The Moneychanger
Daily Commentary
Tuesday, 3 May a.d. 2016 Browse the commentary archive

Today the US dollar index pulled back from the brink, but not much. It slurped up 31 basis points (0.34%) to close at 92.93. About the best thing you can say about that is, "Well, it didn't tumble into the abyss, yet."

No, I can say better. Today it dropped into new low territory , hitting 91.88, BUT recovered and closed higher than yesterday. Yea, 'tis the first day of a two-day Key Reversal, requiring for validation a higher close again tomorrow -- really the next day as well.

That low came in overnight trading at 4:00 a.m. eastern time, and the dollar climbed at 45 degrees the rest of the day. Now I am suspicious & even bite nickels to make sure they are genuine, but I wouldn't be a bit surprised if the ever vigilant Nice Government Men didn't jump in there & give the dollar a frantically necessary push up. I sure would have if I were them, or Janet Yellen, but that presupposes that they all have as much gray matter as a nat'ral born durned fool from Tennessee, which is leaning on believability a bit too hard.

The brave and decrepit euro fell 0.29% to $1.1499 and the Yen fell 0.18% to 93.79.

Yep, yep, Dow gained 118 yesterday and lost 140.25 (0.78%) today for a 17,750.91 close. S&P500 slid 18.06 (0.87%) to 2,063.37. I despise repeating myself, but here I am doing it over again: Stocks are broken. Not coming back. Will sink from here. Like a worn out old actor, they will soon carry a sign that says, "Will work for beer."

Oil (WTIC) has painted itself into a rising wedge. Yes, it broke up through the downtrend, and even came back & kissed it goo- bye, but hasn't quite managed to achieve escape velocity. Above the 200 DMA and the 20 DMA, but without closing above $46.78 (last high), the next move will be determined by gravity, not Bernoulli's principle. Y'all see for yourselves,

Gold backed off $4.00 (0.31%) to $1,290.70 but silver tumbled 18.2¢ (3.1%) to 1747.4¢.

What did y'all expect, now really? Did y'all think gold would just rise & keep on rising, slicing through all resistance like a new Cutco knife through hot lard? No, weighty resistance like the $1,308 level, 2015's high, may take two or even three tries to bust through. Worse than that that scurvy US dollar is trashing up the picture, weaving back and forth over the lip of hell.

Makes no difference. I will not even be downcast if gold drops back to $1,250, BECAUSE THAT ADVANCE THROUGH $1,308 IS COMING. Late or soon, it's coming. More than that, silver has plumb outdone itself & the moon to boot, shooting up since April. Add to that the December bottoms & faltering stocks & a Fed that don't know sic 'em from come here about what to do next -- folks, it is a sure-fire recipe for higher silver & gold. Trust your government, trust your central bank. Central banks are the very best friends precious metals have in the whole round world.

Sometimes I could wring my son Justin's neck. He was supposed to pick up pigs from my house and bring them up to the farm to farrow. Called me while I was writing this and said, "You have to come look at this pig. There's something wrong with her."

My mind's not on that. I'm preoccupied with Bridget's disappearance. She's our pit bull/Husky mix we've had 7 or 8 years. Catherine Fitts brought her over here as a puppy because they kill pit bulls in the county she lives in. That dog chewed everything thing in our yard. Ate flower pots. Metal ones. Jaws like Godzilla. But by and by she calmed down and I got to liking her. And she was smart: figured out how to open our drop-latch front door, & just let herself in whenever she wanted. Came in every evening to sleep under the stairs. Snored outrageously.

Friday the electric fence collar we use went kaput, and last I saw of Bridget was her running out through the woods. We've looked everywhere for her, & I've just given up trying. I was sure she was dead. Susan really set some store by that dog. I am not that sentimental, but Susan was considering setting me up on suicide watch after Bridget disappeared.

So I drove over to the barn to see what was wrong with that pig, and there in the truck my son was backing the trailer with flashed a white tail tip: Bridget! She had taken up with somebody on Suck Stem Branch, and showed ne'er a trace of shame. If I hadn't been so glad to see her I'd have taken a peach tree limb to her.

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
3-May-16 Price Change % Change
Gold, $/oz 1,290.70 -4.00 -0.31%
Silver, $/oz 17.47 -0.18 -1.03%
Gold/Silver Ratio 73.864 0.535 0.73%
Silver/Gold Ratio 0.0135 -0.0001 -0.72%
Platinum 1,070.10 -14.80 -1.36%
Palladium 609.10 -15.90 -2.54%
S&P 500 2,063.37 -18.06 -0.87%
Dow 17,750.91 -140.25 -0.78%
Dow in GOLD $s 284.30 -1.36 -0.48%
Dow in GOLD oz 13.75 -0.07 -0.48%
Dow in SILVER oz 1,015.85 2.53 0.25%
US Dollar Index 92.93 0.31 0.33%
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: 1,287.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,324.43 1,330.22 1,330.22
1/2 AE 0.50 655.91 678.95 1,357.89
1/4 AE 0.25 331.17 345.91 1,383.63
1/10 AE 0.10 135.04 140.94 1,409.37
Aust. 100 corona 0.98 1,255.31 1,264.31 1,289.85
British sovereign 0.24 305.26 318.26 1,351.98
French 20 franc 0.19 242.10 246.10 1,318.18
Krugerrand 1.00 1,298.68 1,308.68 1,308.68
Maple Leaf 1.00 1,297.10 1,311.10 1,311.10
1/2 Maple Leaf 0.50 740.08 675.73 1,351.46
1/4 Maple Leaf 0.25 328.21 344.30 1,377.20
1/10 Maple Leaf 0.10 136.43 140.29 1,402.94
Mexican 50 peso 1.21 1,540.87 1,551.87 1,287.11
.9999 bar 1.00 1,291.60 1,299.10 1,299.10
SPOT SILVER: 17.44      
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 12,966.53 13,252.53 18.54
US 40% silver 1/2s 0.30 5,025.33 5,187.33 17.58
100 oz .999 bar 100.00 1,768.50 1,793.50 17.94
10 oz .999 bar 10.00 175.85 180.85 18.09
1 oz .999 round 1.00 17.54 18.00 18.00
Am Eagle, 200 oz Min 1.00 18.94 20.19 20.19
SPOT PLATINUM: 1,070.10      
Plat. Platypus 1.00 1,085.10 1,115.10 1,115.10
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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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