The Moneychanger
Daily Commentary
Tuesday, 26 January a.d. 2016 Browse the commentary archive

Most hearty thanks for your prayers on Susan's behalf in her eye surgery. She had the surgery early this morning, the surgeon said the results were great, and she's home sleeping now. Kind of looks like a pirate, tho, with that eye patch. If she starts mumbling, "Aaargh, Matey!" I'll get nervous.

Today was the day silver & gold finally burst through, & they did it in the teeth of stock market strength. THIS is that strength we want to see.

Of all the stupid headlines I've ever seen in the financial press, an unthinkably large number, today I saw one of the top stupidest: "Rally in oil prices pushes stock market higher." How can rising fuel costs be good news for any stock except an oil producer? Mercy. Aggravated stupidity jes' tahrs me out.

Dow Industrials rose 282.01 (1.78%) to 16,167.23. S&P500 gained 26.55 (1.41%) to 1,903.63. That leaves the chart plainly saying that the low close on the 20th marked the beginning of a relief rally. Aiming for 20 day moving average (now 16,579.88) or 16,600 (S&P500 for 1,950). Lo, NOW is come the time for stock owners to lighten their load! Now is come the time to take advantage of this rise. If you don't, sorrow & tooth clenching & hair pulling will result when the waterfall resumes.

Dow in silver fell today 0.15% to 1,113.83 oz while Dow in Gold barely rose, up 0.7% to 14.41 oz. Yes, yes, yes.

US dollar index teetered & faltered wackely all day, peeling off 21 basis points to fall to 99.13. Since the dollar skidded form an intraday 99.56 on 21 January. If it crosses 99, it falls out of a rising wedge, usually fatal in wavering markets. Watch closely tomorrow, as a dollar plunge won't hurt silver & gold a bit. Chart's at http://schrts.co/OkJ5UT

Euro poked its itty head above the downtrend line & rose 0.15% to $1.0867. As Queen Victoria might say, "We are not impressed." Still below the 20 DMA. Weak as orphanage gruel or federal government good will. Yen backed off 0.11% to 84.43, slap at the 20 DMA. Expect higher yen.

Today gold crashed through $1,113 resistant & shot up $15.50 (1.4%) to shutter Comex at $1,121.70. Silver outran gold, spurting up 30.4¢ (2.1%) to 1454.4¢.

Since that low Friday gold has steadily advanced. Somebody tried to cudgel it about 2:30 a.m. and knocked it from $1,117 back to $1,111, but it charged back with a vengeance, stopping just short of $1,125 resistance. Couldn't ask much more for one day's move. In fact, gold has generally kept climbing since the 14 January intraday low at $1,071.70. Close through $1,125 gives us lift-off to $1,155, next resistance.

Silver like to knocked the skin off its head butting its way through 1440¢, but kept at it until finally it burst through -- then it was moving so fast it never stopped until 1458¢. Closing near the top of the day's range is also a strong sign.

These are the two first-breakouts and confirmations we have been waiting for so long. Silver will run for its 200 DMA, now 1519, and not far above that, at 1550¢ will hit the downtrend line from the 2013 high. Above that is the Big One, the downtrend from the April 2011 high. But I'm getting ahead of myself. This time we will see a touch toward that 200 DMA and a first try to pierce that post 2013 downtrend line.

Buttressing these conclusions are a probable bottom in platinum & in palladium, and this gold and silver strength against stock strength.

Buy the gold and silver breakout

Y'all understand, of course, that the US is being Balkanized, with the yankee government in charge of setting us on one another? I'm not the only one who has notice that, right? More I think about it, more the future of this country looks not like a collapse, but like Lebanon with scores of militias fighting each other.

On 26 January 1861 Louisiana seceded from the Union.

On 26 January genocidal president Abraham Lincoln named General Joseph Hooker to replace Ambrose Burnside commanding the Army of the Potomac. Hooker apparently loaned his name to the large numbers of ladies following his army.

On 26 January 1564 the Roman Catholic Council of Trent after 18 years deliberating issued its conclusions, dashing hopes on both sides that the Church would not be divided.

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
26-Jan-16 Price Change % Change
Gold, $/oz 1,121.70 15.50 1.40%
Silver, $/oz 14.54 0.30 2.13%
Gold/Silver Ratio 77.125 -0.558 -0.72%
Silver/Gold Ratio 0.0130 0.0001 0.72%
Platinum 875.20 15.00 1.74%
Palladium 491.75 2.05 0.42%
S&P 500 1,903.63 26.55 1.41%
Dow 16,167.23 282.01 1.78%
Dow in GOLD $s 297.95 1.10 0.37%
Dow in GOLD oz 14.41 0.05 0.37%
Dow in SILVER oz 1,111.61 -3.93 -0.35%
US Dollar Index 99.13 -21.00 -17.48%
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: 1,123.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,155.16 1,169.77 1,169.77
1/2 AE 0.50 572.58 592.75 1,185.50
1/4 AE 0.25 289.10 301.99 1,207.98
1/10 AE 0.10 117.88 123.05 1,230.45
Aust. 100 corona 0.98 1,092.64 1,101.64 1,123.89
British sovereign 0.24 266.50 279.50 1,187.35
French 20 franc 0.19 211.37 215.37 1,153.55
Krugerrand 1.00 1,139.43 1,149.43 1,149.43
Maple Leaf 1.00 1,133.70 1,147.70 1,147.70
1/2 Maple Leaf 0.50 646.13 589.94 1,179.89
1/4 Maple Leaf 0.25 286.54 300.59 1,202.36
1/10 Maple Leaf 0.10 119.11 122.48 1,224.83
Mexican 50 peso 1.21 1,346.60 1,357.60 1,125.99
.9999 bar 1.00 1,127.63 1,135.70 1,135.70
SPOT SILVER: 14.51      
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 11,836.83 12,194.33 17.06
US 40% silver 1/2s 0.30 4,160.98 4,322.98 14.65
100 oz .999 bar 100.00 1,475.50 1,500.50 15.01
10 oz .999 bar 10.00 146.55 151.55 15.16
1 oz .999 round 1.00 14.61 15.07 15.07
Am Eagle, 200 oz Min 1.00 16.01 17.26 17.26
SPOT PLATINUM: 875.20      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 890.20 920.20 920.20
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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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