The Moneychanger
Weekly Commentary
Friday, 26 February a.d. 2016 Browse the commentary archive
Here's the weekly scorecard:
  19-Feb-16 26-Feb-16 Change % Change
Silver, cents/oz. 1,536.80 1,468.90 -67.90 -4.4
Gold, dollars/oz. 1,230.40 1,219.80 -10.60 -0.9
Gold/silver ratio 80.062 83.042 2.979 3.7
Silver/gold ratio 0.0125 0.0120 -0.0004 -3.6
Dow in Gold Dollars (DIG$) 275.40 282.00 6.60 2.4
Dow in gold ounces 13.32 13.64 0.32 2.4
Dow in Silver ounces 1,066.63 1,132.82 66.19 6.2
Dow Industrials 16,391.99 16,639.97 247.98 1.5
S&P500 1,917.78 1,948.05 30.27 1.6
US dollar index 96.65 98.10 1.45 1.5
Platinum 944.60 914.50 -30.10 -3.2
Palladium 499.25 482.10 -17.15 -3.4

Whatever you think of Donald Trump, you'd do well to note the appeal of his message, & why it is giving hissy fits to our Elite masters & their press pimps. Trump's message is "no more immigration," "end overseas meddling," and "bring back jobs." This flies in the face of the globalist & elitist program to homogenize all populations & to globalize the economy (read: ship American jobs to lowest wage countries). Trump taps into the justified resentment of the American working classes. This doesn't say Trump if elected would put his message into force: that's another question. Still, it's superbly amusing to watch the Republican Establishment, the Elite, and the media do the Trump-squirm like cicada-worms trying to shed their skins. Thanks for the laughs, Donald.

It was a hard week for the little things. Silver & gold were badly battered today. Stocks dipped today but held on to a weekly gain. US dollar index surprised all by coming alive today & springing up 1.5% for the week. Silver & gold took the beating today they've been wincing for all week, but it's better than okay. Clears the road for next advance. Platinum & palladium both got hammered, down over 3%.

First the dollar, ugly duckling turned into ugly duck. Good news in lying government reports today goosed it 81 basis points (0.84%) to 98.10. Noteworthy here is a close above 97.50 resistance but not quite above the 98.14 50-DMA -- a line which might mark the limit of the dollar's advance. Still, odds favor higher dollar next week, probably riding optimism bleeding out of stocks. Picture's here,

Euro nailed its own coffin shut today, closing below the lower range boundary that has contained most trading since last June. Lost 0.8% to $1.0937. Yen has unarguably broken its uptrend, taking much pressure off the Nipponese Nice Government Men. Sank 0.85% to 87.72.

West Texas Intermediate Crude can't pierce $34.50 resistance -- yet. Fell back 0.91% to $32.78. Trying to bottom, but so weakly. Go look, Copper didn't care & rose 1.73 to $2.11. No change here until it scales $2.15.

Not much joy in Stockville today. 'Twas a day of steady loss, dwindling, dwindling through the day. Dow gave up 57.32 (0.34%) to 16,639.97. S&P500 lost 0.19% (3.65) to1,948.05. That puts the Dow above resistance (16,600 & the 50 DMA at 15,686) & the S&P500 stalled -- just over the 1,944 50 DMA but feet still tangled in 1950 resistance.

Both can still rise a tad, but not much -- not more than 17,000 & 2,000. This may take another two weeks to unroll.

In the Dow measured in metals, the upward correction we anticipated is working itself out. Dow in gold keeps vibrating up & down over the uptrend line from the 2011 low, and today bumped into the 20 DMA (13.65 troy ounces). Rose 0.74% to end at 13.63 troy ounces. Might stretch for the 50 DMA, now at 14.75 oz, before it exhausts. Chart is found at

Dow in silver reacheth for the 200 DMA (1,146.45 tr. Oz). 200 & 50 DMA are about to run together. DiS lifted 2.72% today to 1,132.82 troy ounces. After the fall we have seen since the December peak, this is nothing unusual. Chart:

Don't miss the point: back of stocks' rally against metals that began in September 2011 has been BROKEN. Trend change to DOWN. For the next several years, gold & silver will gain value against stocks (stocks will become cheaper in silver & gold terms).

