The Moneychanger
Daily Commentary
Tuesday, 7 June a.d. 2016 Browse the commentary archive

The lowest risk place to buy a rallying market is the bottom of Wave 2.

It's not safe to buy tumbling toward the bottom, where the first wave up begins. Wherever you buy, you have no signal that it won't drop further. Even after it has bottomed & begun to climb, there's little indication it won't collapse to a lower low.

Ahh, but once that climb peaks (Top of Wave 1 up), the market corrects in Wave 2 down. AFTER that Wave 2 bottoms you have the very lowest risk place to buy, because when Wave 2 bottoms and turns up into Wave 3 up, it proves that it isn't aiming for a lower low than where Wave 1 up began.

Looking at the gold chart, Wave 1 up began on 17 December 2015 at the $1,046.80 intraday low. It topped at an intraday high of $1,306.00 on 2 May, & began dropping in Wave 2 down. If (if, note) I am correctly identifying that as Wave 2's bottom, then right now gold and silver are at the lowest risk buy points. They have just finished posting a bottom to Wave 2, and next come what is usually the strongest, wildest leg of a rally, Wave 3 up. Remember, however, both may move sideways through the next two months before they begin rallying in earnest.

This explains why I am so strongly recommending buying metals right now.

But, of course, I could be wrong.

Buttressing the case for a low in the gold and silver correction are platinum, and Palladium,

Both dropped steadily into January lows, both climbed strongly off that low, both as May opened. Drawing trading channels up from those lows, both have not touched back to their bottom boundaries. From there both have moved higher, and should move higher still.

Silver & gold are hanging fire at the 50 day moving averages. Today on Comex gold backed off a measly twenty cents to $1,244.40 while silver lost 5.1¢ to 1637.7¢.

Drawing a new (blue dashed) downtrend line for silver, chart looks like this,

Silver trampolined off its lower channel boundary up to its 50 & 20 day moving averages, which now coincide roughly with the downtrend line from 1 May. Tomorrow that line stands at 1649¢ so silver needs to close above that to improve Friday's gain.

Cramped into a small ($12.10) range today, gold couldn't go forward but refused to go back. Tomorrow the downtrend line from the 1 May high stands at $1262. Gold must punch through that 50 DMA & move higher or squander its gains from last Friday.

Sort of like heroin addiction, the stock market works until it doesn't. Dow today added 17.95 (0.1%) to 17,938.28. S&P500 made another high close for 2016 at 2,112.13, up 2.72 or 0.13%. Not sure where it's going, but I don't want a ride.

US dollar index tossed back another 6 basis points today to land at 93.83. Can't get any traction. Down below keep an eye on 92.50, which for a year has served as the bottom range boundary. If the dollar stumbled through that, it would be fatal.

Remember that summer historically is a low season for precious metals, slow and quiet usually. Only upcoming event that might change that is Brexit. If the British vote to leave the EU, the euro & pound sterling will tank and gold and the dollar should soar.

On 7 June 1497 in Tordesillas, Spain, was drafted the Treaty of Tordesillas. Without consulting other interested parties, it divided the newly discovered lands in America along a line about half way between the Cape Verde Islands (already Portuguese) and the Caribbean islands already claimed by Christopher Columbus for Castile. Everything east of the line would belong to Portugal, everything to the west to Castile. The Treaty explains why Brazilians speak Portuguese instead of Spanish. That North Americans speak English explains how much attention the English paid to the treaty.

I offer the example to point out that arrogance did not begin with the American empire. SPECIAL OFFERS

Here are two Special Offers, based on spot gold at $1,244.40 & spot silver at $16.377


When Napoleon Bonaparte took over France, he publicly burned the engraving plates that had been used to print the Revolution's inflationary paper money, and said, "I will pay cash or pay nothing." To his credit, he established a gold & silver money & never resorted to paper.

On his 90% fine (21.6 karat) 20 franc coin containing 0.1867 tr. Oz. gold, was founded the Latin Monetary Union. All the nations who joined that union minted their gold coins to the same standard: French 20 francs, Swiss 20 francs, Belgian 20 francs, Italian 20 Lira, Greek 20 drachmai, Serbia, Bulgaria, Albania, and on and on.

20 Franc coins remain among the most popular and common in the world, traded all over the globe. I have sixteen lots of ten each SWISS 20 francs, the "Helvetia." I am offering them at $246.00 each, a 5.9% premium over their gold content, based on spot gold at $1,244.40

One lot contains Ten (10) Twenty franc gold coins at $246.00 each or a total of $2,460.00, plus $35 shipping for a total of $2,495. I have only 16 lots, and, YES, you may order multiple lots. Offer good only while supply lasts.

