The Moneychanger
Weekly Commentary
Friday, 20 November a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  13-Nov-15 20-Nov-15 Change % Change
Silver, cents/oz. 1,420.30 1,410.60 -9.70 -0.7
Gold, dollars/oz. 1,080.80 1,076.40 -4.40 -0.4
Gold/silver ratio 76.097 76.308 0.211 0.3
Silver/gold ratio 0.0131 0.0131 -0.0000 -0.3
Dow in Gold Dollars (DIG$) 329.84 342.30 12.46 3.8
Dow in gold ounces 15.96 16.56 0.60 3.8
Dow in Silver ounces 1,214.20 1,263.56 49.37 4.1
Dow Industrials 17,245.24 17,823.81 578.57 3.4
S&P500 2,023.04 2,089.17 66.13 3.3
US dollar index 99.01 99.67 0.66 0.7
Platinum 863.50 855.30 -8.20 -0.9
Palladium 539.05 558.70 19.65 3.6

Scorecard never lies: gold and silver edged down, US dollar index edged up, stocks jumped up, platinum eroded while palladium went wild today.

Fed had its officials out swabbing & firing the blarney cannon today. New York FedPrez William Dud -- whoops, make that Dudley -- said today the Fed should soon be able to raise rates if they are confident it will raise inflation and that employment is stable. St. Louis FedPrez James Dullard -- whoops, make that Bullard -- said he expected the economy to expand for many more years. "The US economy is going into a boom period." No, that wasn't enough. He was also reported as saying that the persistence of low real interest rates was "a puzzle." Yeah, buddy, a puzzle with one big piece: the Fed suppressing interest rates. If you don't get it, what hope is there?

Where do they get these people? What happened to the adults? Peter Pan has hijacked the Fed.

But it worked on the stock market. Dow gained 91.06 (0.51%) to 17,823.81 and for the week rose a rosy-cheeked 3.4%. S&P500 today levitated 7.93 (0.38%) to 2,089.17. Today leaves both indices above their 20 day moving averages, poised to keep rising next week. They are, however, running up against the bottom of that upside-down bowl topping formation & tough resistance. If they punch through that bowl bottom, they might even make new highs for the year -- before they come tumbling down.

Dow in Gold rose 0.98% today to 16.56 oz, fiddling at a double top with July but raking razor blades across nerves before it does. Dow in silver closed at a slightly higher new high, 1,264.46 oz, right smart overbought. Holding my breath watching. If the Dow in metals breaks through this double top, stocks would rise a long ways and silver & gold fall or go flat. Here are charts with new outlines, differing from what I have been using, and Both only puzzle. Both formed rising wedges, a pattern that usually revolves downward, both duly broke out downward, but then against all expectation both traded back clean up into the wedge. Both have neared again the wedge's top boundary. I don't know. If it's not a double top, maybe it's magic. Maybe Harry Potter's running markets.

US dollar index broke down through its uptrend line yesterday, then traded back up to it today by rising 62 basis points (0.61%) to 99.67. Ain't much question the dollar has its silver slippers on and wants to dance. Only thing that might stop it would be resistance at the March-April double top around 100.70 - 100.27. Chart will explain,

Cowardly euro quickly forked over all of yesterday's gains and then some. Dropped 0.86% to $1.0646. Hope that nasty thing has a parachute. Yen dropped back only 0.06% to 81.35, but it don't look none too pert, either.

West Texas Intermediate Crude is trying to throw a leg over that lower range boundary it fell through 7 days ago, but can't quite make it. Hard to envision copper not losing more ground, even from its perch at $2.04. Phony inflation-addicted boom of the early 2000s puffed commodity prices all out of shape, & they're paying now.

Gold scraped off $1.60 to close Comex at $1,076.40. Silver lost 13.6 cents to 1410.6c.

Either silver wrecked today hopes raised yesterday, or its retreat today posted a double bottom with Wednesday. So far it's not an inspiring performance. Silver must rise above 1440c first, then blast past the top of the former trading range and the 20 DMA, about 1480c, and keep right on moving. Otherwise it is doomed to fall further. Yesterday's upward twitch did nothing to change the picture.

