The Moneychanger
Weekly Commentary
Monday, 14 September a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  8-Sep-15 14-Sep-15 Change % Change
Silver, cents/oz. 1,475.00 1,435.70 -39.30 -2.7
Gold, dollars/oz. 1,120.40 1,107.90 -12.50 -1.1
Gold/silver ratio 75.959 77.168 1.209 1.6
Silver/gold ratio 0.0132 0.0130 -0.0002 -1.6
Dow in Gold Dollars (DIG$) 304.30 305.46 1.16 0.4
Dow in gold ounces 14.72 14.78 0.06 0.4
Dow in Silver ounces 1,118.15 1,140.28 22.13 2.0
Dow Industrials 16,492.68 16,370.96 -121.72 -0.7
S&P500 1,969.41 1,953.03 -16.38 -0.8
US dollar index 95.99 95.39 -0.60 -0.6
Platinum 1,002.10 955.70 -46.40 -4.6
Palladium 585.70 587.35 1.65 0.3

My vacation was very restful. We went to one of the sea islands off South Carolina. I went out the first day & got my sunburn, so I got that done early in the week & got to spend the rest of the time with my family, doing nothing much, & visiting with an old friend.

Last week while I was vacationing, silver & gold dipped steadily lower. Stocks teased, rose, then lost their gains. US dollar index lost ground, platinum took a beating, & palladium held firm.

Looks like the Fed's chickens are coming home to roost, & somebody might wind up covered in chicken manure. After teasing markets for more than a year, now looms the fabled September FOMC meeting when the Fed might/maybe/perhaps raise interest rates. If they raise rates, stocks crater. If they don't raise rates, the dollar craters, taking the bond market with it, a bond market that dwarfs the stock market. What's Mother Yellen, who has never yet successfully run a hot dog stand, to do? Probably raise rates a tiny quarter percent. No, it is not possible to pity the Fed in the least. Frankly, I'm having trouble fighting off a severe attach of Schadenfreude.

Meanwhile, markets are frozen, waiting for the FOMC. Silver & gold eroded last week, but maybe the interest rate news will be good news for metals, since the thing oppressing them has probably been the threat of a rate rise & hence a higher dollar. Remember the pattern lately has been "stocks sink, dollar sinks with them." Thus the magnetism of stocks might take the dollar down with them.

But this week makes little difference in the long term, since the cake is already baked. Stocks will suffer a bloody wound this month, the peak has passed, & the next five years or so will. shave ten thousand points off the Dow. This will happen whether the Fed raises interest rates 0.25%, 2.5%, or 25%. And silver & gold will benefit from the financial fear.

Dow has painted out a flag or pennant which promises to fall to 14,000. Nothing changed last week. Neither the Dow nor the S&P500 could even climb over the 20 DMA. Today the Dow slipped 62.13 to 16,370.96, down 0.38%. S&P500 lost 8.02 (0.41%) to 1,953.03.

Weakness in metals raised the Dow in Gold and Dow in Silver last week, but it was a "tale told by an idiot, full of sound and fury, signifying nothing." Nothing changed. Both indicators peaked in July, both markets have broken down, both will fall much lower. Charts are here, and here,

US dollar index last week looked like a Poland China hog trying to play piano. Spent most of the week moving lower, and ended wedged between its 200 DMA (95.18) and 20 DMA (95.18). Dollar's intention will not be plain until it sinks below 93 or rises above 96.6. Today the dollar index rose 20 basis points to 95.39.

The euro lost 0.1% to $1.1318. Interesting to watch the European Elite trying to commit suicide-by-immigration for the whole continent. Europe has so succumbed to its self-hatred that it's like a man who can't even close the door in his own house and tell the guests it's time to go home. All was a sentimental gush until suddenly yesterday the Germans slammed shut their borders. Somebody must have figured out what it was going to cost to house/educate/give welfare to all those immigrants, and suffered a moment of sanity. And for folks who think the Hungarians are mean-spirited for not letting 800,000 immigrants park there, I remind you that number would amount to about 9% of Hungary's total population.

