The Moneychanger
Daily Commentary
Friday, 15 April a.d. 2016 Browse the commentary archive

I don't say this every day, but every so often it needs saying.

There ain't much gold & silver in the world. Viewed against history, gold & silver are insanely undervalued. I saw an article today by a famous economist who claimed that to back (really back, not gold plate) the US dollar with gold would call for a price at $10,000 an ounce.

Whoa!! Slap your face. Forget the fear & greed & be sober. The door into the silver & gold markets is surpassingly narrow & the lintel quite low. Large crowds cannot simultaneously press through. You must pass through BEFORE the crowds arrive.

We sell a LOT of Austrian 100 coronas. Why? Because they are so much cheaper than other gold coins (except Mexican 50 pesos). I can sell them cheaper than one ounce gold bars, and who wouldn't rather have a coin than a cheesy bar? Besides, over time premium always disappears, so dollars spent on premium today will not return when you sell at market peak. (Did your dealer bother to tell you that? Or was he too busy taking orders? Or was he a website? Maybe you ought to call us.)

Lately Austrian 100s are teaching me again that there ain't much gold & silver in the world. They're the lowest cost buy on the market, and they've vanished. Can't find 'em.

Always get the most gold and silver you can get for your money. Compare this: On a $40,000 purchase today, buying Austrian 100 coronas nets you 0.9475 ounce more gold than American Eagles, or 0.723 oz. more than Krugerrands.

At market peak, nobody will care what KIND of ounces you have, only HOW MANY. Over time, premium always disappears.

TODAY'S MARKETS:

Somebody ought to pour some salt on that US Dollar Index, slug that it is. It broke upside out of a falling wedge last week, then acted like a roach facing a can of Raid at the 50 DMA. Headed for the woodwork. Today it fell again, 22 basis points (0.23%) to 94.47.

Mighty lot of teetering & tottering for a market meaning to rise. Recall that the dollar index stands at a crucial crossroad. If it falls through 93.62 (last low), it enters peril of dropping far, far lower. If it holds here and rises, it might rally the rest of the year.

Stocks' bear market rally is so baseless & so stubborn that I am beginning to see the Invisible Hand of the Nice Government Men behind it. One wonders why they are so stupid as to stand commanding the sea to rise, like King Canute but without as much class.

Dow today rose 106.70 (0.6%) to 18,004.16. S&P500 gained 13.61 (0.65%) to 2,094.34. Walkin' on air.

Gold rose 50 little cents to $1,233.60 on Comex. Silver pared off six cents to 1624.9ยข. Given the overnight panic over oil dropping, I thought gold held up very well. Of course, the dollar index fell, too, which didn't hurt.

I got to feeling like a lunatic, expecting silver to rise through the top of this trading channel, seen here. http://schrts.co/vJfxKN

Mark, however, that silver has in fact traded clean through -- not much, but through -- the downtrend line from the April 2011 high. Maybe I'm not such a lunatic. Maybe silver will power on through.

Gold was lethargic today trying to punch through it s20 & 50 day moving averages, practically at the same place ($1,234.81 and $1,234.26). MACD has turned down, ROC is pointing down, & RSI is neutral. Prepare yourself for a little drop. Gold will hang on as long as it doesn't close below $1,218. Chrt's here, http://schrts.co/4N1Q5n

I keep scratching my scalp and asking, "Why ain't gold & silver breaking down? What are we not seeing? What are they whispering?" I reckon before too long they'll commence shouting.

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
18-Apr-16 Price Change % Change
Gold, $/oz 1,233.60 0.50 0.04%
Silver, $/oz 16.25 -0.06 -0.37%
Gold/Silver Ratio 75.919 0.310 0.41%
Silver/Gold Ratio 0.0132 -0.0001 -0.41%
Platinum 976.40 -12.10 -1.22%
Palladium 569.05 -0.25 -0.04%
S&P 500 2,094.34 13.61 0.65%
Dow 18,004.16 106.70 0.60%
Dow in GOLD $s 301.70 1.67 0.56%
Dow in GOLD oz 14.59 0.08 0.56%
Dow in SILVER oz 1,108.02 10.62 0.97%
US Dollar Index 94.47 -0.22 -0.23%
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: 1,232.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,267.73 1,273.27 1,273.27
1/2 AE 0.50 627.81 649.88 1,299.76
1/4 AE 0.25 316.98 331.10 1,324.40
1/10 AE 0.10 129.26 134.90 1,349.04
Aust. 100 corona 0.98 1,201.57 1,210.57 1,235.02
British sovereign 0.24 292.19 305.19 1,296.47
French 20 franc 0.19 231.74 235.74 1,262.66
Krugerrand 1.00 1,245.55 1,255.55 1,255.55
Maple Leaf 1.00 1,242.00 1,256.00 1,256.00
1/2 Maple Leaf 0.50 708.40 646.80 1,293.60
1/4 Maple Leaf 0.25 314.16 329.56 1,318.24
1/10 Maple Leaf 0.10 130.59 134.29 1,342.88
Mexican 50 peso 1.21 1,474.90 1,485.90 1,232.40
.9999 bar 1.00 1,236.31 1,244.00 1,244.00
SPOT SILVER: 16.23      
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 12,244.38 12,564.38 17.57
US 40% silver 1/2s 0.30 4,668.38 4,830.38 16.37
100 oz .999 bar 100.00 1,647.50 1,672.50 16.73
10 oz .999 bar 10.00 163.75 168.75 16.88
1 oz .999 round 1.00 16.33 16.79 16.79
Am Eagle, 200 oz Min 1.00 17.73 18.98 18.98
SPOT PLATINUM: 976.40      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 991.40 1,021.40 1,021.40
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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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