leaf 0.10 120.66 124.07 1,240.75
Mexican 50 peso 1.21 1,364.10 1,375.10 1,140.50
.9999 bar 1.00 1,142.28 1,150.30 1,150.30
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 13,395.53 13,753.03 19.24
US 40% silver 1/2s 0.30 4,110.83 4,260.83 14.44
100 oz .999 bar 100.00 1,483.50 1,508.50 15.09
10 oz .999 bar 10.00 147.35 152.35 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: 1,007.60      
Plat. Platypus 1.00 1,022.60 1,052.60 1,052.60
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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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