The Moneychanger
Weekly Commentary
Friday, 30 October a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  23-Oct-15 30-Oct-15 Change % Change
Silver, cents/oz. 1,581.80 1,556.60 -25.20 -1.6
Gold, dollars/oz. 1,163.30 1,141.50 -21.80 -1.9
Gold/silver ratio 73.543 73.333 -0.210 -0.3
Silver/gold ratio 0.0136 0.0136 0.0000 0.3
Dow in Gold Dollars (DIG$) 313.58 319.88 6.29 2.0
Dow in gold ounces 15.17 15.47 0.30 2.0
Dow in Silver ounces 1,115.61 1,134.75 19.14 1.7
Dow Industrials 17,646.70 17,663.54 16.84 0.1
S&P500 2,075.15 2,079.36 4.21 0.2
US dollar index 97.24 97.02 -0.22 -0.2
Platinum 1,000.00 988.60 -11.40 -1.1
Palladium 693.35 677.05 -16.30 -2.4

Let us earnestly & soberly ponder the week's results. Stocks, for all the stalinesque propaganda, rose only 0.1%, well, 0.2% for the S&P500. US dollar index fell back today to close the week down 0.2%. For all the FOMC fomc-in' and stocks a-burblin' & dollar just a-thumpin', gold lost only 1.6% & silver only 1.9%. What about the white metals? Platinum lost 1.1% & palladium 2.4%. But all is not what it seems. In fact, nothing is. All is seeming. It's like Ronald Reagan is directing markets.

What if the Nice Government Men and criminal central bankers, in order to hold at bay the due penalty of their monetary crimes and economic sins, worked together to manipulate interest rates? "Aww, you Tennessee fool! Don't you already know all them central bank knockers sit down to eat together once a month in Basel at the Bank for International Settlements? Whatta you think they talk about, the rubber chicken & cheap wine?"

No, I understand that, what I mean is that last week, not to put too fine a point on it, was the most luxuriant and pyrotechnic display of central bank jawboning & smoke-blowing we've seen since Draghi's famous we'll do "whatever it takes."

The end of the month was drawing close, & all good bureaucrats keep one eye on the calendar, because they are graded month to month. How to get stock prices up, especially before the FOMC meeting? The Chinese obliged by dropping interest rates on Thursday, Friday Draghi rattled his throat making noises about more QE coming in December, maybe, perhaps. Then the FOMC said they would definitely/maybe/probably/possibly raise rates in December.

I'd say it was a brilliant propaganda campaign, and succeeded in pushing up the Dow 7.9% & the S&P 8.1% on the month, & helped erase the memory of the searing pain and bleeding from the August plunge. No new bolts were turned, no screws tightened, no new houses or cities or refrigerators built, nothing was produced, no economic demand grew nor economic supply, yet it SEEMED as if it had, because stocks were suddenly more valuable.

'Twas all seeming, without being. But it worked.

And what if the US dollar index is being managed the same way. Draghi says to Yellen, "You let your currency rise this month, and we'll let ours rise next month." Dollar has traded in a roughly 5 point range, even with the August drop, since May. Nice round number, five.

Now the details.

Stocks today fell. Let me eschew prolixity: the Dow & S&P500 have walked through their uptrend lines from March 2009, as well as spending the last twelvemonth forming an upside-down bowl top. They crashed through that bowl's lip in August, rallied -- thanks to the central banking miscreants -- back to the bowl, & for the last two days have shrunk back like Vlad Dracula contemplating a crucifix at dawn. Dow chart's at and S&P500 at

Dow Industrials lost 92.26 (0.52%) today to 17,663.54. S&P500 gave back 10.05 (0.48%) to 2,079.36. Get clear in your mind: If they can pierce the bottom of that upturned bowl the central bank magicians have engineered an extension to the stock boom. If not, stocks will move lower than a rich deacon stealing out of the collection plate.

Dow in Gold & Dow in silver have suffered, thanks to the last week. Dow in gold reached the old top line (about 15.50 troy ounces) as it climbed through the 200 DMA, but today hooked down a tiny bit. Too early to say it has turned down.

Dow in Silver rallied to a high of 1,140.02, but settled today at 1,137.02 oz. Also above the 200 DMA. Looks tired but hasn't confirm that by lying down and going to sleep.

