The Moneychanger
Daily Commentary
Tuesday, 20 October a.d. 2015 Browse the commentary archive

After today I'll be travelling until the 29th, so won't be sending out commentaries. I'll be back on the 29th, God willing.

The black mouldy pall of the shadow of the Fed is descending on markets, waiting for the outcome of the FOMC's meeting October 27-28, the last until December 15-16. Chances of them raising interest rates is less than the chance of Bernard Obama being abducted by aliens tonight, but the Fed has kept the blarney cannon firing to keep markets befuddled. Probably stocks will sell off on the news of no interest rate increase.

But the Fear of the Fed -- Fed-o-phobia -- is depressing most markets.

US dollar index rallied, perhaps on speculators' hopes the Fed really will raise rates, above its current downtrend line. http://schrts.co/OkJ5UT On a daily chart this doesn't look like an advancing market, merely confused back and forth trading with a slightly upward bias. For whatever reason, the dollar index rose 11 basis points (0.12%) to 95.05. Since its swimming below its 20, 50, and 200 day moving averages, in that order, today's rise won't beget any shoutin' & jubilatin'. Doesn't say much.

Stocks continue to falter, putt-putt-putt. Dow lost 48.5 (0.28%) to 17,168.61. S&P coughed up 11.83 (-.58) at 2,018.94. Waxed weaker and weaker as the day drew to its closed.

Silver & gold took it in the gut today. Silver dropped 20.9 cents (1.3%) to close 1569.6c on Comex. Gold fell $10.40 (0.9%) to $1,167.60.

This comes as no surprise, but it would be best if Gold dipped only to its 20 day moving average now at $1,151.61. Breaking $1,150 will be very bad form. (That's lower than the $1,560 I mentioned on Monday). Silver closing below 1550c will lead to lower prices. 20 DMA is at 1550c.

On 21 October 1714 the German (actually Hessian/Braunschweigian) George I was crowned King of England. During World War I that Germanness became so embarrassing the royal family changed their last name, Saxe-Coburg, to Windsor.

On 21 October 1805 British Admiral Horatio Nelson beat the combined & larger French & Spanish fleet at the Battle of Trafalgar. Nelson was shot and killed, but the battle confirmed English naval superiority in the long string of wars between England and Napoleon Bonaparte. Nelson's victory is commemorated in Trafalgar Square in London with a statue atop a column 160 feet in the air, with four lions at the base.

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
21-Oct-15 Price Change % Change
Gold, $/oz 1,167.60 -10.40 -0.88%
Silver, $/oz 15.70 -0.21 -1.31%
Gold/Silver Ratio 74.388 0.324 0.44%
Silver/Gold Ratio 0.0134 -0.0001 -0.44%
Platinum 1,006.00 -12.90 -1.27%
Palladium 676.65 -17.70 -2.55%
S&P 500 2,018.94 -11.83 -0.58%
Dow 17,168.61 -48.50 -0.28%
Dow in GOLD $s 303.96 1.83 0.61%
Dow in GOLD oz 14.70 0.09 0.61%
Dow in SILVER oz 1,093.82 11.32 1.05%
US Dollar Index 95.05 0.11 0.12%
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: 1,167.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,196.69 1,208.36 1,208.36
1/2 AE 0.50 594.92 615.86 1,231.71
1/4 AE 0.25 300.37 313.77 1,255.06
1/10 AE 0.10 122.48 127.84 1,278.41
Aust. 100 corona 0.98 1,137.52 1,146.52 1,169.68
British sovereign 0.24 276.89 282.89 1,201.74
French 20 franc 0.19 219.61 223.61 1,197.68
Krugerrand 1.00 1,182.68 1,192.68 1,192.68
Maple Leaf 1.00 1,177.50 1,191.50 1,191.50
1/2 Maple Leaf 0.50 671.31 612.94 1,225.88
1/4 Maple Leaf 0.25 297.71 312.31 1,249.23
1/10 Maple Leaf 0.10 123.76 127.26 1,272.58
Mexican 50 peso 1.21 1,399.09 1,410.09 1,169.52
.9999 bar 1.00 1,171.59 1,179.50 1,179.50
SPOT SILVER: 15.70      
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 12,830.68 13,366.68 18.69
US 40% silver 1/2s 0.30 4,438.28 4,688.28 15.89
100 oz .999 bar 100.00 1,594.50 1,619.50 16.20
10 oz .999 bar 10.00 158.45 163.45 16.35
1 oz .999 round 1.00 15.80 16.26 16.26
Am Eagle, 200 oz Min 1.00 17.20 18.70 18.70
SPOT PLATINUM: 1,006.00      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,021.00 1,051.00 1,051.00
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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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