The Moneychanger
Daily Commentary
Monday, 2 November a.d. 2015 Browse the commentary archive

I hate to waste y'all's time with nothin' to amount to a hill o'beans to talk about, but today was just more of the same. It's liable to be another day before stocks come off their high horse.

Dollar faltered & stumbled again today, not much but 4 basis points to close below 97 at 96.97. Jes' don't make no sense, so I peeked at the 5 day chart to see if it could stimulate my mind, but I'll be switched if I can see e'er a pattern there. Last Wednesday when those FOMC liars lied about making interest rates in December, it shot straight up, but since then it's been like a log rolling down an easy hill. Has no mind to rise, and after breaking out thru that downtrend line from the March high, has just fallen off in the ditch. I'm not writing it off, but I think it's plumb peculiar to faint after a big deal move.

Them FOMC folks are such liars they have to hire somebody else to call their hogs.

Stocks are just a-boomin' again today. Dow found 165.22 (0.94%) somewhere to end at 17,828.76 while the S&P500 added 24.69 (1.19%) to 2,104.05.

Gold lost $5.70 (0.5%) to $1,135.80 on Comex. Silver dropped 15.3 cents (1%) to 1541.3c.

Not much pattern in silver & gold either, but they both failed to pierce the 200 day moving average and are trending down. If silver's newly won friends in hedge funds (the dumb money) get scared, they'll skedaddle fast. Today silver broke that 1550c support, so is just bound to hit that uptrend line from the August low, just above 1500c.

Gold fell through its 50 DMA (1,140.56) and is heading for the uptrend line about $1,120.

Time to think about seasonal patterns, the average of 30 years' price action. Now you can't do more than set your calendar by them, but they do convey some notion how things behave.

After a flat first six month's with maybe a high in May, Gold's seasonal pattern strongly trends to rise out of June or July lows to year's end. Here's Dimitri Speck's seasonal gold chart,

Silver, on the other hand, tends to reach it's year's high in April or May, then move sideways the rest of the year.

Both metals often make a high in October followed by a low in November, then rise into year end. Warning! This is an average, and y'all know that the average height of a three foot midget and a nine-foot giant is six feet, so be careful.

On 2 November 1947 Howard Hughes flew the largest aircraft ever built, the Spruce Goose, made of laminated birch & spruce. With a wingspan longer than a football field, it was built to carry more than 700 men. In 1941 the US government commissioned Hughes Aircraft Company to design it. It cost $23 million to develop, and detractors in congress demanded that he prove the plane could fly. He obliged at Long Beach Harbor when it took off and flew 70 feet above the water for a mile. It never went into production, but Hughes stored it in a climate-controlled hangar until his death in 1976, at a cost of $1 million a year. Today it sits at the Evergreen Aviation Museum in McMinnville, Oregon.

If y'all every get to tiny Micanopy (Mick-CAN-o-pee) Florida there's a tiny café there on the live-oak line main drag, Coffee & Cream. They serve a delicious chicken salad, one of the most underrated dishes in the world. Great place to sit on the porch, beautiful village. Lots of yankees, though, but also a few of the world's rarest & most endangered species, the Native Floridian.

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
2-Nov-15 Price Change % Change
Gold, $/oz 1,135.80 -5.70 -0.50%
Silver, $/oz 15.57 -0.15 -0.97%
Gold/Silver Ratio 72.967 0.348 0.48%
Silver/Gold Ratio 0.0137 -0.0001 -0.48%
Platinum 978.40 -10.20 -1.03%
Palladium 650.15 -26.90 -3.97%
S&P 500 2,079.36 -10.05 -0.48%
Dow 12,828.76 165.22 1.30%
Dow in GOLD $s 233.49 4.16 1.81%
Dow in GOLD oz 11.29 0.20 1.81%
Dow in SILVER oz 824.15 18.53 2.30%
US Dollar Index 96.97 -0.04 -0.04%
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: 1,133.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,161.43 1,172.76 1,172.76
1/2 AE 0.50 577.37 597.71 1,195.42
1/4 AE 0.25 291.52 304.52 1,218.08
1/10 AE 0.10 118.87 124.07 1,240.74
Aust. 100 corona 0.98 1,102.89 1,111.89 1,134.35
British sovereign 0.24 268.73 274.73 1,167.09
French 20 franc 0.19 213.14 217.14 1,163.02
Krugerrand 1.00 1,145.56 1,155.56 1,155.56
Maple Leaf 1.00 1,143.10 1,157.10 1,157.10
1/2 Maple Leaf 0.50 651.53 594.88 1,189.76
1/4 Maple Leaf 0.25 288.94 303.10 1,212.42
1/10 Maple Leaf 0.10 120.11 123.51 1,235.08
Mexican 50 peso 1.21 1,357.87 1,368.87 1,135.33
.9999 bar 1.00 1,137.07 1,145.10 1,145.10
SPOT SILVER: 15.41      
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 12,340.90 12,770.90 17.86
US 40% silver 1/2s 0.30 4,354.20 4,604.20 15.61
100 oz .999 bar 100.00 1,566.00 1,591.00 15.91
10 oz .999 bar 10.00 155.60 160.60 16.06
1 oz .999 round 1.00 15.51 16.06 16.06
Am Eagle, 200 oz Min 1.00 16.91 18.11 18.11
SPOT PLATINUM: 978.40      
Plat. Platypus 1.00 993.40 1,023.40 1,023.40
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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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