The Moneychanger
Weekly Commentary
Friday, 11 December a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  4-Dec-15 11-Dec-15 Change % Change
Silver, cents/oz. 1,450.50 1,385.90 -64.60 -4.5
Gold, dollars/oz. 1,084.50 1,076.90 -7.60 -0.7
Gold/silver ratio 74.767 77.704 2.937 3.9
Silver/gold ratio 0.0134 0.0129 -0.0005 -3.8
Dow in Gold Dollars (DIG$) 340.20 331.42 -8.78 -2.6
Dow in gold ounces 16.46 16.03 -0.42 -2.6
Dow in Silver ounces 1,230.45 1,245.78 15.33 1.2
Dow Industrials 17,847.63 17,265.21 -582.42 -3.3
S&P500 2,091.69 2,012.37 -79.32 -3.8
US dollar index 98.35 97.55 -0.80 -0.8
Platinum 880.50 843.50 -37.00 -4.2
Palladium 566.20 543.95 -22.25 -3.9

Before I forget, I have to travel next week and will be out of town Monday through Thursday, so I won't be sending any commentaries on those days. God willing, I'll see y'all again next Friday.

Not much joy in Wall Street this week. They's chickens flying all up and down the street, messin' up the sidewalks & sidewalkers & looking for a place to roost. Stocks are walking toward August's open manhole & junk bonds are flying apart. What happened to Santa Claus & where is his rally? Gold & silver have been listless, & silver is turning puny. Scurvy US dollar index resumed it skid, & the white metals are diving.

The scrofulous, scabby US dollar index has spent the last seven trading days trying to prove its rally has been permanently broken. It tried to rise today, but the market slapped it winded. Closed down 38 basis points (0.39%) at 97.55, three basis points beneath its 50 day moving average (97.58), AND within shooting distance of its 200 DMA at 96.80. Crossing that line and staying thereunder will confirm there is no more dollar rally to look forward to. Take not my word for it, look at the chart,

The euro climbed 0.47% to $1.0995. It has climbed back through the bottom boundary of the range November kicked it out of & today touched its 200 DMA ($1.1025) but couldn't close through it. Give that the dollar index is headed down and the euro is 57% of the dollar index, simple mathematics whispers the euro should rise higher. However, always remember that low-life, white trash, egg-sucking-yellow-dog criminal central bankers manipulate currency rates, so a chart pattern may not fulfill its promise. Chart's at

Yen is in the same state as the euro, only better: it has crossed above its 200 DMA. Today it rose 0.51% to 82.67. Ought to rise.

Just remember, a nation without a central bank is like a howler monkey without a cell phone. Or a hog without a waistcoat.

Junk bonds are tanking. When investors are scared, they flee high risk investments like that, looking for safety. HYG junk bond index has avalanched to a new two year low. Yes, that is serious. Pretty fair article on Marketwatch here, "Why the junk bond selloff is getting very scary." Note the chart comparing junk bond performance with S&P500 performance last 17 years. View the HYG chart at but grab your wastebasket first. Might make you puke. (Thanks, R, for forwarding me that article!)

Further flight to safety alert was posted on the 10 year treasury yield today. It fell 4.47% to 2.139%. Remember that bonds RISE when yields fall, so this reflects money fleeing into bonds.

Sellers bashed stocks this week. Dow lost 3.3%, S&P500 3.8%. Today was the worst of a rotten week. S&P500 dove 39.86 (1.94%) to 2,012.37. Dow got up on the diving board and plunged 309.54 (1.76%), landing on its face at 17,265.21. Owch.

Where does that leave them? Here are charts, and

Mark, gentle readers, that both indices are nearing the horizontal line through which indices fell in August so ignominiously, as an incautious man reading a newspaper falls down an open manhole. Downside momentum is building with volatility. Both indices have fallen way below their 200 DMAs and other moving averages, so that momentum is sucking them down into a maelstrom. Bad juju, bwana. Hear drums beating in jungle. Bad juju, as the bearers might have said in a 1930s Tarzan movie.

