The Moneychanger
Daily Commentary
Tuesday, 23 February a.d. 2016 Browse the commentary archive

I appeared on a new show today, David Simpson's True Money. It was a lively & enjoyable 45 minutes. You can listen to it at http://bit.ly/21h6f4x and it should be available today. If not, 'twill be tomorrow. Look for True Money Episode XI. I didn't know anything about the Veritas Radio Network, but now I'm intrigued by the little bit I do know.

All's Right In The World. Sure. Wells Fargo bank set aside $1.2bn for potential losses on oil & gas loans today. On 17 February JPMorgan set aside $500mn for its potential croppers. JPMorgan Chase is the largest (by total assets) bank in the US. Wells Fargo is the fourth largest. Mama, trouble in the oil patch means double trouble in the bank patch.

Something happened to gold today that I can't show y'all on a chart because the Stockcharts.com chart closed before it hit. On Comex gold closed up $16.40 (1.32%) at $1,238.70. In the aftermarket, though, it dropped about $9.00 to $1,229.60. Why? No clear reason.

On this chart http://schrts.co/pI1ZgR y'all will see the bullish flag or pennant I mentioned yesterday. Today gold broke strongly UP out of that pennant. Great -- break to a new high for the move, except that later it dropped clean back, giving up much of the day's gains. After a rise into new ground, that leaves me sore as a rented mule. 'Tain't right.

Add to that the gold/silver ratio at a new high, 81.003. Think of that as a giant cast iron lid coming down on a dutch oven, pressing that chicken (gold) down into that pot. It also stands right at the top channel boundary line. This situation shall not last long. Here's the chart, http://schrts.co/kh9gOy

One other thing: today's high leaves that pennant looking more like a "bearish flag" than a pennant, and as its name whispers, a bearish flag usually resolves downward.

No question silver did begin a key reversal on an End of Day chart, even though it rose 5.7¢ (0.4%) on Comex to 1529.2¢. Rose into new high ground only to close lower. On strongly higher volume, so it's likely to persist that direction.

Stocks didn't tell us a durned thing today. Dow gained 53.21 (0.32%) to 16,484.78 while the S&P500 rose 8.53 (0.44%) to 1929.80. Both remained ABOVE the 20 day moving average, but BELOW & whipped by overhead resistance (16,600 & the 50 DMA for Dow and 1,950 & 50 DMA for S&P500). If I could tear the top label off that chart so I didn't know what it was, I'd still say, "I have no more desire to own that than to own a 3-legged dog that can't bark."

Dollar index pushed higher, but remains mired in the mud at 97.50, where today it closed. Don't like 97.50 a-tall. Euro lost 0.08 to $1.1010, going nowhere slow. Yen hit a new high for the move at 89.25, up 0.4%.

Unless gold can close above $1,264, it faces another leg down and soon. Silver's acting like a sea anchor, pulling gold back. Don't let any drops, even large ones, scare you off. That's your opportunity to load the boat!

Whoa! Another day of improvement for Susan's eye. Most hearty thanks for all your prayers.

On 24 February 1821 Mexico gained her independence from Spain.

Ironically enough, on 24 February 1836 3,000 Mexican attacked 182 Texicans at the Alamo, beginning a battle that would last 13 days.

On 24 February 1921 the National Socialist German Workers Party began at the Hofbraeuhaus in Munich. Y'all probably know it by its abbreviation for the German name, Nationalistische Sozialistische Deutsche Arbeiter Partei -- Nazi, for short. Although dismissed as loonies, in 12 years -- January 1933 -- the NSDAP Leader or Fuehrer Adolf Hitler, was sworn in as German Chancellor. Once the Nazis had their toe in that door, they pushed through and took over everything quickly. Never underestimate revolutionaries. They'll kill you if you do.

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
24-Feb-16 Price Change % Change
Gold, $/oz 1,238.70 -16.40 -1.31%
Silver, $/oz 15.29 0.06 0.37%
Gold/Silver Ratio 81.003 -1.380 -1.67%
Silver/Gold Ratio 0.0123 0.0002 1.70%
Platinum 943.40 0.70 0.07%
Palladium 487.50 -12.75 -2.55%
S&P 500 1,929.80 8.53 0.44%
Dow 16,484.78 53.21 0.32%
Dow in GOLD $s 275.10 4.47 1.65%
Dow in GOLD oz 13.31 0.22 1.65%
Dow in SILVER oz 1,078.00 -0.54 -0.05%
US Dollar Index 97.50 0.01 0.01%
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: 1,229.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,260.34 1,280.01 1,280.01
1/2 AE 0.50 626.59 648.61 1,297.23
1/4 AE 0.25 316.36 330.46 1,321.82
1/10 AE 0.10 129.00 134.64 1,346.41
Aust. 100 corona 0.98 1,199.23 1,208.23 1,232.63
British sovereign 0.24 291.62 304.62 1,294.05
French 20 franc 0.19 231.29 235.29 1,260.25
Krugerrand 1.00 1,243.13 1,253.13 1,253.13
Maple Leaf 1.00 1,239.60 1,253.60 1,253.60
1/2 Maple Leaf 0.50 707.02 645.54 1,291.08
1/4 Maple Leaf 0.25 313.55 328.92 1,315.67
1/10 Maple Leaf 0.10 130.34 134.03 1,340.26
Mexican 50 peso 1.21 1,474.99 1,485.99 1,232.47
.9999 bar 1.00 1,233.90 1,241.60 1,241.60
SPOT SILVER: 15.25      
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 12,655.50 13,013.00 18.20
US 40% silver 1/2s 0.30 4,380.75 4,542.75 15.40
100 oz .999 bar 100.00 1,550.00 1,575.00 15.75
10 oz .999 bar 10.00 154.00 159.00 15.90
1 oz .999 round 1.00 15.35 15.81 15.81
Am Eagle, 200 oz Min 1.00 16.75 18.00 18.00
SPOT PLATINUM: 943.40      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 958.40 988.40 988.40
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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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