The Moneychanger
Weekly Commentary
Friday, 19 February a.d. 2016 Browse the commentary archive
Here's the weekly scorecard:
  12-Feb-16 19-Feb-16 Change % Change
Silver, cents/oz. 1,578.50 1,536.80 -41.70 -2.6
Gold, dollars/oz. 1,239.10 1,230.40 -8.70 -0.7
Gold/silver ratio 78.499 80.062 1.564 2.0
Silver/gold ratio 0.0127 0.0125 -0.0002 -2.0
Dow in Gold Dollars (DIG$) 266.49 275.40 8.91 3.3
Dow in gold ounces 12.89 13.32 0.43 3.3
Dow in Silver ounces 1,011.96 1,066.63 54.67 5.4
Dow Industrials 15,973.84 16,391.99 418.15 2.6
S&P500 1,864.78 1,917.78 53.00 2.8
US dollar index 95.54 96.65 1.11 1.2
Platinum 957.30 944.60 -12.70 -1.3
Palladium 527.25 499.25 -28.00 -5.3

In vain I search the evening news, but Alas! there appear only stupidities too low & unworthy & uninteresting to lampoon. I must stick to markets instead.

'Twas a week of correction: downward for silver & gold, & up for stocks. Stocks had their best week in 2016, but Dow remains 5.9% below where it began 2016, and the S&P500 6.2% lower. This is what the yankee government & Fed economists call "negative growth." US dollar index rose but stalled, along with stocks.

US dollar index keeps punishing those who trust it. Today it broke into new high territory for the move, poked its head above the downtrend line, but like the mythical groundhawg, liked not what it saw and sank to close lower for the day. Yes, yes, that is a key reversal's first half, and a lower close Monday will clinch the reversal. It also fell back below the 200 day moving average yet again. Only thing it has going for it is a broadening trading channel which might portend an eventually upward break. For now, though, it remains locked in the tractor beam of a downtrend. Still needs to fall below 92.50 to confirm a trend reversal finally. Behold the chart,

Euro fell all the way back to its 200 day MA ($1.1064) before it caught traction. Today it gained 0.19% to $1.1131. Trashy. The Japanese Nice Government Men have a sizeable and ugly problem: the yen won't stop rallying. Not even negative interest rates have been able to cool it. Today rose another 0.52% to 88.77¢/Y100 (Y112.65 = US$1). Running away from 'em. Look,

Stocks, I reiterate, have lost much ground in 2016, but today all Wall Street's pimps, and they are legion, rolled out in force lauding stocks' superior performance this week, i.e., they rose for the week. I, on the other hand, no more'n a nat'ral born durned fool from Tennessee, fail to see the beauty in a one week rise by something that's fallen about 6% already this year. This smells of gangrene, not health. Why're them toes turning black?

Lo, even I was surprised when stocks hit their resistance (16,600 & 1,950) and crumpled. Dow Industrials painted a key reversal yesterday & today, with a break into a new high for the move and lower close on Thursday followed by a lower close today. S&P500 did not quite match, but came close. Today the Dow lost 21.44 (0.13%) to end at 16,391.99, an event the financial media, which, I remind y'all all emanate out of New York, characterized as "flat." S&P500 barely moved, down 0.05 point to 1,917.78. Dow chart lurks here, and the S&P chart is hiding here,

I'm not saying this is fatal, only that it seems watery-weak to fade before it even gets into resistance. I really was expecting some kind of rally, & this one in the last 5 days has accomplished only throwing a leg over the 20 DMA. Stocks are getting so poor they couldn't afford syrup if it fell to a penny a sop.

All the Dow in Gold has managed to do in the way of rallying has been to climb up to the uptrend line from the 2011 low, which it penetrated earlier. Now it's dropped down again. Surely it can rally more than that? This implies that stocks are even weaker than I imagine. Chart's at Dow in gold ended the day at 13.36 troy ounces (G$276.18 gold dollars).

Dow in silver acteth likewise weak. Ended the day at 1,067.53 oz (S$1,380.24 silver dollars.

Both this indicators still scream that stocks topped against silver & gold last summer and in December.

