The Moneychanger
Daily Commentary
Monday, 6 June a.d. 2016 Browse the commentary archive

Oh, ho! So many of you visited the website that Dropbox limited access to the podcast I did on David Simpson's Truth About Money Show. Try this one,

Most people would rather appear in public naked than speak in public, so do they fear public speaking. But imagine the worst. Imagine having to speak in public for 30 or 45 minutes without ever saying anything but still sounding coherent.

That is the task assigned to the Fed's Head Nebbish, Janet Yellen. What she gives out of the curled lips of the right side of her mouth, she taketh immediately away through the curled lips of the left side. Why, she says everything, but she says nothing. I can't decide whether this is genius, incompetence, or moronism. More moronic still are those poor lost souls who hang on her every feckless word as if it really meant something! You may be broke and ugly, stinking and homeless, but you ain't fallen that low yet! Taking Janet Yellen seriously is like taking Moe of the Three Stooges seriously. Impossible for the rational mind: world's largest economy hostage to Curly, Larry, & Moe.

So Nebbish Janet spoke today to the World Affairs Council in Philadelphia where she said -- are y'all ready? -- nothing.

I suppose but can't really rouse myself to care that Chatty Janet's speech goosed stocks, although I remain baffled why threatening to raise interest rates would improve the outlook for stocks. It's a fool that seeks logic in a market's head. Dow rose 113.27 (0.64%) to 17,920.33 while the S&P500 gained 10.28 (0.5%) for its highest close (not intraday high) of 2016. I ought to add "until they lose it all & then some tomorrow."

Stocks are still outlining a head & shoulders top. 'Twill wreak its vengeance.

Wallowing in its shame & weakness, the US dollar index slipped another 5 basis points (0.06%) to 93.97. Let us count the weaknesses. It failed at 95.50+ resistance, it failed to approach its 200 day moving average, it slid a massive 1.61% Friday, it sliced through its 50 & 20 day moving averages, turning momentum down, and it fell through the upper boundary of the downward trending channel it had broken out of in May. Did I forget anything?

Y'all look for yourselves,

It will take a long time to repair that mess.

Oil (West Texas Intermediate Crude) has walked through the uptrend line, which also serves as the bottom boundary of a bearish rising wedge. Yet it continueth above its 20 DMA (now $48.18). It ever anything looked ready to full down a manhole, it's oil.

On Comex Gold bumped up $4.50 (0.4%) to $1,244.60. Silver climbed 8.2¢ (0.5%) to 1642.8¢.

Here hideth the gold chart,

Gold tangled its feet in the entertwined 50 DMA ($1,248.46) & 20 DMA ($1,247.49). It pushed up into them, but couldn't close there. Not sterling, but not fatal, either. On the upside, gold needs to conquer $1,272. Of course, it can't be called "breaking out" until it betters $1,306, he interday high on 1 May. I expect we may be doomed to a couple of months sideways trading before gold seriously rallies.

Silver's chart is here, with a new trendline added,

Silver couldn't quite close above its 50 DMA (1648¢) & remains a ways below its 20 DMA (1664¢). However, it has snuggled right up to the downtrend line from the 1 May high, which right now the 20DMA is paralleling. Up above, silver must fight through 1690¢ and the 1700s, but the breakout test awaits at 1806¢.

So far nothing contradicts the conclusion that on 1 June we saw the LOWS for silver & gold, and that they will not in the future show those prices again. Me, I'm buying.

I may be dummer'n e'er a fence post, but I do get tired of the stupidity abounding all around. Christian Science Monitor (Neither "Christian" nor "Scientific") today ran an article, "How will US regulate private space travel?" These people in government & media can only think in terms of how THEY can control things, never in terms of freedom. No private company has even arrived in space yet, but when they get there, bureaucrats & regulations await them. Have these people never read any science fiction? It don't work that way. Besides, by what force will they control it?

If governments would get out of the way science nerds would be building space ships out of concrete truck mixers and establish two way traffic to the moon in a few years so your grandmama could fly there if she wanted. If government regulates space travel, she won't get there for 300 years.

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
5-Jun-16 Price Change % Change
Gold, $/oz 1,244.60 4.50 0.36%
Silver, $/oz 16.43 0.08 0.50%
Gold/Silver Ratio 75.761 -0.105 -0.14%
Silver/Gold Ratio 0.0132 0.0000 0.14%
Platinum 995.50 14.60 1.49%
Palladium 557.05 7.80 1.42%
S&P 500 2,109.41 10.28 0.49%
Dow 17,920.33 113.27 0.64%
Dow in GOLD $s 297.64 0.81 0.27%
Dow in GOLD oz 14.40 0.04 0.27%
Dow in SILVER oz 1,090.84 1.46 0.13%
US Dollar Index 93.97 -0.05 -0.05%
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: 1,244.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,279.76 1,286.60 1,286.60
1/2 AE 0.50 634.39 656.68 1,313.37
1/4 AE 0.25 320.30 334.57 1,338.27
1/10 AE 0.10 130.61 136.32 1,363.17
Aust. 100 corona 0.98 1,214.15 1,223.15 1,247.86
British sovereign 0.24 295.25 308.25 1,309.46
French 20 franc 0.19 234.17 238.17 1,275.66
Krugerrand 1.00 1,256.10 1,266.10 1,266.10
Maple Leaf 1.00 1,254.90 1,268.90 1,268.90
1/2 Maple Leaf 0.50 715.82 653.57 1,307.15
1/4 Maple Leaf 0.25 317.45 333.01 1,332.04
1/10 Maple Leaf 0.10 131.96 135.69 1,356.94
Mexican 50 peso 1.21 1,491.85 1,502.85 1,246.45
.9999 bar 1.00 1,249.26 1,256.90 1,256.90
SPOT SILVER: 16.47      
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 12,312.30 12,597.30 17.62
US 40% silver 1/2s 0.30 4,740.65 4,902.65 16.62
100 oz .999 bar 100.00 1,672.00 1,697.00 16.97
10 oz .999 bar 10.00 166.20 171.20 17.12
1 oz .999 round 1.00 16.57 17.03 17.03
Am Eagle, 200 oz Min 1.00 17.97 19.22 19.22
SPOT PLATINUM: 995.50      
Plat. Platypus 1.00 1,010.50 1,040.50 1,040.50
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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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