The Moneychanger
Daily Commentary
Thursday, 19 May a.d. 2016 Browse the commentary archive

It's only 1:45 central time, but I have ot leave the office for a couple of days rest. First, an announcement, and thank you for your prayers yesterday. At about 5:30 p.m. yesterday was born Arthur Myles Sanders, first child of Zachariah and Victoria Sanders, safe and sound. For Susan and me, Arthur is the fifteenth grandchild and fourteenth grandson. He's an absolutely beautiful baby, and mighty pink. Thank God.

The correction I've been expecting in silver & gold came to roost yesterday. The FOMC's announcement, with its garlic breath hint of raising interest rates, sent the dollar up & stocks, gold, silver, & commodities down. Before y'all panic, remember that IN GENERAL the dollar is on one end of a seesaw and metals and commodities on the other end. Dollar up, commodities down, and vice versa. Thus this should have surprised no one.

By the way, note that the Fed will NOT be raising interest rates anytime soon. They tried that in December and crashed durn near every stock market in this sublunary globe. A mere whiff of lower rates Wednesday sent stocks tumbling again, and as I write this the Dow is down 113.1 (0.65%) and the S&P500 down 11.72 (0.57%).

And oil and the other inflation markets were all set up for a fall in any event. The plunge awaited only a catalyst, and a higher dollar kindly & generously supplied that.

Our only interest in all this, other than as spectators at the destruction of the world's economy to benefit banks, central banks, and globalists, is how far silver & gold might fall, and how great an opportunity to buy that will bring us.

Lo, I can only guess, but am willing. Here's a dolled-up gold chart, http://schrts.co/uqgeGc

Since mid-February gold has traded in an uptrending range. Bottom boundary thereof today lies about $1,240, not far below the often-supportive 50 DMA (1,251.86). A shallow correction would stop there.

A more serious correction would sink to support between $1,190 and $1,208. A bruising & bloodying correction would reach the 200 day moving average at $1,158.50.

My guess is that the fall will be enough to sift out the thick crowd of speculators, but not enough by far to wound gold seriously -- say, $1,190 to $1,208. Gold should reach this low fairly fast (assuming it breaks $1,240 - $1,245), maybe next week.

Now look at silver, http://schrts.co/t9IUae

The height of that triangle implies silver will fall at least to 1600ยข. However, given silver's greater volatility, it could fall all the way to the 200 DMA at 1515. I expect something more like 1575 will catch it.

Y'all must remember to buy when there's blood in the streets. You'll find your heart in your throat, but ignore it.

Please remember the prices I am showing here today are closes for gold, silver, platinum, & palladium, but not for stocks or the US dollar index. See y'all Monday, God willing.

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
19-May-16 Price Change % Change
Gold, $/oz 1,254.20 -19.50 -1.53%
Silver, $/oz 16.48 -0.64 -3.74%
Gold/Silver Ratio 76.109 1.711 2.30%
Silver/Gold Ratio 0.0131 -0.0003 -2.25%
Platinum 1,012.50 -11.70 -1.14%
Palladium 558.25 -5.00 -0.89%
S&P 500 2,034.86 -12.77 -0.62%
Dow 17,411.37 -115.25 -0.66%
Dow in GOLD $s 286.98 2.52 0.89%
Dow in GOLD oz 13.88 0.12 0.89%
Dow in SILVER oz 1,056.58 32.83 3.21%
US Dollar Index 95.29 0.10 0.11%
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: 1,255.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,289.40 1,297.56 1,297.56
1/2 AE 0.50 639.80 662.28 1,324.55
1/4 AE 0.25 323.03 337.42 1,349.66
1/10 AE 0.10 131.72 137.48 1,374.77
Aust. 100 corona 0.98 1,224.49 1,233.49 1,258.40
British sovereign 0.24 297.76 310.76 1,320.14
French 20 franc 0.19 236.16 240.16 1,286.34
Krugerrand 1.00 1,266.80 1,276.80 1,276.80
Maple Leaf 1.00 1,265.50 1,279.50 1,279.50
1/2 Maple Leaf 0.50 721.91 659.14 1,318.28
1/4 Maple Leaf 0.25 320.15 335.85 1,343.39
1/10 Maple Leaf 0.10 133.08 136.85 1,368.50
Mexican 50 peso 1.21 1,503.04 1,514.04 1,255.73
.9999 bar 1.00 1,259.89 1,267.50 1,267.50
SPOT SILVER: 16.52      
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 12,344.48 12,884.48 18.02
US 40% silver 1/2s 0.30 4,753.93 4,915.93 16.66
100 oz .999 bar 100.00 1,676.50 1,701.50 17.02
10 oz .999 bar 10.00 166.65 171.65 17.17
1 oz .999 round 1.00 16.62 17.08 17.08
Am Eagle, 200 oz Min 1.00 18.02 19.27 19.27
SPOT PLATINUM: 1,012.50      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,027.50 1,057.50 1,057.50
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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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