The Moneychanger
Daily Commentary
Tuesday, 5 January a.d. 2016 Browse the commentary archive

Yesterday's commentary erred in the prices of the Dow Industrials & S&P500. Should have been 17,148.94 (down 276.09) and 2,012.66 (down 31.28). I apologize for the error, but it maketh not a whit's bit of difference to my conclusions.

Today the Dow Industrials gained a whopping 9.72 (0.06%, a rounding error). S&P500 shot up 4.05 (0.2%) to 2,016.71. Chart for the day looks like a cross section of the Mariana Trench. I repeat, and again, repeat, stocks are in trouble & 2016 will see them suffer like Job, complete with boils.

Once again the US dollar index rose, this time 54 basis points (0.55%) to 99.46. No doubt the dollar was again catching the safe haven bid, but even in the teeth of this fairly strong dollar rise, gold & silver rose, too.

Euro gapped down today 0.71% to $1.0755. The Frankencurrency, like the Franken-empire, is yielding to centrifugal force. Yen gained 0.29% to 84.01. Top of 11 month range is 84.65, so 'twill be interesting to watch what the Japanese Nice Government Men do when the yen tries to escape their cage.

Gold rose 3.30 to $1,078.40 on Comex. Silver gained 13.2¢ to 1394.9¢.

My needle is stuck in the same old groove: Gold must break through $1,088 and silver through 1440¢. Nothing else will answer the case.

Today & yesterday gold crossed the first tripwire of a rally, rising above its 20 day moving average ($1,068.62), but this is a baby step. Silver did not quite beat its 20 DMA, now 1402¢. Silver's trading for the last 20 months still resembles an upside-down head & shoulders, which would signal a bottom.

I sure do love the free market, 'cause it has a solution for everything. Bernard O'Bama announced new restrictions on gun sales, and Smith & Wesson rose to its highest value ever. Free market supplies a need for every want.

On 5 January 1836, with less than perfect timing, Tennessean Davy Crocket arrived in Texas, just in time for the Alamo. To his credit, he didn't pack up and leave.

Tomorrow is Epiphany, the last of the Twelve Days of Christmas.

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
5-Jan-16 Price Change % Change
Gold, $/oz 1,078.40 3.30 0.31%
Silver, $/oz 13.95 0.13 0.96%
Gold/Silver Ratio 77.310 -0.500 -0.64%
Silver/Gold Ratio 0.0129 0.0001 0.65%
Platinum 888.60 5.40 0.61%
Palladium 535.10 -7.85 -1.45%
S&P 500 2,016.71 4.05 0.20%
Dow 17,158.66 9.72 0.06%
Dow in GOLD $s 328.91 -0.82 -0.25%
Dow in GOLD oz 15.91 -0.04 -0.25%
Dow in SILVER oz 1,230.10 -11.05 -0.89%
US Dollar Index 99.46 0.54 0.55%
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: 1,077.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,108.23 1,121.16 1,121.16
1/2 AE 0.50 548.76 568.12 1,136.24
1/4 AE 0.25 277.07 289.44 1,157.78
1/10 AE 0.10 112.98 117.93 1,179.32
Aust. 100 corona 0.98 1,048.29 1,057.29 1,078.64
British sovereign 0.24 255.43 268.43 1,140.30
French 20 franc 0.19 202.58 206.58 1,106.50
Krugerrand 1.00 1,092.08 1,102.08 1,102.08
Maple Leaf 1.00 1,087.00 1,101.00 1,101.00
1/2 Maple Leaf 0.50 619.28 565.43 1,130.85
1/4 Maple Leaf 0.25 274.64 288.10 1,152.39
1/10 Maple Leaf 0.10 114.16 117.39 1,173.93
Mexican 50 peso 1.21 1,288.04 1,299.04 1,077.42
.9999 bar 1.00 1,080.77 1,089.00 1,089.00
SPOT SILVER: 13.94      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 26.00 33.99
VG+ Peace dollar 0.77 17.50 20.00 26.14
90% silver coin bags 0.72 11,182.60 11,540.10 16.14
US 40% silver 1/2s 0.30 3,994.30 4,156.30 14.09
100 oz .999 bar 100.00 1,419.00 1,444.00 14.44
10 oz .999 bar 10.00 140.90 145.90 14.59
1 oz .999 round 1.00 14.04 14.50 14.50
Am Eagle, 200 oz Min 1.00 15.44 16.69 16.69
SPOT PLATINUM: 888.60      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 903.60 933.60 933.60
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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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