The Moneychanger
Weekly Commentary
Friday, 11 March a.d. 2016 Browse the commentary archive
Here's the weekly scorecard:
  4-Mar-16 11-Mar-16 Change % Change
Silver, cents/oz. 1,568.10 1,560.70 -7.40 -0.5
Gold, dollars/oz. 1,269.90 1,258.70 -11.20 -0.9
Gold/silver ratio 80.983 80.650 -0.334 -0.4
Silver/gold ratio 0.0123 0.0124 0.0001 0.4
Dow in Gold Dollars (DIG$) 276.84 282.70 5.86 2.1
Dow in gold ounces 13.39 13.68 0.28 2.1
Dow in Silver ounces 1,084.55 1,102.92 18.38 1.7
Dow Industrials 17,006.77 17,213.31 206.54 1.2
S&P500 1,999.99 2,022.19 22.20 1.1
US dollar index 97.34 96.23 -1.11 -1.1
Platinum 985.80 969.20 -16.60 -1.7
Palladium 563.10 580.45 17.35 3.1

First, a small meditation. Almost all of the US dollar index's rise from July 2014 was furnished by HOT AIR. That is, without doing anything substantial to improve the currency or economy, by continually hinting they would raise interest rates, Fed apparatchiki built the market's expectation the dollar must rise. They sent out their mouthpieces to jawbone, & of course other mouthpieces to counter-jawbone to make the scam more believable.

Central banks' credibility is vanishing. Yesterday Draghi announced ECB moves that should weaken the euro. Instead, they sent it shooting up and the dollar down. Reality is flying home to roost on the central banks. That's going to make a big, big mess.

TO MARKETS: The week's ending closes didn't answer the questions buzzing around my skull. Silver & gold backed off for the week, but only today. Stocks would have been in negative territory had they not rallied today. Dollar index remains as weak & puking sick as an 11 year old learning to smoke cheap cigars -- puff & puke, puff & puke.

Today that US dollar index bounced the way a road-killed possum bounces when you pick him up with a shovel and throw him in the ditch. No life in it. It rose 11 basis points (0.11%) to close at 96.23. Dollar index has gotten down to serious stuff now, sunk down way below its 200 DMA (97.09) and hovering a bald 75 bips from that 92.50 live-or-die support. Next week won't be filled with gardenias for the dollar index. http://schrts.co/OkJ5UT

Euro gave back some of its central-bank-ill-gotten gains from yesterday. Lost 0.3% to close at $1.1146. Mirror-imaging the dollar's plunge yesterday, today it eased off. However, technically it has broken out toward the sun. Yen gave back 0.54% today, ending at 87.86. Underneath its 20 DMA (88.28) but still hovering up high.

My land, stocks jes' showed out today! Dow pushed up 218.18 (1.28%) to a new high for 2015 at 17,213.31. S&P500 outdid the Dow, climbing 32.62 (1.64%) to 2,022.19. Makes you wonder what sort of lunatic enthusiasm could induce folk to bid that Dow up over the 200 DMA (17,153.24). Lawsy, the Wall Street media pimps will be crowing over that! I, on the other hand (and this might not surprise y'all much) see stocks reaching the outer limit of their upward correction. It's the bear luring more victims into his cave.

Even with gold down and the Dow up, the Dow in Gold couldn't climb above the uptrend line from the 2011 low. Pee-yuny. Ended at 13.76 oz. http://schrts.co/8Sv0tc

Dow in silver is a little more complicated, but it, too, is retreating, dropping away from the 200 DMA (1,148.71 oz) & tapping on that post-2011 uptrend line. Ended today at 1,109.82 oz. http://schrts.co/ohwLZP

Both these charts are hinting stocks have not much further to climb.

Gold fell back $13.30 (1.05%) for a Comex close at $1,258.70. In the aftermarket it was trading at $1,250.60, $21.40 below yesterday's Comex close. Silver gained 6.1¢ (0.4%) to 1,560.7¢.

I hate to make a decision on one of those hysterical "Central bank threw a surprise party" days. That's why I was holding back yesterday. The CFTC's Commitments of Traders reports is negative for both silver and gold. Moving Average Convergence Divergence (MACD) indicator has turned down for both. RSI is heading down.

Now add to all that gold's retreat today, failing to build on yesterday's gain. Like Beauregard at First Manassas. And silver has gotten nowhere near its 1599¢ high. All this adds to the likelihood of a correction. Whip me if you want, that's what the charts say. I will clap my hand over my mouth and stand tear-drippin' and chastened if silver closes above 1599¢ AND gold closes over $1,280, because that will mean I am dead wrong about any correction.

But jes' because I'm a nat'ral born durned fool from Tennessee, even if the market whomps me this time, I'll go right back at it. Fools never learn. Shucks, that's what makes 'em fools!

Before I leave, I observe that silver & gold have broken out on their weekly charts and gold has broken out upside on its monthly chart, too. So what I am watching for is a correction, not a reversal of the trend. Trend turned up in December.

On 11 March 1861 the Confederate States convention in Montgomery, Alabama adopted a new constitution.

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
11-Mar-16 Price Change % Change
Gold, $/oz 1,258.70 -13.30 -1.0
Silver, $/oz 15.61 0.06 0.4
Gold/Silver Ratio 80.650 -0.855 -1.0
Silver/Gold Ratio 0.0124 0.0000 0.4
Platinum 969.20 -8.00 -0.8
Palladium 580.45 6.10 1.1
S&P 500 2,022.19 32.62 1.6
Dow 17,213.31 218.18 1.3
Dow in GOLD $s 282.70 6.53 2.4
Dow in GOLD oz 13.68 0.32 2.4
Dow in SILVER oz 1,102.92 9.71 0.9
US Dollar Index 96.23 0.11 0.1
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: 1,250.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,281.87 1,301.87 1,301.87
1/2 AE 0.50 637.30 659.69 1,319.38
1/4 AE 0.25 321.77 336.10 1,344.40
1/10 AE 0.10 131.21 136.94 1,369.41
Aust. 100 corona 0.98 1,218.48 1,227.48 1,252.28
British sovereign 0.24 296.60 309.60 1,315.20
French 20 franc 0.19 235.24 239.24 1,281.40
Krugerrand 1.00 1,263.11 1,273.11 1,273.11
Maple Leaf 1.00 1,260.60 1,274.60 1,274.60
1/2 Maple Leaf 0.50 719.10 656.57 1,313.13
1/4 Maple Leaf 0.25 318.90 334.54 1,338.14
1/10 Maple Leaf 0.10 132.56 136.32 1,363.15
Mexican 50 peso 1.21 1,498.68 1,509.68 1,252.12
.9999 bar 1.00 1,254.98 1,262.60 1,262.60
SPOT SILVER: 15.50      
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 12,619.75 12,869.75 18.00
US 40% silver 1/2s 0.30 4,454.50 4,616.50 15.65
100 oz .999 bar 100.00 1,575.00 1,600.00 16.00
10 oz .999 bar 10.00 156.50 161.50 16.15
1 oz .999 round 1.00 15.60 16.06 16.06
Am Eagle, 200 oz Min 1.00 17.00 18.25 18.25
SPOT PLATINUM: 969.20      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 984.20 1,014.20 1,014.20
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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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