Meanwhile the Japanese yen rose 0.35% to 83.22. I don't reckon they'll be taking in many immigrants, although their birth rate is so low that they have trained one young child to turn out the lights after all the old people pass away. He'll be the last Japanese left.

Today gold rose $4.40 to $1,107.90 while silver lost 13.3 cents to 1435.7c.

Last week gold fell until it hit the uptrend line from its July low. If I'm looking at it right, that completed the correction that began with the August high at $1,169.80. Therefore any price around here is a low risk buy. In my nat'ral born durn Tennessee fool opinion, the Fed's announcement, raise rates or not, will help gold and silver because it will remove that uncertainty and show the Fed for the ancient, toothless hamster it really is. Y'all can look at the gold chart here,

Silver last week & today twice tested support about 1433 & passed the test. Today's low hit 1431. Considering all the bombs that have been dropped on silver's head in the last six months, it ought to be washed out, that is, it has fallen as low as it will go. Do not foolishly discount silver's ability to snap back. That huge shortage in the physical market and deliveries delayed out six to twelve weeks point to huge buying. Today the premium on US 90% silver coin on the wholesale sell side rose to $4.95/ounce. We can get SOME live silver rounds and 100 ounce bars, but they aren't cheap. Want the least expensive privately minted silver rounds? You'll wait 6 - 12 weeks. We have some silver Brittanias as well as silver Kangaroos (shipping next week) and plenty of US 90% silver coin, but all at higher prices.

On 14 September 1814 Francis Scott Key, an American prisoner aboard a British vessel attacking Fort McHenry, wrote the poem that would later become the Star Spangled Banner. Forty-seven years later his grandson was imprisoned in Fort McHenry by Abraham Lincoln, who was busy suppressing Maryland's freedom to choose its own government in the "land of the free & the home of the brave."

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
14-Sep-15 Price Change % Change
Gold, $/oz 1,107.90 4.40 0.4
Silver, $/oz 14.36 -0.13 -0.9
Gold/Silver Ratio 77.168 0.314 0.4
Silver/Gold Ratio 0.0130 -0.0001 -0.9
Platinum 955.70 -9.50 -1.0
Palladium 587.35 -3.15 -0.5
S&P 500 1,953.03 -8.02 -0.4
Dow 16,370.96 -62.13 -0.4
Dow in GOLD $s 305.46 -2.35 -0.8
Dow in GOLD oz 14.78 -0.11 -0.8
Dow in SILVER oz 1,140.28 6.18 0.5
US Dollar Index 95.39 0.20 0.2
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: 1,108.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,141.45 1,146.99 1,146.99
1/2 AE 0.50 564.67 584.58 1,169.15
1/4 AE 0.25 285.10 297.83 1,191.32
1/10 AE 0.10 116.26 121.35 1,213.48
Aust. 100 corona 0.98 1,077.57 1,086.57 1,108.52
British sovereign 0.24 262.83 275.83 1,171.74
French 20 franc 0.19 208.45 212.45 1,137.94
Krugerrand 1.00 1,130.36 1,140.36 1,140.36
Maple Leaf 1.00 1,118.20 1,132.20 1,132.20
1/2 Maple Leaf 0.50 637.22 581.81 1,163.61
1/4 Maple Leaf 0.25 282.59 296.44 1,185.77
1/10 Maple Leaf 0.10 117.47 120.79 1,207.94
Mexican 50 peso 1.21 1,326.69 1,337.69 1,109.47
.9999 bar 1.00 1,112.08 1,120.20 1,120.20
SPOT SILVER: 14.39      
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 13,467.03 13,824.53 19.34
US 40% silver 1/2s 0.30 4,051.83 4,201.83 14.24
100 oz .999 bar 100.00 1,463.50 1,488.50 14.89
10 oz .999 bar 10.00 145.35 150.35 15.04
1 oz .999 round 1.00 14.49 14.95 14.95
Am Eagle, 200 oz Min 1.00 15.89 17.39 17.39
SPOT PLATINUM: 955.70      
Platinum Platypus 1.00 970.70 1,000.70 1,000.70
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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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