The Moneychanger
Daily Commentary
Tuesday, 1 December a.d. 2015 Browse the commentary archive

If you need a laugh today, go to http://on.fb.me/1l5fSjY and watch. It will take just 50 seconds. It's bad news for seniors, but great news for immigrants.

Facebook's Mark Zuckerberg's wife had a baby today, and to celebrate Zuckerberg pledged to give away 99% of his Facebook stock "to advance human potential and promote equality for all children in the next generation."

Wow. After I finished puking in my wastebasket, I began to think maybe I ought to pledge to give away my Facebook stock -- someday, someday, but not today -- to do something really, really noble & trendy. Thus I will give away, after I am conveniently graveyard dead, all my wealth to put pants on poor naked cats, to cure halitosis in pretty young girls, to buy shaving cream for homeless men & antiperspirant for homeless women, to fund a vaccine for zits, and to make everybody in generals feel better about him/her/itself, regardless how truly goofy he/she/it is.

Y'all don't thank me. It was the least I could do, to give something back, & to build an enduring monument to my own ego. Wait! What's that you say? What about Matthew 6:1-5?

ON TO MARKETS!

Welcome to Never-Never-Land, where nothing ever makes sense. Latest sign of a robust economy is Puerto Rico, having defaulted on its August bond payments, barely missing default on the 1 December payment, and warning it will probably default on January. This was such good news that the Dow rose 168.43 (0.95%) to 17,888.95 and the frenzied S&P500 augmented 22.22 (1.07%) to 2,102.63. This pokes both through the overhead upside-down bowl topping formation, but no more than early November. They're counting on more stimulus from the ECB.

All this volatility characterizes a topping market as new bearish opinion wrestles with old bullish. That kicked neither the Dow in Silver nor the Dow in Gold to new highs. They are vibrating. Big move coming as they have no fuel left to rise. See http://schrts.co/8Sv0tc and http://schrts.co/ohwLZP

Dollar tumbled 39 basis points (0.38%) today to 99.82 and the bottom boundary of that rising wedge I mentioned yesterday. MACD has turned down. Next large move is gravity's. Look for yourself, http://schrts.co/OkJ5UT If the Fed fails to raise rates, the sound of many waters you will hear will be the dollar being flushed down the tube.

Gold's latest Commitments of Traders are the most bullish in 14 years, according to Clive Maund. Silver's CoTs have improved, but not like gold's.

What does that mean? That the dumb money is as short as it has been at any time in 14 years, and the smart money is long (not short). Nothing supercharges a rally like terrified shorts scurrying to cover their position and get out at any price. This doesn't say exactly when a rally will happen, only that it should happen soon.

Meanwhile this Thursday the criminals at the European Central Bank meet in their equivalent of an FOMC meeting. Everyone expects them to announce they will suppress interest rates into even more negative territory and print more money (Quantitative Easing). Here in Never-Never-Land the expectation that the ECB will further debase its currency and torture the economy with negative interest rates sends the euro up and the dollar down. I just report it, I don't try to make any sense out of it.

Gold & Silver were flat as a fritter today. On a 20 cent trading range from 1424c to 1404c, silver rose a blistering one-half cent to 1405.5c. Y'all should have heard the crowds screaming & applauding on Comex. Gold lost $2.00 to end at $1,063.80.

With yesterday's close gold had painted out a key reversal's first half, but failed to close higher today. More equivocation and mealy-mouthing. Gold needs to jump OVER $1,080, about where the 20 DMA stands right now. By the way, that low last Friday took gold through the bottom line of its post-2013 falling wedge, but it has bounced back up into that wedge. Silver did not reach that bottom boundary (now about 1300c), but it's so oversold it doesn't much matter.

So there they are, oversold, bullish CoTs, non-confirmation of gold's new low for the move, and the central banks of the world clueless as a dying calf in a hailstorm, printing up money like the Russians were on Main Street.

Surely it's only a matter of time before silver & gold bite back.

MILESTONES OF AMERICAN CULTURE: On 1 December 1982 Michael Jackson released his album "Thriller."

MILESTONES OF CANADIAN CULTURE: On 1 December 1985 the TV miniseries "Anne of Green Gables" is first shown on CBS.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
1-Dec-15 Price Change % Change
Gold, $/oz 1,063.80 -2.00 -0.19%
Silver, $/oz 14.06 0.01 0.04%
Gold/Silver Ratio 75.688 -0.169 -0.22%
Silver/Gold Ratio 0.0132 0.0000 0.22%
Platinum 835.40 3.10 0.37%
Palladium 538.65 -3.30 -0.61%
S&P 500 2,102.63 22.22 1.07%
Dow 17,888.35 168.43 0.95%
Dow in GOLD $s 347.61 3.92 1.14%
Dow in GOLD oz 16.82 0.19 1.14%
Dow in SILVER oz 1,272.74 11.53 0.91%
US Dollar Index 99.82 -0.39 -0.39%
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: 1,068.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,100.66 1,106.00 1,106.00
1/2 AE 0.50 544.48 563.69 1,127.37
1/4 AE 0.25 274.91 287.19 1,148.75
1/10 AE 0.10 112.10 117.01 1,170.12
Aust. 100 corona 0.98 1,040.11 1,049.11 1,070.30
British sovereign 0.24 253.44 266.44 1,131.84
French 20 franc 0.19 201.00 205.00 1,098.04
Krugerrand 1.00 1,081.42 1,091.42 1,091.42
Maple Leaf 1.00 1,078.60 1,092.60 1,092.60
1/2 Maple Leaf 0.50 614.45 561.02 1,122.03
1/4 Maple Leaf 0.25 272.49 285.85 1,143.40
1/10 Maple Leaf 0.10 113.27 116.48 1,164.77
Mexican 50 peso 1.21 1,280.57 1,291.57 1,071.22
.9999 bar 1.00 1,072.34 1,080.60 1,080.60
SPOT SILVER: 14.14      
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 11,608.03 11,894.03 16.64
US 40% silver 1/2s 0.30 3,978.08 4,128.08 13.99
100 oz .999 bar 100.00 1,438.50 1,463.50 14.64
10 oz .999 bar 10.00 142.85 147.85 14.79
1 oz .999 round 1.00 14.24 14.70 14.70
Am Eagle, 200 oz Min 1.00 15.64 16.89 16.89
SPOT PLATINUM: 835.40      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 850.40 880.40 880.40
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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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