Ordering multiple lots? We charge shipping only once. The last order filled will include One (1) Belgian or French 20 francs & 19 Swiss.


The clever South Africans revolutionized the gold coin world when in 1967 they introduced their Krugerrands, 22 karat (91-2/3% pure gold) containing exactly one ounce of fine gold. It took the world by storm.

Today Krugerrands are $15 - $25 cheaper than American Eagles, minted to exactly the same specifications but with a different impress.

I have six lots of five coins each at $1,293.00 each (a 3.9% premium), or $6,465.00 per five coin lot, plus $35 shipping for a total of $6,500.

Ordering multiple lots? We charge shipping only once.

Special Conditions:

First come, first served, and no re-orders at these prices. I will write orders based on the time I receive your e-mail.

Sorry, we will not take orders for less than the minimum shown above.

All sales on a strict "no-nag" basis. We will ship as soon as your check clears, but we allow Two weeks (14 days) for your check to clear. Calls looking for your order two days after we receive your check will be politely and patiently rebuffed. ORDERING INSTRUCTIONS:

1. You may order by e-mail only to No phone orders, please. Please do NOT order by replying to THIS email, because it will delay your email.

Your email must include your complete name, address, & phone number. We cannot ship to you without your address. Sorry, we cannot ship outside the United States or to Tennessee.

2. When you buy from us, we cannot later change or cancel the trade. We are giving you our word that we will sell at that price, & you are giving us your word that you will buy at that price, regardless what later happens in the market, up or down.

If you break your word to us, we will never again do business with you.

3. "First come, first-served" means that we will enter the orders in the order that we receive them by e-mail, till supply is exhausted.

4. If your order is filled, we will e-mail you a confirmation. If you do not receive a confirmation, your order was not filled.

5. You must send payment by personal check or bank wire (either one is fine) within 48 hours. It just needs to be in the mail, not in our hands, in 48 hours. Sorry, no credit cards.

7. "No Nag Basis" means that we allow fourteen (14) days for personal checks to clear before we ship.

Want your order faster? Send a bank wire, but that's not required. Once we ship, the post office takes four to fourteen days to get the registered mail package to you. All in all, you'll see your order in about one month if you send a check.

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
7-Jun-16 Price Change % Change
Gold, $/oz 1,244.40 -0.20 -0.02%
Silver, $/oz 16.38 -0.05 -0.31%
Gold/Silver Ratio 75.985 0.224 0.30%
Silver/Gold Ratio 0.0132 -0.0000 -0.29%
Platinum 998.40 2.90 0.29%
Palladium 552.95 -4.10 -0.74%
S&P 500 2,112.13 2.72 0.13%
Dow 17,938.28 17.95 0.10%
Dow in GOLD $s 297.99 0.35 0.12%
Dow in GOLD oz 14.42 0.02 0.12%
Dow in SILVER oz 1,095.33 4.49 0.41%
US Dollar Index 93.83 -0.06 -0.06%
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: 1,243.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,278.73 1,285.57 1,285.57
1/2 AE 0.50 633.88 656.16 1,312.31
1/4 AE 0.25 320.05 334.30 1,337.19
1/10 AE 0.10 130.50 136.21 1,362.07
Aust. 100 corona 0.98 1,213.17 1,222.17 1,246.86
British sovereign 0.24 295.01 308.01 1,308.45
French 20 franc 0.19 233.98 237.98 1,274.65
Krugerrand 1.00 1,253.85 1,263.85 1,263.85
Maple Leaf 1.00 1,253.90 1,267.90 1,267.90
1/2 Maple Leaf 0.50 715.24 653.05 1,306.10
1/4 Maple Leaf 0.25 317.19 332.74 1,330.97
1/10 Maple Leaf 0.10 131.85 135.59 1,355.85
Mexican 50 peso 1.21 1,490.65 1,501.65 1,245.46
.9999 bar 1.00 1,248.25 1,255.90 1,255.90
SPOT SILVER: 16.39      
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 12,215.78 12,500.78 17.48
US 40% silver 1/2s 0.30 4,715.58 4,877.58 16.53
100 oz .999 bar 100.00 1,663.50 1,688.50 16.89
10 oz .999 bar 10.00 165.35 170.35 17.04
1 oz .999 round 1.00 16.49 16.95 16.95
Am Eagle, 200 oz Min 1.00 17.89 19.14 19.14
SPOT PLATINUM: 998.40      
Plat. Platypus 1.00 1,013.40 1,043.40 1,043.40
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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.

Other Important Information

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