The Moneychanger
Weekly Commentary
Friday, 5 February a.d. 2016 Browse the commentary archive
Here's the weekly scorecard:
  29-Jan-16 5-Feb-16 Change % Change
Silver, cents/oz. 1,422.90 1,476.40 53.50 3.8
Gold, dollars/oz. 1,116.40 1,157.80 41.40 3.7
Gold/silver ratio 78.459 78.420 -0.039 -0.0
Silver/gold ratio 0.0127 0.0128 0.0000 0.0
Dow in Gold Dollars (DIG$) 304.90 289.33 -15.57 -5.1
Dow in gold ounces 14.75 14.00 -0.75 -5.1
Dow in Silver ounces 1,157.24 1,097.60 -59.63 -5.2
Dow Industrials 16,466.30 16,204.97 -261.33 -1.6
S&P500 1,940.24 1,880.05 -60.19 -3.1
US dollar index 99.64 97.01 -2.63 -2.6
Platinum 872.30 902.00 29.70 3.4
Palladium 497.50 499.65 2.15 0.4

Lo, the week speaketh, nor can be gainsaid! Silver & gold rose strongly, while stocks & the dollar took bullets from every side. Note also gains in platinum & palladium, reinforcing and confirming silver & gold. Dow in gold and Dow in silver both sank more than 5%. Dow/metals trend has turned decisively down.

Stocks continue to spring bad surprises & unexpected disappointments. So far their way has been blocked at 16,600 & 1,950, as some fool guessed. Dow fell from the opening, down, down, down, then down some more. Ended 211.61 (1.29%) lower at 16,204.97. S&P500 ended 35.4 (1.85%) cheaper at 1,880.05. It begins to appear that stocks lack sufficient gumption even to mount a convincing countertrend rally. Y'all ought to be selling stocks & buying silver & gold with the proceeds.

More instructive still are the Dow in Gold & Dow in Silver, for there we discern the great Wheels of the Universe creaking as they turn the primary trend, down for stocks & up for metals. Dow in Gold ended today (NOT based on Comex close) at 13.80 oz (G$285.27 gold dollars) which punches through support from February 2015 for the lowest close since August. More, it lodged a scant 3/10 ounce from 13.50 oz, which marks the uptrend line from the September 2011 low. Read that again, y'all, so you don't miss it or its significance. It's the last barrier for the Dow in Gold to prove it really did turn down in December. Behold the chart,

Dow in silver dropped 25.83 ounces today to end at 1,078.17. If it drops 24 more ounces, it will smash at 1,054 oz the uptrend line from the 2011 low. Do y'all understand this means the END of the bear market in silver & gold, & the end of the bull market in stocks? Go look,

US dollar index dead-cat-bounced 52 basis points (0.54%) to 97.01, just above the 200 DMA at 96.89. Looks broke as a stopped government clock to me. Closes below 96 confirm brokenness, below 95.5 plumb-brokenness, below 92.50 slap-out-brokenness.

Euro shot up Wednesday, gapped up yesterday, & backed off today 0.38% to $1.116.0 Above the 200 DMA and all others, so rallying. Might reach $1.1500. Yen must be chafing the Japanese Nice Government Men something fierce. They thought they'd fixed it good, driving it down with the surprise Negative interest rate announcement, but the dollar's dive this week sent it shooting up to HIGHER prices than before their manipulation. Today lost 0.03% to 85.58.

On Comex today where mercy is neither shown nor asked, silver dropped 7.2¢ to close at 1476.4¢. Gold added twenty cents (20, count 'em) to $1,157.80.

HOGWASH! Hogwash! In the aftermarket gold popped up $15.50 (1.3%) to $1,173.30. Silver popped 26.6¢ (1.8%) to -- LOOOKY HERE! -- 1503¢.

There more, even better, but I'm saving it for later.

Daily chart makes me say HOGWASH. Right at 9:00 a.m. gold spot gapped from $1,160 to $1,151. That's on a ONE minute chart. It eased down to $1,145, made a rounding bottom, and then right about when Comex closed, jumped, leapt from $1,150 to $1,157.50, traded sideways a while, then shot up.

