The Moneychanger
Weekly Commentary
Friday, 6 November a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  30-Oct-15 6-Nov-15 Change % Change
Silver, cents/oz. 1,556.60 1,469.60 -87.00 -5.6
Gold, dollars/oz. 1,141.50 1,087.60 -53.90 -4.7
Gold/silver ratio 73.333 74.007 0.674 0.9
Silver/gold ratio 0.0136 0.0135 -0.0001 -0.9
Dow in Gold Dollars (DIG$) 319.88 340.42 20.54 6.4
Dow in gold ounces 15.47 16.47 0.99 6.4
Dow in Silver ounces 1,134.75 1,218.72 83.97 7.4
Dow Industrials 17,663.54 17,910.33 246.79 1.4
S&P500 2,079.36 2,099.20 19.84 1.0
US dollar index 97.02 99.26 2.24 2.3
Platinum 988.60 939.60 -49.00 -5.0
Palladium 677.05 612.75 -64.30 -9.5

Today was a day of extremes, but more on that in a moment. The week was disastrous for metals, encouraging for stocks, and triumphant for the scrofulous US dollar index. But let us see if perchance we might find a flotsam bit of truth bobbing on the sea of illusion.

'Twas a day of extremes. Silver & gold & platinum reached extreme lows for the move (palladium did yesterday) while the US dollar index reached an extreme high. Indeed, sometimes extremes signify continuations coming, but sometimes tops & bottoms.

Today the lying jobs report blew all before it. I am too intellectually fastidious, embarrassed really, to remind y'all that within a fortnight the same lying government jobs report will be revised, and probably by a chunk that makes today's enthusiasm seem laughable. It happens every month, and every month markets fall for it. Why? They want to believe a lie. It comforts them.

If you take this month's jobs report and average it with the last two months sorry jobs reports, you get a number that barely indicates a living economic body. Yet although it's all a con job, markets reacted as if the FOMC had already announced an interest rate rise. That shot jet fuel into the dollar and the 10 year treasury yield, and sucked the gas out of stocks' tank. Yet 'twas all on anticipation, & no facts.

US dollar index rose 121 basis points to 99.26, besting the last 98.43 high & approaching the March intraday high at 100.71. Breaking out through the trendline as it has, it is signaling a rise to 104.56 -- but maybe not right away. Today's extreme looks like the end of the upmove from October. The jobs news was a perfect accompaniment/catalyst for one last surge. Time for a correction. Chart is here,

Dollar's surge broke the euro's back. It fell 1.27% to $1.0743, a crushing break of support reaching back to May. Bye-bye, euro! Bye-bye yen, too! Yen lost 1.16% to 81.19, busting support from August.

10 year treasury yield today hit its downtrend line from 2007. Markets are taking up rates with or without the Fed, but certainly in anticipation of the Fed. That puts the 10 year note (price move opposite to yield) near a breakdown. That won't do at all, Nice Government Men!

Stocks did not like the jobs report with its inference that lower unemployment would alibi the Fed's raising interest rates. They fell off a cliff until about 10:30 when, miraculously, somebody began buying and drove them back up, well, a little. (If y'all don't get irony, you'd better change channels now.) Confusion still reigned, with the Dow up 46.9 (0.26%) to 17,910.33 and the S&P500 down 0.73 (0.03%) to 2,099.20.

'Twas also a day of extremes for the Dow in Gold & Dow in Silver. Dow in gold has closed today at 16.45 troy ounces, and has retraced almost all the ground from the July high at 16.50. RSI is also critically, repletely overbought. Can this be signaling the limit of the rebound? If so, 'twould leave a clean double top on the chart. If not, we'll be swimming in this sewery slough for a lot longer.

Dow in Silver offers a like picture. Today's 1,215.08 ounce high nearly reached July's 1,236.37 ounces. Also strongly overbought.

Gold sank 1.5% or $16.80 to $1,087.60. Silver plunged 2% or 29.2 cents to 1469.6c. Gold has now fallen nine (9) days running, breaking the uptrend line from the July low and stopping today a meager $15.30 from that $1,072.30 intraday low.

If it ain't an extreme and a double bottom, then bite your tongue, it's signaling an even bigger drop. And this plunging must stop soon. Very soon. Silver's not quite the same. It did break the uptrend line from the August low, but that depends on how you draw that line. Draw it through the October low, and it only today pierced the uptrend. Not good, but better'n being dropped naked into boiling nitric acid.

What does it all mean? Here's the best I can figure. The Fed has engineered an unreal world, quintupling the money supply since 2008 & steering all that inflation into the financial asset markets by zero interest rates. How far can they go? Will they begin buying stocks outright to prop up the market, as the Bank of Japan is now pondering? How long can a lie stand? I mean the lie of the stock market, with its rise based not on economic forces but only on inflation.

At some point, some catalyst will drop a hammer on the glass doll's house, & break everyone inside. Whether that happens Monday or a month or two months from now, I don't know, but happen it will, and soon. A bottom in silver & gold will also happen soon, if the summer lows don't hold.

Listen to my words, write this down: when the hammer drops, you'd better be out of stocks and holding plenty of silver & gold.

It's been a long day. I will forbear to address the latest Obama lunacy & the continual propagandizing of the global warming lie. I've had a gutful of lies for one day. I'm fixing to go enjoy supper with my wife.

I try my best to keep my priorities straight, and she's next to highest on my list.

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
6-Nov-15 Price Change % Change
Gold, $/oz 1,087.60 -16.80 -1.5
Silver, $/oz 14.70 -0.29 -1.9
Gold/Silver Ratio 74.007 -1.128 -1.5
Silver/Gold Ratio 0.0135 -0.0003 -1.9
Platinum 939.60 -12.80 -1.3
Palladium 612.75 -6.65 -1.1
S&P 500 2,099.20 -0.73 -0.0
Dow 17,910.33 46.90 0.3
Dow in GOLD $s 340.42 6.09 1.8
Dow in GOLD oz 16.47 0.29 1.8
Dow in SILVER oz 1,218.72 26.87 2.3
US Dollar Index 99.26 1.21 1.2
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: 1,088.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,119.29 1,126.91 1,126.91
1/2 AE 0.50 554.78 574.34 1,148.68
1/4 AE 0.25 280.11 292.62 1,170.46
1/10 AE 0.10 114.22 119.22 1,192.24
Aust. 100 corona 0.98 1,059.77 1,068.77 1,090.36
British sovereign 0.24 258.23 271.23 1,152.19
French 20 franc 0.19 204.80 208.80 1,118.39
Krugerrand 1.00 1,100.78 1,110.78 1,110.78
Maple Leaf 1.00 1,098.80 1,112.80 1,112.80
1/2 Maple Leaf 0.50 626.06 571.62 1,143.24
1/4 Maple Leaf 0.25 277.64 291.25 1,165.02
1/10 Maple Leaf 0.10 115.41 118.68 1,186.79
Mexican 50 peso 1.21 1,304.78 1,315.78 1,091.30
.9999 bar 1.00 1,092.61 1,100.80 1,100.80
SPOT SILVER: 14.75      
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 11,758.18 12,151.18 16.99
US 40% silver 1/2s 0.30 4,158.03 4,308.03 14.60
100 oz .999 bar 100.00 1,499.50 1,524.50 15.25
10 oz .999 bar 10.00 148.95 153.95 15.40
1 oz .999 round 1.00 14.85 15.31 15.31
Am Eagle, 200 oz Min 1.00 16.25 17.75 17.75
SPOT PLATINUM: 939.60      
Platinum Platypus 1.00 954.60 984.60 984.60
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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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