|Gold Price, $/oz||1,138.20||-15.20||-1.30%|
|Silver Price, $/oz||14.61||-0.15||-1.02%|
|Dow in GOLD $s||280.78||0.03||0.01%|
|Dow in GOLD oz||13.58||0.00||0.01%|
|Dow in SILVER oz||1,061.27||-2.92||-0.27%|
|US Dollar Index||94.11||0.75||0.80%|
|3 Day Gold Price Chart|
|30 Day Gold Price Chart|
|5 Year Gold Price Chart|
|3 Day Silver Price Chart|
|30 Day Silver Price Chart|
|5 Year Silver Price Chart|
What worries me here is the ghost of 2008, when the Ratio ran crazy up to 85:1. I am still trying to study out whether this stock market crash will send folks fleeing into dollars or gold. So far, it ain't dollars, but this one puzzle piece, the Ratio, won't fit yet no matter how I turn it.
I listen to the media and hear "experts" solemnly intoning that nothing is basically amiss in the global economy and that the US stock market will come back and I wonder: do they know they're lying, or is it pure-dee old ignorance and want of experience? I reckon when a man sells cotton candy, he ain't about to warn you of dental consequences. The word "wicked" comes to mind.
The Shanghai stock index lost 8.5% yesterday and another 7.63% today. Chinese central bank slashed its main interest rates 50 basis points (1/2 percent), its fifth rate cut in 9 months. Funny thing about Keynesians and government-must- control-the-economy people. Eternal optimists, they are never downcast when their illogical policies don't work. Undeterred, they always say that the policy didn't fail, we just didn't do enough of it. Dropping interest rates has been so successful in China that the Shanghai index has lost 2,201 points from its June high, or 42.6% Ditto a raft of other government measures to stop the Shanghai avalanche. Maybe they just haven't done enough of it yet.
Stocks had an amazing day in the US. The commentators were just a-chortlin' and burblin' this morning when the Dow reached an early high at 16,313, up 441 points (2.8%). Whoops -- somebody greased the pole, and the Dow slid and slid and slid till it finally came to rest at 15,666.44, down 204.9 (1.29%). Looked at from another direction, it fell from 16,313 and so lost 646.20 or 4% for the day. S&P500 ended 25.59 lower (-1.35%).
I hate sounding like Chatty Cathy saying the same thing over and over, but folks, this has at least another 4 weeks and maybe longer to run. Even now the Dow is working on wiping out two years' gains. For the year the Dow has lost 12.1%, the S&P500 9.3%. From the May highs the Dow has tumbled 14.4%, the S&P500 12.4%.
A 20% loss from the highs would take the Dow to 14,650, the S&P500 to 1,705. Right, it sounds crazy now, just like $1,070.00 gold sounded crazy in August 2011, but not in August 2015. Hang around: crazy gets saner over time.
I'm only going to say this one more time, to make sure y'all have heard it and listened, so clean out them ears and pay attention: the Dow in Gold and Dow in Silver have given unequivocal, unmistakable, unshakable signals that the trend of stocks against silver and gold has turned. For the next several years, silver and gold will GAIN VALUE against stocks. Write this on the backs of your eyelids: before this bear market in stocks ends the Dow will trade for one to two ounces of gold, or for 16-32 ounces of silver.
Today the Dow in Gold ended at G$284.03 (13.74 troy ounces), down 16.7% from its July high. Dow in Silver closed at S$1,381.69 silver dollars (1,068.65 troy ounces), 13.6% lower than the high. Everybody wants to make life complicated and pretend to be an expert when only a very few things are important, and only a few bulbs give light. But Mercy! Don't pay no 'tenshun to me -- I'm jes' a nat'ral born durn fool from Tennessee, and I been wrong for years.
US dollar index gained 75 basis points today and ended at 94.11. This +0.81% move was enough to bring it back up to the 200 DMA (94.66) for a touch, but not enough to close above it. Looks plumb broke down to me, but needs to close below the May low (93.15) to plumb prove it. I reckon it will.
Now y'all know that all markets are manipulated nowadays, and none more than currencies, right? I haven't said anything about the Nice Government Men because I hate to keep beating that obviously defunct equine, but y'all know they were up bright and early today, jus' a-buying them S&P500 index futures with all their little hearts (and they are little, practically non-existent). But while governments and central banks manipulate markets, they do not control them. Hence every now and then markets get out of hand, as in China and the US. And if the dollar keeps accelerating its course to the earth's core, sooner or later the Fed will step in to slow the fall. Likewise, when the Fed gets scared enough -- and it don't take much to scare 'em -- they will commence Quantitative Easing 4. Y'all hide and watch.
Aurum et argentum comparenda sunt -- -- Gold and silver must be bought.
- Franklin Sanders, The Moneychanger
© 2015, The Moneychanger. May not be republished in any form, including electronically, without our express permission. 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 is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.
WARNING AND DISCLAIMER. 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 one 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.
One final warning: NEVER insert a 747 Jumbo Jet up your nose.