The Moneychanger
Daily Commentary
Tuesday, 3 November a.d. 2015 Browse the commentary archive

Yet another low energy day.

US dollar index rose 30 basis points to 97.26, after three lower days running. That does creep above the downtrend from the March high, but barely. This situation is larded with entropy. Dollar cannot remain here forever, teetering on the edge of climbing or falling. Some resolution will come soon, if for no other reason, to have mercy on us who are worn out with watching it crabwalk sideways. Chart's here, maybe y'all can parse it,

The euro, the currency with no reason to exist, fell 0.46% to $1.0962. The yen backed off 0.25% to 82.58. Yawn.

Stocks edged up. Dow added 89.39 (0.5%) to close at 17,918.15. (Y'all interested yet?). S&P500 gained 5.74 (0.27%) to 2,109.79.

Dow in Gold & Dow in Silver look worse & worse, having corrected 83.3% of the preceding fall. Makes me wonder.

Oil is trying to come to life again. West Texas Intermediate Crude shot through its 20 day moving average today.

Rotten day for silver and gold. Gold plunged $21.60 (1.9%) to $1,114.20. Silver fell 16.9 cents (1.1%) to 1524.4c.

In fact gold closed below the downtrend line from the January high AND the uptrend from the July low, slicing through my $1,120 target. That might be an exhaustion day, but if so must turn around tomorrow. Otherwise, take your pick of lower targets becaue it is a breakdown.

Silver, on the other hand, took a licking but remains above its 50 DMA & uptrend from the August low. Tomorrow that uptrend line will stand about 1510c. Silver needs to hold that line or 'twill turn very ugly.

I feel like the old boy who was trying to say something nice about his blind date, but the best he could come up with was, "I reckon her folks save a lot of money on mirrors."

If silver & gold don't turn up soon, this could become very, very ugly.

On 3 November 1798 the French Revolutionary confiscated the property of the Church. This was the first step in the hyperinflation that would eventually destroy the Revolution and install Napoleon as dictator. Strapped for cash, the Assembly authorized the issuance of notes called "assignats" which would be backed by the value of the church lands. Then the notes could be used to buy the confiscated property, thus extinguishing them. Zut alors, it didn't work that way. The Assembly issued first one and then another and then multiplied issues of assignats, then replaced those with mandats, and finally got an end to the hyperinflationary madness with Napoleon, who burned the plates for the paper money in the Place de Concorde & swore he would pay in gold or nothing else.

Like true liberals, the Revolutionary government wanted laws with teeth. Trying to control prices, they passed the Law of Maximums, which included the death penalty for anyone who asked for payment in silver or gold.

Yes, sir, liberty, equality, and fraternity. The hyperinflation freely printed money, tortured everybody equally, and left one grand fraternity of poverty.

As the French say, the more things change, the more they stay the same. Today we have a private central bank doing the same thing. No change, just slower.

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
3-Nov-15 Price Change % Change
Gold, $/oz 1,114.20 -21.60 -1.90%
Silver, $/oz 15.24 -0.17 -1.10%
Gold/Silver Ratio 73.091 -0.600 -0.81%
Silver/Gold Ratio 0.0137 0.0001 0.82%
Platinum 961.20 -17.20 -1.76%
Palladium 643.80 -6.35 -0.98%
S&P 500 2,109.79 5.74 0.27%
Dow 17,918.15 89.39 0.50%
Dow in GOLD $s 332.44 7.95 2.45%
Dow in GOLD oz 16.08 0.38 2.45%
Dow in SILVER oz 1,175.42 18.69 1.62%
US Dollar Index 97.26 0.30 0.31%
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: 1,117.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,145.23 1,156.41 1,156.41
1/2 AE 0.50 569.31 589.38 1,178.75
1/4 AE 0.25 287.45 300.27 1,201.10
1/10 AE 0.10 117.21 122.34 1,223.44
Aust. 100 corona 0.98 1,087.51 1,096.51 1,118.66
British sovereign 0.24 264.99 277.99 1,180.90
French 20 franc 0.19 210.16 214.16 1,147.10
Krugerrand 1.00 1,128.47 1,138.47 1,138.47
Maple Leaf 1.00 1,127.30 1,141.30 1,141.30
1/2 Maple Leaf 0.50 642.45 586.58 1,173.17
1/4 Maple Leaf 0.25 284.91 298.88 1,195.51
1/10 Maple Leaf 0.10 118.43 121.79 1,217.86
Mexican 50 peso 1.21 1,338.93 1,349.93 1,119.63
.9999 bar 1.00 1,121.21 1,129.30 1,129.30
SPOT SILVER: 15.26      
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 12,162.15 12,557.15 17.56
US 40% silver 1/2s 0.30 4,309.95 4,459.95 15.12
100 oz .999 bar 100.00 1,551.00 1,576.00 15.76
10 oz .999 bar 10.00 154.10 159.10 15.91
1 oz .999 round 1.00 15.36 15.82 15.82
Am Eagle, 200 oz Min 1.00 16.76 18.26 18.26
SPOT PLATINUM: 961.20      
Plat. Platypus 1.00 976.20 1,006.20 1,006.20
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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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