Never say never with markets. Gold/silver ratio pushed through the range's top boundary today and ended Comex at 83.042. Owch. If not an anomaly, I don't want to imagine what it might mean. Way, way overbought, so you'd expect it to fall next week. That implies gold would drop & catch up to silver. GREAT time to swap gold for silver. Call us at (931) 766-6066. Here's a ratio chart,

Owch. Silver tumbled 48.1¢ (3.2%) to 1468.9¢. Gold stumbled $18.40 (1.4%) to $1,219.80.

A letter I got from a reader today left me wondering if I have given y'all a misapprehension about my expectations. I firmly believe that gold & silver's long correction bottomed with the December 2015 lows. However, after that huge breakout burst on 11 February, a correction became likely. That's what I've been looking for all week, & it materialized today.

Why is a correction good news? Because it will clear the way for the next rally.

Silver fell out of an even-sided triangle and clean through its 200 DMA (1505¢). IF (if) it does not stop around here, it cuold reach the 50 DMA at 1447¢ or lower. Volume today dried up, so this retreat shouldn't last much longer. Also, the top of that bowl that silver broke out of stands at 1440¢. That ought to support silver. Here's a 9-month chart,

Gold fell to the nether boundary of that bear flag. That pattern usually breaks out earthward. Target is $1,180, maybe lower on a scare-spike. This will not drag on for long. Y'all should take EVERY retreat as an opportunity to buy silver & gold at a price that will leave you bragging to your grandbabies. Gold chart is here,

On 26 February 1848 Karl Marx & Friedrich Engels published the Communist Manifesto. Simply no telling what oceans of blood, death, & sorrow that released.

On 25 February 1863 the yankee congress passed the National Banking Act, part of the Lincoln government's attempt to float its bonds for an upopular war. This was the embryo of a central bank in the US, another of Lincoln's crimes.

On 25 February 1893 two Clydesdale horses set the record by pulling 48 tons on a sledge in Michigan. Think about that. 96,000 lbs. On a sledge, not a wheeled vehicle. From a sandstill. Those Clydesdales probably weighed less than 2,200 lb apiece.

Susan's eye is growing better day by day. Thanks again for your prayers.

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
26-Feb-16 Price Change % Change
Gold, $/oz 1,219.80 -18.40 -1.5
Silver, $/oz 14.69 -0.48 -3.2
Gold/Silver Ratio 83.042 -1.225 -1.5
Silver/Gold Ratio 0.0120 -0.0004 -3.2
Platinum 914.50 -12.00 -1.3
Palladium 482.10 -1.30 -0.3
S&P 500 1,948.05 -3.65 -0.2
Dow 16,639.97 -57.32 -0.3
Dow in GOLD $s 282.00 3.26 1.2
Dow in GOLD oz 13.64 0.16 1.2
Dow in SILVER oz 1,132.82 32.14 2.9
US Dollar Index 97.10 0.81 0.8
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: 1,223.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,253.58 1,273.14 1,273.14
1/2 AE 0.50 623.22 645.13 1,290.27
1/4 AE 0.25 314.67 328.68 1,314.73
1/10 AE 0.10 128.31 133.92 1,339.19
Aust. 100 corona 0.98 1,192.79 1,201.79 1,226.07
British sovereign 0.24 290.05 303.05 1,287.40
French 20 franc 0.19 230.05 234.05 1,253.60
Krugerrand 1.00 1,236.45 1,246.45 1,246.45
Maple Leaf 1.00 1,233.00 1,247.00 1,247.00
1/2 Maple Leaf 0.50 703.23 642.08 1,284.15
1/4 Maple Leaf 0.25 311.87 327.15 1,308.61
1/10 Maple Leaf 0.10 129.64 133.31 1,333.07
Mexican 50 peso 1.21 1,467.08 1,478.08 1,225.91
.9999 bar 1.00 1,227.28 1,235.00 1,235.00
SPOT SILVER: 14.73      
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 12,283.70 12,641.20 17.68
US 40% silver 1/2s 0.30 4,227.35 4,389.35 14.88
100 oz .999 bar 100.00 1,498.00 1,523.00 15.23
10 oz .999 bar 10.00 148.80 153.80 15.38
1 oz .999 round 1.00 14.83 15.29 15.29
Am Eagle, 200 oz Min 1.00 16.23 17.48 17.48
SPOT PLATINUM: 914.50      
Platinum Platypus 1.00 929.50 959.50 959.50
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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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