The Moneychanger
Daily Commentary
Tuesday, 12 April a.d. 2016 Browse the commentary archive

Silver did it! Silver closed above 1617¢, at 1622¢, up 24.6¢ (3.8%). Gold only rose $2.70 (1.14%) to $1,259.40, but it rose all the same.

US dollar index has clung so tenaciously to its weakness that suspicious folks, like some nat'ral born durned fools in Tennessee, begin to suspect it's a-happenin' on purpose, that the Nice Government Men are doing it.

Today the dollar index climbed an inconsequential 4 basis points (0.05%) to 93.99. 'Tain't no recovery -- just rallied to the downtrend line.

Wicked Witch of the East Janet Yellen & Barnard O'Bama must be sweating hotdum-dums watching the stock market crumple in an election year. What better way to levitate it than allowing the US dollar to sink?

Y'all understand that, viewed from one angle, price rises when the dollar sinks reflect nothing more than re-pricing at the dollar's newly lower value. Thus, Other Things Being Equal (they ain't never, but listen a minute), if the dollar falls stocks, oil, silver, & gold should rise. The greater question, and the one that requires X-ray vision into circumstances, is whether those markets are gaining MORE than the dollar is losing. Right now, silver & gold ARE.

Appearance for now is that commodities -- not including gold & silver, which are a different class -- after 8 years falling may have put in that bottom we've been expecting in 2016's first half. WTIC troughed on 1 April. Look at the chart,

WTIC began a colossal decline last July from $62.58/bbl to $26.05 in February 2016, a 58% loss. But the chart shows it broke out over that intermediate downtrend line in March, rallied to 42.49 and the 200 day moving average, backed off to the downtrend line again for the final kiss goodbye, and since 1 April has rocketed In the last two days it gapped up and punched through the 200 DMA like Alexander the Great punching through the Persians at Gaugamela. Hard not to see a turnaround and breakout there. Copper has behaved differently, but also has established an uptrend since January. Ditto for the CRM Commodity index.

Is that dollar weakness or inflation market strength? Are the inflation markets reading their crystal ball? Sure looks that way.

Even stocks rose today. Dow added 164.84 (0.94%) to 17,721.25 & the S&P500 rose 19.73 (1.04%) to 2,061.72. Remains in the downtrend ruling since the 1 April highs, lower highs and lower lows. Doubtful today altered that.

Yen tripped and fell 0.58% today, closing at 92.1. Leaves behind what may be an island reversal. Gap down tomorrow would clinch it.

Euro fell 0.22% to $1.1385. Euro doesn't need any encouragement to stumble.

What hath happened since 6 April 2016? In those six days gold gained 3%, the Gold/Silver ratio fell 4.4%, and silver has added 7.8%. Gold/Silver ratio fell another 1.3% today.

What hath silver wrought? It hath closed through that 1600+ barrier, above the last high. Behold, the beautiful chart,

Backing up in time, the high before this last one was in May 2015 at 17.775¢, so that becomes our Must Exceed target Can silver do it? Counting what I believe I see on the chart, silver could reach 1875¢.

Wait, wait. Silver MUST improve today's close tomorrow. Now that it's got the skeer on, it has to keep the skeer on. No excuses will wash.

Bear ye in mind that when silver crosses 1650¢ it will cross the downtrend line from the April 2011 high. At that point it will attract buyers like picnics attract fire ants.

Gold chart lives here,

While silver takes the lead, it's enough that gold merely keeps advancing. Next hurdle lies at $1,272. Gold is being held down by disbelief right now, but when it pops through $1,272 or $1,288 the disbelief will vanish like morning mist in the July sun, all shorts will run for cover, and gold will be racing with the pedal to the metal.

On 12 April a number of years ago but well after World War II ended, was born to Lee & Amelia Askew a baby girl they named Susan, in Tampa, Florida. After 9 months' waiting, we think of a baby as an end, but it is only a beginning, a new link in a chain of love, husbands and wives and babies stretching endlessly through time. Glory.

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
12-Apr-16 Price Change % Change
Gold, $/oz 1,259.40 14.20 1.14%
Silver, $/oz 16.22 0.59 3.79%
Gold/Silver Ratio 77.645 -2.033 -2.55%
Silver/Gold Ratio 0.0129 0.0003 2.62%
Platinum 998.50 9.10 0.92%
Palladium 545.55 -1.35 -0.25%
S&P 500 2,061.72 19.73 0.97%
Dow 17,721.25 164.84 0.94%
Dow in GOLD $s 290.88 -0.58 -0.20%
Dow in GOLD oz 14.07 -0.03 -0.20%
Dow in SILVER oz 1,092.56 -30.84 -2.75%
US Dollar Index 93.99 0.04 0.04%
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: 1,255.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,287.30 1,297.97 1,297.97
1/2 AE 0.50 640.00 662.49 1,324.97
1/4 AE 0.25 323.14 337.52 1,350.09
1/10 AE 0.10 131.76 137.52 1,375.21
Aust. 100 corona 0.98 1,224.88 1,233.88 1,258.80
British sovereign 0.24 297.86 310.86 1,320.54
French 20 franc 0.19 236.24 240.24 1,286.74
Krugerrand 1.00 1,264.69 1,274.69 1,274.69
Maple Leaf 1.00 1,265.90 1,279.90 1,279.90
1/2 Maple Leaf 0.50 722.14 659.35 1,318.70
1/4 Maple Leaf 0.25 320.25 335.95 1,343.81
1/10 Maple Leaf 0.10 133.13 136.89 1,368.93
Mexican 50 peso 1.21 1,503.51 1,514.51 1,256.13
.9999 bar 1.00 1,260.30 1,267.90 1,267.90
SPOT SILVER: 16.21      
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 12,269.40 12,629.40 17.66
US 40% silver 1/2s 0.30 4,663.95 4,825.95 16.36
100 oz .999 bar 100.00 1,646.00 1,671.00 16.71
10 oz .999 bar 10.00 163.60 168.60 16.86
1 oz .999 round 1.00 16.31 16.77 16.77
Am Eagle, 200 oz Min 1.00 17.71 18.96 18.96
SPOT PLATINUM: 998.50      
Plat. Platypus 1.00 1,013.50 1,043.50 1,043.50
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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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