The old slap-her-down-with-massive-selling aren't working anymore.

Silver behaved much the same. Gapped down at 9:00 a.m. from 1490¢ to 1480¢, made a rounding bottom, then started climbing after Comex closed.

Now look here: That's a gold WEEKLY chart since 2013. Carefully mark that this week gold broke upwards through the downtrend line from the October 2012 high and poked its head way above the 50 week MA ($1,142.35). Weekly chart breakout confirms the daily chart breakout. Monthly does not yet show it, but that comes next.

On silver's weekly chart there's a big bullish falling wedge, and silver barely peeked through the downtrend line this week. Didn't make it through the 50 Week MA. Chart's here,

Okay, gold & silver have turned up against stocks (Dow in Gold & Dow in Silver have turned down) & they have broken through the downtrend line from the Oct 2012 high on the daily chart, and gold has broken through on the daily. Here's gold's daily chart, And here is silver's, reaching for that 200 DMA,

What's next? Here is one possibility, and only a possibility. First look at the chart, Between July and October gold traced what looks like a left shoulder of an upside-down head and shoulder pattern. Then it fell back to sketch out a big head with the bottom in December. Now it is outlining the right side of that head up to some Neckline, maybe about $1,175. From there it might back off and paint a right shoulder, backing up to $1,140, $1,125, or even $1,090. After terrorizing & shaking off as many gold buyers as possible, the bull would then turn up and rally through that neckline, never to return.

OR, when I reaches $1,190, it might just punch clean through and never look back.

I can't make up my mind which, but either way silver & gold bottomed back in December.

Please dccept my heartfelt thanks for your continuing prayers for Susan's eye. It is healing slowly but she is still suffering much pain.

Y'all enjoy your weekend.

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
5-Feb-16 Price Change % Change
Gold, $/oz 1,157.80 0.20 0.0
Silver, $/oz 14.76 -0.07 -0.5
Gold/Silver Ratio 78.420 0.017 0.0
Silver/Gold Ratio 0.0128 -0.0001 -0.5
Platinum 902.00 -2.40 -0.3
Palladium 499.65 -17.20 -3.3
S&P 500 1,880.05 -34.40 -1.8
Dow 16,204.97 -211.61 -1.3
Dow in GOLD $s 289.33 -3.80 -1.3
Dow in GOLD oz 14.00 -0.18 -1.3
Dow in SILVER oz 1,097.60 -8.94 -0.8
US Dollar Index 97.01 0.52 0.5
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: 1,173.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,200.29 1,221.41 1,221.41
1/2 AE 0.50 597.87 618.92 1,237.83
1/4 AE 0.25 301.87 315.32 1,261.30
1/10 AE 0.10 123.09 128.48 1,284.76
Aust. 100 corona 0.98 1,142.02 1,151.02 1,174.27
British sovereign 0.24 278.27 291.27 1,237.32
French 20 franc 0.19 220.70 224.70 1,203.52
Krugerrand 1.00 1,188.55 1,198.55 1,198.55
Maple Leaf 1.00 1,183.30 1,197.30 1,197.30
1/2 Maple Leaf 0.50 674.65 615.98 1,231.97
1/4 Maple Leaf 0.25 299.19 313.86 1,255.43
1/10 Maple Leaf 0.10 124.37 127.89 1,278.90
Mexican 50 peso 1.21 1,406.04 1,417.04 1,175.29
.9999 bar 1.00 1,177.41 1,185.30 1,185.30
SPOT SILVER: 15.03      
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 12,319.45 12,676.95 17.73
US 40% silver 1/2s 0.30 4,315.85 4,477.85 15.18
100 oz .999 bar 100.00 1,528.00 1,553.00 15.53
10 oz .999 bar 10.00 151.80 156.80 15.68
1 oz .999 round 1.00 15.13 15.59 15.59
Am Eagle, 200 oz Min 1.00 16.53 17.78 17.78
SPOT PLATINUM: 902.00      
Platinum Platypus 1.00 917.00 947.00 947.00
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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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