US dollar index flaked today. After hitting that 97.89 FOMC-induced high on Wednesday, it traded back to the breakout line, a normal enough move. But today it sliced clean through that line like it had stepped through a trap door. Ended at 97.02, down 35 basis points (0.35%). Looks sick. Why did it cut into the bottom boundary of that rising wedge? Nobody wanted to go home long dollars. Y'all look at the chart:

The euro, the Frankencurrency, rose 0.26% to $1.1007, but who cares? Now below its 200 dma & couldn't buy credibility if it had its own central bank to issue money. Wait, wait. It does.

Yen is tanglefooted in its converging 20, 50, & 200 DMAs. Range-trading.

On Comex today, where they take no prisoners & show no mercy, gold fell $5.70 to $1,141.50 & silver gained 2.2 cents to 1556.6c.

Note, mark, & inwardly digest that during October Gold rose from $1,114.20 to $1,141.50, a $27.30 or 2.5% gain. In the same 30 days silver flew from 1450.6c to 1556.6c, higher by 106 cents or 7.3%.

Gold traded down to its 50 DMA & stopped there today, having closed beneath its 20 DMA on Wednesday. A 62.8% correction of the foregoing move takes it to $1,137.10. Today's low came at $1,138.40.

Downtrend line from the January high crosses the uptrend line from the July low about $1,122.50. Next week. However, gold hasn't yet signaled a turnaround.

Silver has hit the old support at 1550-1560c and stopped. Silver is holding up better than gold, which makes me nervous because silver's Commitments of Traders look more negative than gold's. Will silver even the score with gold in one swoop?

On the other hand, a 50% correction of the October advance would be 1536.5c. Down below at 1500c is the uptrend line from the August low.

For all the worrying, silver & gold remain in uptrends from the summer lows, & they had an excellent higher month. Gold/Silver ratio remains where it ought to be if they are rallying, namely, below its 200 DMA in a downtrend.

On 30 October 1866 Jesse James & his gang robbed a bank in Lexington, Missouri of $2,000. James and his men had been Confederate guerillas in Missouri, but at war's end they weren't allowed to surrender. Left no choice, they kept on fighting. James' sister had been killed while under Union arrest. An entire building full of arrested women collapsed, and they were on the second floor. Fighting in Missouri was the fiercest, most brutal of the war, even surpassing West Tennessee. Ang Lee's movie "Ride With The Devil" offers the best cinematic portrayal of the War in Missouri.

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
30-Oct-15 Price Change % Change
Gold, $/oz 1,141.50 -5.70 -0.5
Silver, $/oz 15.57 0.02 0.1
Gold/Silver Ratio 73.333 -0.367 -0.5
Silver/Gold Ratio 0.0136 0.0000 0.1
Platinum 988.60 -3.20 -0.3
Palladium 677.05 6.45 1.0
S&P 500 2,079.36 -10.05 -0.5
Dow 17,663.54 -92.26 -0.5
Dow in GOLD $s 319.87 -0.04 -0.0
Dow in GOLD oz 15.47 -0.00 -0.0
Dow in SILVER oz 1,134.75 -7.54 -0.7
US Dollar Index 97.02 -0.35 -0.4
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SPOT GOLD: 1,140.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,169.22 1,180.62 1,180.62
1/2 AE 0.50 581.25 601.72 1,203.44
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Aust. 100 corona 0.98 1,110.29 1,119.29 1,141.90
British sovereign 0.24 270.53 276.53 1,174.74
French 20 franc 0.19 214.57 218.57 1,170.68
Krugerrand 1.00 1,153.25 1,163.25 1,163.25
Maple Leaf 1.00 1,150.70 1,164.70 1,164.70
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SILVER Fine Tr.Oz. BID ASK $/oz
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VG+ Peace dollar 0.77 20.00 22.00 28.76
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US 40% silver 1/2s 0.30 4,380.75 4,630.75 15.70
100 oz .999 bar 100.00 1,575.00 1,600.00 16.00
10 oz .999 bar 10.00 156.50 161.50 16.15
1 oz .999 round 1.00 15.60 16.15 16.15
Am Eagle, 200 oz Min 1.00 17.00 18.20 18.20
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Platinum Platypus 1.00 1,003.60 1,033.60 1,033.60
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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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