Today gold rose $4.30 (0.35%) to close Comex at $1,230.40. Silver gave up 5.9¢ to 1536.8¢. The big move came yesterday when gold gained $15 (1.2%) on Comex, then suddenly burst up another twelve bucks in the aftermarket. Never did find out what caused the buying panic. Silver through all this has remained comatose.

Jumpy markets give clues to underlying intentions. The stock market with its sudden sharp rallies that dwindle quickly typifies a bear market rally. Note that gold's jumpy bias takes it UP, not down. Somebody bought a lot of gold quickly because he was scared he miss a move or get trapped. Market's spooky.

Silver's lethargy against gold's energy has pulled the gold/silver ratio up to a new high for the move at 80.062. Still signalling & yelling & sending off flares for y'all to swap gold for silver.

Gold's present correction probably has one more downleg over the next few days. Then it will rise again. Of course, any close above $1,263.90 (last intraday high) explodes that downleg idea. Likewise a fall below $1,190.00 would call for a serious rethinking of gold's intentions. A chart's worth a thousand words, so Unless the present trend is contradicted by moving below $1,190, the trend is solidly HIGHER.

By the way, both silver & gold remain broken out on their weekly charts.

Silver laggeth, but one day will play catch up with gusto. Has remained above its 200 DMA. Look at this chart. Looks to be building for another rise, after that one more downleg. Renewed rally ought to begin next week.

Every 3 months or so I do an interview with Catherine Austin Fitts for her Solari Report. Here's a link to a little taste of that interview when I am discussing the thinness of the physical metals markets. If nothing else, you may catch a laugh.

I hardly know how to thank y'all for your prayers on Susan's behalf. Pain in her eye is somewhat less, but still tormenting her. She's waiting for a very stubborn stitch to dissolve. I would be more obliged still if your prayers for her continue to go up. She's tough, but the pain's wearing on her.

Trip to Harriman for the grazing conference was a success, if you call having to sit in a back seat for 4 hours getting there a success. Ate a delicious meal in a Knoxville restaurant, Knox Mason. Southern food. Grazing conference was splendidly instructive and very useful. Filled me with energy & ideas.

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
19-Feb-16 Price Change % Change
Gold, $/oz 1,230.40 4.30 0.4
Silver, $/oz 15.37 -0.06 -0.4
Gold/Silver Ratio 80.062 0.283 0.4
Silver/Gold Ratio 0.0125 -0.0000 -0.4
Platinum 944.60 -0.10 -0.0
Palladium 499.25 -5.80 -1.1
S&P 500 1,917.78 -0.05 -0.0
Dow 16,391.99 -21.44 -0.1
Dow in GOLD $s 275.40 -1.30 -0.5
Dow in GOLD oz 13.32 -0.06 -0.5
Dow in SILVER oz 1,066.63 2.69 0.3
US Dollar Index 96.65 -0.31 -0.3
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: 1,229.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,261.16 1,279.60 1,279.60
1/2 AE 0.50 626.38 648.40 1,296.81
1/4 AE 0.25 316.26 330.35 1,321.39
1/10 AE 0.10 128.96 134.60 1,345.97
Aust. 100 corona 0.98 1,198.84 1,207.84 1,232.24
British sovereign 0.24 291.52 304.52 1,293.64
French 20 franc 0.19 231.21 235.21 1,259.84
Krugerrand 1.00 1,243.95 1,253.95 1,253.95
Maple Leaf 1.00 1,239.20 1,253.20 1,253.20
1/2 Maple Leaf 0.50 706.79 645.33 1,290.66
1/4 Maple Leaf 0.25 313.45 328.81 1,315.24
1/10 Maple Leaf 0.10 130.30 133.98 1,339.83
Mexican 50 peso 1.21 1,474.51 1,485.51 1,232.08
.9999 bar 1.00 1,233.50 1,241.20 1,241.20
SPOT SILVER: 15.38      
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 12,748.45 13,105.95 18.33
US 40% silver 1/2s 0.30 4,419.10 4,581.10 15.53
100 oz .999 bar 100.00 1,563.00 1,588.00 15.88
10 oz .999 bar 10.00 155.30 160.30 16.03
1 oz .999 round 1.00 15.48 15.94 15.94
Am Eagle, 200 oz Min 1.00 16.88 18.13 18.13
SPOT PLATINUM: 944.60      
Platinum Platypus 1.00 959.60 989.60 989.60
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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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