The Moneychanger
Weekly Commentary
Friday, 16 October a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  9-Oct-15 16-Oct-15 Change % Change
Silver, cents/oz. 1,580.90 1,610.20 29.30 1.9
Gold, dollars/oz. 1,156.30 1,183.60 27.30 2.4
Gold/silver ratio 73.142 73.506 0.365 0.5
Silver/gold ratio 0.0137 0.0136 -0.0001 -0.5
Dow in Gold Dollars (DIG$) 305.43 300.68 -4.75 -1.6
Dow in gold ounces 14.78 14.55 -0.23 -1.6
Dow in Silver ounces 1,080.68 1,069.18 -11.50 -1.1
Dow Industrials 17,084.49 17,215.97 131.48 0.8
S&P500 2,014.89 2,033.11 18.22 0.9
US dollar index 94.88 94.59 -0.29 -0.3
Platinum 979.50 1,021.30 41.80 4.3
Palladium 706.80 698.90 -7.90 -1.1

If you only have time to read one paragraph, here 'tis: Same ol' lies this week, but they're wearin' threadbare. Stocks rallied & the media, pimping for Wall Street, made it sound like the rally of the century instead of a dead cat bounce off a trend-changing breakdown. US dollar index looks like your Mama's Dresden creamer you dropped on the tile floor. Platinum is finally waking up. Silver & gold manfully slugged their way through resistance thick as swamp mud, and after four years wallerin' have finally turned up.

If you want the longer version:

"Boys, get out the paint! Get gallons of it, 'cause we're gonna need it today! We gonna paint the tape!" So hollered the Boss of the Nice Government Men about 2:00 today. It was one boiling over crisis, Dow down for the day & the week! Flaming danger the suckers on Main Street might be awakened by the obvious. So they sprinted down to Wall Street, whole lot of 'em, and they commenced to painting. They had rollers & brushes & sprayers & they rolled & brushed & sprayed until finally that got that tape painted. Dow rose 74.22 (0.43%) to 17,215.97 and the S&P500 gained 9.25 (0.46%) at 2,033.11, & the country, yea, the nation we all love, the world as we know it, was saved from the Dow closing down for the week.

Great job, Nice Government Men! Y'all can go back to nappin' now. Trouble is, y'all will have to do the same thing next week, and the week after, and . . . and one day y'all might run out of paint.

Dow in gold rose today to 14.62 oz, up 0.91%. Remains beneath the 200 day moving average with momentum dragging it down like concrete overshoes & logging chains on a defunct Mafia don swimming laps in the East River. Lo, & behold, http://schrts.co/8Sv0tc

Dow in silver closed up 1% at 1,073.98, & has collapsed worse than the Dow in Gold. Chart's at http://schrts.co/ohwLZP

D'y'all notice the US dollar index fell for the week? It did. Today it rose, in step with stocks as has been its wont lately, 16 big basis points or 0.17%, to 94.59. 'Tain't much, not even up to the downtrend line, but for a scrofulous fiat currency that ain't backed by anything but tanks and warships, 'tain't bad. Chart's here, sad sight to behold, http://schrts.co/OkJ5UT

Euro fell 0.19% to $1.1358. Rotten thing has no more face than a whipped dog, just running for cover every time the dollar raises its finger. Ditto the yen, which has now given up all of it breakout upside this week. In a three way race with the Euro & Dollar for "Sorriest Fiat Currency in the Universe."

Just a word about those inflation markets, oil & copper. After breaking out of a pennant & trading up to its 200 DMA, WTIC traded down to its 20 day moving average, caught, and turned up today. That suggests but doesn't prove that the August low was THE low. http://schrts.co/KvfGnd Copper is still riding on a double bottom August/September. Floating up toward its 200 DMA. http://schrts.co/pEzHdP

Gold edged off a little today, $4.30 (0.4%) to close Comex at $1,183.60. Silver gave back the nickel it made yesterday and ended at 1610.2 cents.

Just think on the most important things. Gold has spent three days above its 200 DMA, and above the downtrend line from October 2012. It did this after breaking out of an even-sided triangle & left behind an October low $79.80 lower than it now stands. It has passed the last two highs. It is set up to plow through $1,190 and $1,205 resistance. Its momentum indicators all point up. http://schrts.co/lch4Qe

What in the world are y'all complaining about? Gold is fixin' to move HIGHER.

Now gaze upon silver, also floating above its 200 DMA like a fingernail moon in a black sky. Broken out above that summer trading range and that old support/resistance at 1560c. Busted clean free of an even-sided triangle as October began, and now stands 174 cents higher than it began October. I don't particularly like the shape of that flag it has drawn, but that's not fatal. http://schrts.co/VxGWuS

If silver & gold can survive whatever attack comes Monday, y'all will see much higher prices this week. If not and they correct a little, that's okay, too. Silver is targeting 1786c, gold $1,300.

Bottom line: hair-pulling agony of the four year correction is behind us, best I can tell from what shows now. Stocks have turned down against gold & silver, which is the sign we were waiting for. US economy is going to get worse, and Janet Yellen will find herself wishing she had taken that job as Walmart greeter instead of moving to Washington. Whoops! Make that Dollar General. Walmart ain't doing so good, Janet.

On 16 October 1555 Bishop Hugh Latimer and Bishop Nicholas Ridley were burned at the stake by Bloody Mary, in Broad Street, Oxford, England. Latimer, who was 68, leaned over to Ridley as they walked to the stake and said, "Play the man, Master Ridley; we shall this day light such a candle, by God's grace, in England as I trust shall never be put out." It hasn't gone out yet, either.

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
16-Oct-15 Price Change % Change
Gold, $/oz 1,183.60 -4.30 -0.4
Silver, $/oz 16.10 -0.05 -0.3
Gold/Silver Ratio 73.506 -0.265 -0.4
Silver/Gold Ratio 0.0136 -0.0000 -0.3
Platinum 1,021.30 15.70 1.6
Palladium 698.90 -5.35 -0.8
S&P 500 2,033.11 9.25 0.5
Dow 17,215.97 74.22 0.4
Dow in GOLD $s 300.68 2.41 0.8
Dow in GOLD oz 14.55 0.12 0.8
Dow in SILVER oz 1,069.18 7.90 0.7
US Dollar Index 94.59 0.16 0.2
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SPOT GOLD: 1,176.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,205.50 1,217.26 1,217.26
1/2 AE 0.50 599.30 620.39 1,240.79
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British sovereign 0.24 278.93 284.93 1,210.41
French 20 franc 0.19 221.22 225.22 1,206.35
Krugerrand 1.00 1,191.39 1,201.39 1,201.39
Maple Leaf 1.00 1,186.10 1,200.10 1,200.10
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SPOT SILVER: 16.03      
SILVER Fine Tr.Oz. BID ASK $/oz
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VG+ Peace dollar 0.77 20.00 22.00 28.76
90% silver coin bags 0.72 13,138.13 13,638.63 19.08
US 40% silver 1/2s 0.30 4,535.63 4,785.63 16.22
100 oz .999 bar 100.00 1,627.50 1,652.50 16.53
10 oz .999 bar 10.00 161.75 166.75 16.68
1 oz .999 round 1.00 16.13 16.59 16.59
Am Eagle, 200 oz Min 1.00 17.53 19.03 19.03
SPOT PLATINUM: 1,021.30      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 1,036.30 1,066.30 1,066.30
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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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