The Moneychanger
Daily Commentary
Wednesday, 20 April a.d. 2016 Browse the commentary archive

I'd better make this quick today, because I can feel the bile a-risin'. I should never have read the news.

Stocks continued to levitate mysteriously & without the slightest ground in reality. Dow added 42.67 (0.24%) to 18,096.27. S&P500 nanometered up 0.16 (0.08%) to close at 2,102.40. (A nanometer is a measurement equal to one billionth of a meter, used primarily to measure the brains of central bankers & presidential candidates.)

Both indices have formed a second rising wedge, which, as I'm sure y'all are tired of hearing, usually resolve earthwards. Not long, not long, and 'twill dive.

I am so suspicious I am ashamed of myself. Imagine, being so childishly leery as to suspect that somehow the Democratic administration might be leaning on the Fed to support, or the supinely truckling, groveling, bootlicking Fed might of its own motion support, the stock market. Or worse yet, so suspicious as to suspect that a Democratic "Justice" Department notorious for prosecuting even jaywalkers and their dogs somehow can't get around to Hillary. I hang my head in shame. How could I doubt democracy?

US dollar index finally turned back from the jaws of death & rose today, 52 basis points (0.56%) to 94.47. This pulls the dollar index back from the brink, but it still must rise through the 20 day moving average blocking its road at 94.74.

Dollar index doubled bottomed yesterday and today about 93.95. Remember that number, because trading lower will suck the dollar index down into the Maelstrom. Safe for now.

Silver today fought its way through the blockade at 1700¢ to close Comex 16.3¢ higher at 1713.1¢. Today's 1725¢ high bettered yesterday's 1711¢. In blistering trading gold closed Comex at $1,253.20, twenty cents higher than yesterday.

Ratio fell 1% to 73.154. We need to bear in mind that yesterday's ratio low at 72.49 may have fulfilled the target for this first leg down. That in turn implies silver might head down.

Yet silver, for all gold's lagging, won't slow down. Probably has 1750¢ - 1765¢ in it, which would take it to the May 2015 high. But the breather that silver pauses for there or here won't end the upmove by any means. Something north of 1800¢ is in silver's sights.

Gold behaved badly today. Barely increased its intraday high to 1,259.80. Ended the day up only twenty cents, then tanked in the aftermarket ten bucks to $1,244.10. Still, as long as it doesn't crash through this level it won't tank.

Sellers have drawn their line in the sand at $1,260, hence gold must burst through that barrier. Needs to work up substantially more gumption to do that.

Appears there's a leetle more rally left in silver, and gold will tag along.

A reader wrote, "You are quite frequently saying to buy now. I am curious. When, if ever, have you said to sell?"

Answer: NEVER, because that time hasn't come yet. It will come when the gold/silver ratio reaches 16:1 or lower. Then it will be time to sell. Till then, y'all ought to shake off the spell of government, central bank, and Wall Street liars and listen to history's witness: NEVER ONCE has an episode of fiat money inflation ended without destroying the currency UNIT. I am buying silver & gold for the LONG term, at least another five years.

I am looking out my window at our sheep flock. They've had 30 lambs so far, and 20 have been ewe lambs. We borrowed a black-headed Dorper ram for our white Katadhin ewes, and the progeny are startling: all black, piebald black and white, black bellies, you name it. Mercy! I could watch 'em for hours. That's the kind of stock I like.

A reader heard two men on an internet radio show say, "Few people even want 100 oz silver bars." My unqualified response to that is, "They don't know what they are talking about." Since May 1980 I have bought and sold THOUSANDS of 100 oz. silver bars with no trouble. They have their place & use, just like silver rounds & 90% coin. This categorical MISstatement often comes from dealers who tell you not to buy anything but silver American Eagles, because that's the easiest thing for them & suits their inventory, never mind the customer gets 10% less silver. HOGWASH. Over time, premium always disappears.

Every once in a while appears an insightful & concise article that makes me think, "That's exactly what I want my readers to see." Here's one by Jack Perry, "The End is Not Near, It has Begun." Sound analysis of a possible future. Go to https://www.lewrockwell.com/2016/04/jack-perry/end-not-near/

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
20-Apr-16 Price Change % Change
Gold, $/oz 1,253.20 0.20 0.02%
Silver, $/oz 17.13 0.16 0.96%
Gold/Silver Ratio 73.154 -0.691 -0.94%
Silver/Gold Ratio 0.0137 0.0001 0.94%
Platinum 1,026.70 12.70 1.25%
Palladium 598.00 14.80 2.54%
S&P 500 2,102.40 1.60 0.08%
Dow 18,096.27 42.67 0.24%
Dow in GOLD $s 298.50 0.66 0.22%
Dow in GOLD oz 14.44 0.03 0.22%
Dow in SILVER oz 1,056.35 -7.63 -0.72%
US Dollar Index 94.47 0.52 0.55%
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: 1,244.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,277.69 1,285.78 1,285.78
1/2 AE 0.50 633.98 656.26 1,312.53
1/4 AE 0.25 320.10 334.35 1,337.41
1/10 AE 0.10 130.53 136.23 1,362.29
Aust. 100 corona 0.98 1,213.37 1,222.37 1,247.06
British sovereign 0.24 295.06 308.06 1,308.66
French 20 franc 0.19 234.02 238.02 1,274.86
Krugerrand 1.00 1,254.05 1,264.05 1,264.05
Maple Leaf 1.00 1,254.10 1,268.10 1,268.10
1/2 Maple Leaf 0.50 715.36 653.15 1,306.31
1/4 Maple Leaf 0.25 317.25 332.80 1,331.19
1/10 Maple Leaf 0.10 131.87 135.61 1,356.07
Mexican 50 peso 1.21 1,489.39 1,500.39 1,244.41
.9999 bar 1.00 1,248.45 1,256.10 1,256.10
SPOT SILVER: 16.98      
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 12,744.88 13,064.88 18.27
US 40% silver 1/2s 0.30 4,889.63 5,051.63 17.12
100 oz .999 bar 100.00 1,722.50 1,747.50 17.48
10 oz .999 bar 10.00 171.25 176.25 17.63
1 oz .999 round 1.00 17.08 17.54 17.54
Am Eagle, 200 oz Min 1.00 18.48 19.73 19.73
SPOT PLATINUM: 1,026.70      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,041.70 1,071.70 1,071.70
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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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