Gold's five day/15 minute chart shows that it fell back today to Wednesday night/Thursday morning's high, about $1,076. So it gave up all of yesterdays gains. $1,086 was the level that stopped it, so becomes the level to watch. Gold trading below $1,075 cancels out any expectation of higher prices. Next week then, a short holiday week and rarely good for metals, is setting up for more flatlining.

Gold & silver markets have gone dead. Rate of descent has slowed, but no momentum exists for a rise. Monthly chart shows gold still skidding down the downtrend line from 2012, with the 20 week moving average, first tripwire of a rise, above at $1,198. Silver's monthly chart is bumping along the 200 week moving average (1415c) and beneath the post 2011 downtrend line. Falling wedge has been forming since 2013. Nothing to do but wait patiently and calmly. I expect THE bottom in November.

I have lately had cause to re-read G.K. Chesterton's 1911 "Ballad of the White Horse" about the Saxon King Alfred the Great. I have a hardcover copy published by Ignatius with delightful illustrations & decorations. Face it, I'm sensual. I like to feed my eyes as I feed my mind.

As a Christian living in an age of re-paganization and nihilism, I drank encouragement from Chesterton's poem in great gulps and mouthfuls. It's not so long that you couldn't read it out loud -- must be read aloud -- to your spouse in a couple of evenings.

There's no shortage of discouragement & disappointment in the world, I find. I need only turn on National Proletarian Radio or look at internet news thirty or forty seconds before I begin thinking about smothering myself with a pillow. So when I find encouragement, especially from someone brilliant in a like situation, I grab hold and wear it out.

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
20-Nov-15 Price Change % Change
Gold, $/oz 1,076.40 -1.60 -0.1
Silver, $/oz 14.11 -0.14 -1.0
Gold/Silver Ratio 76.308 -0.106 -0.1
Silver/Gold Ratio 0.0131 -0.0001 -1.0
Platinum 855.30 -2.30 -0.3
Palladium 558.70 17.90 3.3
S&P 500 2,089.17 7.93 0.4
Dow 17,823.81 91.06 0.5
Dow in GOLD $s 342.30 2.29 0.7
Dow in GOLD oz 16.56 0.11 0.7
Dow in SILVER oz 1,263.56 18.46 1.5
US Dollar Index 99.67 0.62 0.6
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: 1,076.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,104.80 1,114.49 1,114.49
1/2 AE 0.50 548.66 568.01 1,136.02
1/4 AE 0.25 277.02 289.39 1,157.56
1/10 AE 0.10 112.96 117.91 1,179.10
Aust. 100 corona 0.98 1,047.04 1,056.04 1,077.37
British sovereign 0.24 255.38 268.38 1,140.10
French 20 franc 0.19 202.55 206.55 1,106.30
Krugerrand 1.00 1,092.95 1,102.95 1,102.95
Maple Leaf 1.00 1,086.80 1,100.80 1,100.80
1/2 Maple Leaf 0.50 619.16 565.32 1,130.64
1/4 Maple Leaf 0.25 274.58 288.04 1,152.18
1/10 Maple Leaf 0.10 114.14 117.37 1,173.71
Mexican 50 peso 1.21 1,290.40 1,301.40 1,079.37
.9999 bar 1.00 1,080.57 1,088.80 1,088.80
SPOT SILVER: 14.12      
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 11,597.30 12,027.30 16.82
US 40% silver 1/2s 0.30 3,973.65 4,123.65 13.98
100 oz .999 bar 100.00 1,437.00 1,462.00 14.62
10 oz .999 bar 10.00 142.70 147.70 14.77
1 oz .999 round 1.00 14.22 14.68 14.68
Am Eagle, 200 oz Min 1.00 15.62 16.87 16.87
SPOT PLATINUM: 855.30      
Platinum Platypus 1.00 870.30 900.30 900.30
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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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