The Moneychanger
Daily Commentary
Thursday, 3 September a.d. 2015 Browse the commentary archive

Sorry I missed y'all yesterday evening, but I had to finish my monthly Moneychanger for paid subscribers. By the way, I will be on vacation next week so will not be sending any commentaries.

Sorry, scrofulous, scabby US dollar index added to the constarnation & confusion today by rising instead of plunging. Touched the 20 DMA and closed above the downtrend line as well as the 20 DMA. Gained 58 basis points (0.6%) to 96.42.

I am neither concerned nor impressed. Every day stocks rally, the scabby dollar, world parasite, also rallies. Two might as well be the famous Siamese Twins of Mt. Airy, Chang & Eng Bunker (no kin to Archie Bunker). That leads me to suspect next time stocks drop, dollar will, too. And stocks are liable to drop tomorrow.

Dow rose 129.14 (0.79%) to 16,480.52, on its way to 14,200 & lower. S&P500 gained 16.17 (0.83%) to 1,965.03. I am still seeing people call this a "correction" and a great time to buy. People like that would pull the wings off'n flies or set cats' tails on fire or feed a neighbor dog pizened meat. No conscience a-tall.

Gold lost $8.80 (0.77c) to close Comex at $1,123.70. Silver gained 4.1 cents (0.3%) to end at 1470.2c.

Clearly, silver & gold ain't going nowhere. Today gold closed below the uptrend line and below the intertwined 20 & 50 day moving averages, something that cheers my heart as much as seeing 2,500 Sioux in war paint cheered Custer's. Actually, 'tain't that bad. It's probably just the last leg down of the correction to the first leg up, and will probably lodge about $1,110 & turn round. But what do I know, a nat'ral born durn fool from Tennessee?

Silver's strength relative to gold is seen in the Gold/Silver Ratio, which today fell 1.1% to 76.432. That's like getting somebody to scratch your back: enough to tease you, but not enough to do any good. Needs to fall under 75 and keep falling.

Watching silver rise confers all the burning sport & excitement of watching snails race. My, my, four point one cents up today, my, o, my. That silver's really lighting a shuck.

Not much point in jawin' about this middle ground. It's all noise until silver crosses 1500c and lights out. Till then it's vulnerable to another tumble.

Personally, I believe both silver & gold have bottomed, but they're awfully mean to their friends here lately. Course, they can't hold a candle to what stocks've done to THEIR friends. Reckon those friends will start changing their minds here pretty soon.

On 3 September 1783 the representatives of the United Colonies & Great Britain signed the Treaty of Paris that ended the American Revolution. The treaty begins, "In the name of the most holy, blessed, & undivided Trinity, Amen." They don't make treaties like that any more.

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
3-Sep-15 Price Change % Change
Gold, $/oz 1,123.70 -8.80 -0.78%
Silver, $/oz 14.70 0.04 0.28%
Gold/Silver Ratio 76.432 -0.814 -1.05%
Silver/Gold Ratio 0.0131 0.0001 1.06%
Platinum 1,009.30 -3.50 -0.35%
Palladium 580.60 -2.20 -0.38%
S&P 500 1,965.03 16.17 0.83%
Dow 16,480.52 129.14 0.79%
Dow in GOLD $s 303.18 4.71 1.58%
Dow in GOLD oz 14.67 0.23 1.58%
Dow in SILVER oz 1,120.97 5.67 0.51%
US Dollar Index 96.42 0.58 0.61%
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: 1,123.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,157.51 1,163.13 1,163.13
1/2 AE 0.50 572.63 592.80 1,185.61
1/4 AE 0.25 289.12 302.02 1,208.09
1/10 AE 0.10 117.89 123.06 1,230.56
Aust. 100 corona 0.98 1,092.74 1,101.74 1,123.99
British sovereign 0.24 266.53 279.53 1,187.45
French 20 franc 0.19 211.39 215.39 1,153.65
Krugerrand 1.00 1,144.03 1,154.03 1,154.03
Maple Leaf 1.00 1,133.80 1,147.80 1,147.80
1/2 Maple Leaf 0.50 646.19 590.00 1,179.99
1/4 Maple Leaf 0.25 286.57 300.62 1,202.47
1/10 Maple Leaf 0.10 119.12 122.49 1,224.94
Mexican 50 peso 1.21 1,345.37 1,356.37 1,124.96
.9999 bar 1.00 1,127.73 1,135.80 1,135.80
SPOT SILVER: 14.67      
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 13,599.30 13,956.80 19.52
US 40% silver 1/2s 0.30 4,135.90 4,285.90 14.53
100 oz .999 bar 100.00 1,492.00 1,517.00 15.17
10 oz .999 bar 10.00 148.20 153.20 15.32
1 oz .999 round 1.00 14.77 15.23 15.23
Am Eagle, 200 oz Min 1.00 16.17 18.17 18.17
SPOT PLATINUM: 1,009.30      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,024.30 1,054.30 1,054.30
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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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