Ponder now: how likely is the Fed to raise interest rates in the face of plunging stocks? Likely, not likely, or likely as the survival of a large roach facing 200 hungry hens?

Dow in gold fell 2.01% today to 16.08 troy ounces. Clearly double topped 27 Nov & 2 Dec & has since cascaded through its 20 DMA and today through the uptrend line from August 2013. No gift of clairvoyance needed to foresee much lower prices here.

Even after silver's shabby performance this week & today particularly, the Dow in Silver dropped 0.28% to 1,243 troy ounces. Like its sister indicator, it, too, hath fallen below its 20 DMA and peaked back on 2 December. Be patient. It appears stocks have peaked against metals.

WTIC (a proxy for oil) made another new low today at $35.36. Will it fall to $20? Beats me. Copper is gainsaying oil by rising, up 2.4% today on a chart that looks almost plumb bottomed.

With all this panic in the air, the Gold:Bank Stock Index spread is smokin', taking off. Remember, this spread shows waxing confidence in the financial system (the big banks) versus gold when it's falling, and waning confidence in finance and waxing confidence in gold when it rises. Looky, looky here:

Comex gold today rose $3.80 (0.35%) to $1,076.90. Silver lost 22.6 cents (1.6%) to 1385.9c. For the week gold lost 0.47% while silver lost 4.5%.

Today's silver tumble sent the closing Gold/Silver ratio to 77.704 & nearly to the range's top. This is a breakout through the downtrend line. When stocks are performing poorly, silver feels puny, too. If stocks do suddenly plunge again, the ratio might rise to 81. Chart's at

Gold's symmetrical formation of the last 30 days could very well mark a bottom, & today it closed above its 20 DMA -- good. Indicators all point up, but gold has been unable to mount a sustained climb. For good or ill, the dank cloud of the Fed's raising rates will pass. We'll see what gold does then.

I don't like silver's chart, mostly today. It posted a new low for the move at 1375c, & a new low close at 1385.9c. Can't build upward steam.

Lo, memories of 2008 have seized my mind. Then the US dollar soared while stocks, silver, & gold tanked. However, stocks tanked much, much faster than gold. Look at this chart of the Dow in Gold, recalling that the spread is a fraction, Dow divided by gold, so it SINKS when gold is outperforming the Dow. Even silver outperformed stocks in 2008, but not like gold.

But history doesn't necessarily repeat. The dollar index went rising into August 2008 quite strongly, peaked at the crisis peak in November, then plunged. This time, the dollar index has just broken and nixed a rally. This time around maybe gold might benefit more than the dollar.

On 11 December 1919 a monument to the Boll Weevil was dedicated in Enterprise, Alabama.

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
11-Dec-15 Price Change % Change
Gold, $/oz 1,076.90 3.80 0.4
Silver, $/oz 13.86 -0.23 -1.6
Gold/Silver Ratio 77.704 0.287 0.4
Silver/Gold Ratio 0.0129 -0.0002 -1.6
Platinum 843.50 -12.20 -1.4
Palladium 543.95 -19.65 -3.5
S&P 500 2,012.37 -39.86 -1.9
Dow 17,265.21 -309.54 -1.8
Dow in GOLD $s 331.42 -7.10 -2.1
Dow in GOLD oz 16.03 -0.34 -2.1
Dow in SILVER oz 1,245.78 -1.99 -0.2
US Dollar Index 97.55 -0.38 -0.4
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SPOT GOLD: 1,078.90      
GOLD Fine Tr.Oz. BID ASK $/oz
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SILVER Fine Tr.Oz. BID ASK $/oz
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VG+ Peace dollar 0.77 17.50 20.00 26.14
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US 40% silver 1/2s 0.30 3,910.23 4,060.23 13.76
100 oz .999 bar 100.00 1,415.50 1,440.50 14.41
10 oz .999 bar 10.00 140.55 145.55 14.56
1 oz .999 round 1.00 14.01 14.47 14.47
Am Eagle, 200 oz Min 1.00 15.41 16.66 16.66
SPOT PLATINUM: 843.50      
Platinum Platypus 1.00 858.50 888.50 888.50
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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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