The Moneychanger
Daily Commentary
Thursday, 12 May a.d. 2016 Browse the commentary archive

Whether the market is stocks or gold or goats, it's never a good sign when the market advances sharply one day, then gives it all back the next. As stocks yesterday, so gold and silver today.

Gold backed off $4.30 (0.34%) to close Comex at $1,270.30. Silver backslid 21.5¢ (1.24%) to 1708.7¢.

To remain trending upward, gold needs to hold on around here, because it is above the 20 DMA ($1,263). Today leaves me anticipating another drop from Gold. Presently the lower range boundary is roughly $1,250, & it could easily slip to that.

Silver lost virtually all of yesterday's gains, and lodged at this 1700¢-ish level we've seen so often. If silver breaks 1690¢ (really 1700¢), the blood will attack packs of sharks, and could drive it down to 1640¢.

Don't throw your beer mugs at my head. I'm not running the train, I'm just a messenger boy trying to figure out the schedule.

Did you ever look in the mirror in the head on that deep sea fishing boat everybody though it would be such fun to take, and see a very green-skinned person looking back at you? That's how puking sick stocks look.

Dow managed to end 9.38 (0.05%) higher at 17,720.50, but only after spending much of the day underwater. Other indices all closed lower, like the S&P500, which dropped 0.35 (0.2%) to 2,064.11. No, no, those aren't BIG drops, but they have that hovering quality of a baseball at the top of its thrown arc, one micro-moment before turning down.

US dollar index bounced back today, regaining 33 basis points (0.35%) of the 48 it lost yesterday and ending at 94.12. Look, http://schrts.co/OkJ5UT

This answereth no questions, solveth no riddles, disposeth no controversy. Dollar index has merely climbed to the top boundary of its falling downtrend. Yes, it's also above its 20 DMA (94.02). Without a close above 94.33 (last high), dollar index is merely wheel-spinning.

My stock dividends are starting to be paid. First of five Hereford sows yesterday had 11 pigs, of which nine survived. Not a huge litter, but low average. They will not grow average, though, as she has enough milk to feed fifteen.

Have to drive over to Chattanooga tonight to have my foot checked after surgery last Friday. Still not hurting, thank God. I will try to get back in time to send y'all a commentary tomorrow.

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-May-16 Price Change % Change
Gold, $/oz 1,270.30 -4.30 -0.34%
Silver, $/oz 17.09 -0.22 -1.24%
Gold/Silver Ratio 74.343 0.675 0.92%
Silver/Gold Ratio 0.0135 -0.0001 -0.91%
Platinum 1,052.50 -11.90 -1.12%
Palladium 596.90 -11.40 -1.87%
S&P 500 1,064.11 -0.35 -0.03%
Dow 17,720.50 9.38 0.05%
Dow in GOLD $s 288.37 1.12 0.39%
Dow in GOLD oz 13.95 0.05 0.39%
Dow in SILVER oz 1,037.07 13.43 1.31%
US Dollar Index 94.12 0.33 0.35%
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: 1,267.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,302.03 1,310.27 1,310.27
1/2 AE 0.50 646.07 668.76 1,337.53
1/4 AE 0.25 326.20 340.72 1,362.89
1/10 AE 0.10 133.01 138.82 1,388.24
Aust. 100 corona 0.98 1,236.48 1,245.48 1,270.64
British sovereign 0.24 300.68 313.68 1,332.53
French 20 franc 0.19 238.47 242.47 1,298.73
Krugerrand 1.00 1,279.21 1,289.21 1,289.21
Maple Leaf 1.00 1,277.80 1,291.80 1,291.80
1/2 Maple Leaf 0.50 728.99 665.60 1,331.19
1/4 Maple Leaf 0.25 323.29 339.14 1,356.55
1/10 Maple Leaf 0.10 134.39 138.19 1,381.90
Mexican 50 peso 1.21 1,517.76 1,528.76 1,267.94
.9999 bar 1.00 1,272.24 1,279.80 1,279.80
SPOT SILVER: 17.08      
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 12,748.45 13,288.45 18.59
US 40% silver 1/2s 0.30 4,920.60 5,082.60 17.23
100 oz .999 bar 100.00 1,733.00 1,758.00 17.58
10 oz .999 bar 10.00 172.30 177.30 17.73
1 oz .999 round 1.00 17.18 17.64 17.64
Am Eagle, 200 oz Min 1.00 18.58 19.83 19.83
SPOT PLATINUM: 1,052.50      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,067.50 1,097.50 1,097.50
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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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