The Moneychanger
Daily Commentary
Wednesday, 8 June a.d. 2016 Browse the commentary archive

As I was saying yesterday, "The lowest risk place to buy a rallying market is the bottom of Wave 2." Today markets seconded that with a LOUD Amen. After yesterday's lows Silver & Gold came today ready to PARTY. Most of it happened while we slept. At 1:00 a.m. Eastern, gold was still below $1,250, but it steadily rose and rose to $12,55 by 9:00, then shot up to $1,267.30 about 11:00. Time I got in here early this morning, gold was already at $1,260. To late to hop on for that leg, but not too late for the LONG ride.

Silver outperformed gold. Gold rose $15.40 (1.2%) to close Comex at $1,259.80. Silver vaulted 59.1¢ (3.6%) to 1696.8¢. Gold/Silver Ratio sank 2.3% to 74.246.

Story doesn't stop there by any means. Gold pierced those 20 & 50 DMAs like a 20 gauge needle punching through cowhide, and closed right on that downtrend line that yesterday seemed to hover so far above. Turns out gold needed only one day to reach it. Look for yourself,

Behold silver,

After Friday's leap, silver hunkered down for two days then jumped for all it was worth today, brushing through 50 day moving average, 20 DMA, & downtrend line like they were bead curtains.

All this has the manic feel of a wild Wave 3 beginning. Yes, there's more resistance to be conquered at 1760¢ and 1806¢, and at $1,265 and $1,287, but gold has already jumped two resistance levels. Doesn't seem to bother it or slow it down.

As I said yesterday, I would be buying metals now.

Platinum and palladium look much like silver & gold, trading right up to the downtrend lines but not quite punching through. Confirming silver & gold.

US dollar index hurt itself badly today, falling 22 basis points (0.23%). It has now sunk to the area that caught it earlier this year (93.62), for a while. Watch 92.50, where the dollar must hold or perish.

Stocks millimetered up again, completing the right shoulder of a head & shoulders top. Within that, both the S&P500 & Dow are forming rising wedges, which I recall usually resolve dirtward. Dow closed at 18,005.05, up 66.77 (0.37%) S&P500 added 6.99 (0.33%) to 2,119.12. Confucius says, "When plug is pulled, water will speedily drain out, taking stock profits with it."

On 8 June 1861 Tennessee voted to secede from the Union and joined the Confederate States of America by a plebiscite vote of 104,913 to 47,238. Most all those no votes came from East Tennessee. The secession ordinance begins, "We, the people of the State of Tennessee, waiving any expression of opinion as to the abstract doctrine of secession, but asserting he right, as a free & independent people, to alter, reform, or abolish our form of government in such manner as we think proper . . . "

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
8-Jun-16 Price Change % Change
Gold, $/oz 1,259.80 15.40 1.24%
Silver, $/oz 16.97 0.59 3.61%
Gold/Silver Ratio 74.246 -1.739 -2.29%
Silver/Gold Ratio 0.0135 0.0003 2.34%
Platinum 1,011.30 12.90 1.29%
Palladium 562.00 9.05 1.64%
S&P 500 2,119.12 6.99 0.33%
Dow 18,005.05 66.77 0.37%
Dow in GOLD $s 295.44 -2.55 -0.85%
Dow in GOLD oz 14.29 -0.12 -0.85%
Dow in SILVER oz 1,061.12 -34.22 -3.12%
US Dollar Index 93.61 -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: 1,262.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,297.34 1,304.28 1,304.28
1/2 AE 0.50 643.11 665.71 1,331.41
1/4 AE 0.25 324.71 339.16 1,356.65
1/10 AE 0.10 132.41 138.19 1,381.89
Aust. 100 corona 0.98 1,230.83 1,239.83 1,264.87
British sovereign 0.24 299.30 312.30 1,326.69
French 20 franc 0.19 237.38 241.38 1,292.89
Krugerrand 1.00 1,273.36 1,283.36 1,283.36
Maple Leaf 1.00 1,272.00 1,286.00 1,286.00
1/2 Maple Leaf 0.50 725.65 662.55 1,325.10
1/4 Maple Leaf 0.25 321.81 337.59 1,350.34
1/10 Maple Leaf 0.10 133.77 137.56 1,375.58
Mexican 50 peso 1.21 1,512.34 1,523.34 1,263.45
.9999 bar 1.00 1,266.42 1,274.00 1,274.00
SPOT SILVER: 17.04      
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 12,609.03 12,894.03 18.03
US 40% silver 1/2s 0.30 4,907.33 5,069.33 17.18
100 oz .999 bar 100.00 1,728.50 1,753.50 17.54
10 oz .999 bar 10.00 171.85 176.85 17.69
1 oz .999 round 1.00 17.14 17.60 17.60
Am Eagle, 200 oz Min 1.00 18.54 19.79 19.79
SPOT PLATINUM: 1,011.30      
Plat. Platypus 1.00 1,026.30 1,056.30 1,056.30
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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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