The Moneychanger
Weekly Commentary
Friday, 17 June a.d. 2016 Browse the commentary archive
Here's the weekly scorecard:
  10-Jun-16 17-Jun-16 Change % Change
Silver, cents/oz. 1,731.50 1,740.00 8.50 0.5
Gold, dollars/oz. 1,273.40 1,292.50 19.10 1.5
Gold/silver ratio 73.543 74.282 0.738 1.0
Silver/gold ratio 0.0136 0.0135 -0.0001 -1.0
Dow in Gold Dollars (DIG$) 290.02 282.69 -7.33 -2.5
Dow in gold ounces 14.03 13.68 -0.35 -2.5
Dow in Silver ounces 1,031.78 1,015.81 -15.97 -1.5
Dow Industrials 17,865.34 17,675.16 -190.18 -1.1
S&P500 2,096.07 2,071.22 -24.85 -1.2
US dollar index 94.64 94.17 -0.47 -0.5
Platinum 993.80 965.70 -28.10 -2.8
Palladium 547.15 532.65 -14.50 -2.7

Oh, for heaven's sake! Here's the truth. I work by myself, no waiting secretary, & I run like a scalded dog. That means things don't get checked and double checked. So yesterday I sent y'all the wrong link for the Gold Summit. No point in post mortems, I simply erred. So here is the announcement again, with the link corrected. Please forgive my error..

Y'all can follow this link to the Gold Summit, I tried it and double tried it. It's right.

The Gold Summit offers 20 different interviews with 19 different people, and one nat'ral born durn Tennessee fool among 'em. If you are interested in gold and silver investing, better take a look. You can watch them for free June 16 through June 18, or you can buy and download podcasts. Just so y'all know, if you do buy anything, I receive a small commission.

Yesterday markets -- dollar, stocks, gold, silver -- reversed with crazy days, large ranges, and small gains or losses at the closes. Today they reversed the reversals. All this reflects spooked markets fearful what sort of egg the Brexit vote might lay. Brexit vote happens on 23 June, next Thursday, so we'll probably be treated to more of this turmoil next week.

My cryptic remark yesterday -- "Is it real or Memorex?" -- was meant to encourage you to DOUBT. And to question of every event, WHO BENEFITS? When you read headlines about mass shootings or assassinations, you ought to doubt and ask whether it really happened, whether it happened as the media describes, and whether it might be staged for some political purpose to benefit someone or some cause. If you still believe "our" government or others don't do such things, well, you're probably reading the wrong fellow and ought to subscribe to Time & vote for a Republican or Democrat.

US dollar index fell 44 basis points (0.44%) today to 94.17. The three day chart makes yesterday look like a freak spike, which gave back the entire gain & resumed the previous trajectory of fall. Another question highlights why this is important: With Brexit looming, why isn't scared money fleeing into the US Dollar? If it's not, what does that say about the "strength" of the dollar? Of course, I leave open the likelihood that central banking criminals are colluding to keep the euro from collapsing & the dollar from soaring.

Stocks reversed yesterday's reversal. Dow fell 57.94 (0.33%) to 17,675.16. S&P500 slid 6.77 (0.33%). Bottom line of both days is that stocks couldn't hold on above their 20 & 50 day moving averages, and haven't for five days. Momentum is firmly down, & no up & down jiggering for a day or two will change that.

Gold backed off $3.60 (0.3%) to $1,292.50 while silver got serious about dropping, down 19.4¢ (1.1%) to 1740¢.

What's happened in gold can't really be shoehorned into a Key Reversal pattern. It always looks sorry when a market breaks to new highs, then closes lower for the day. But a Key reversal needs at least two days reversal, and preferably three. Here gold dropped yesterday as low at $1,278, but came back and today is trading above $1,290 again. It has conquered that first resistance at $1,287.

I keep noticing, out of the corner of my mind, that gold & silver keep surprising everyone to the upside. Surprising even me. This typifies markets at the beginning of a bull run. I am beginning to harden in my opinion that the $1,201.50 low was the bottom of Wave 2, and that gold is now in a frantic Wave 3. Sure, I know I might be wrong, and that will be plain if gold drops below $1,272 or even $1,250. But for now my operating theory is that we will never again see prices below $1,201.50. Here's the gold chart,

Blast this Brexit vote! It throws everything out of focus. Gold's high surge yesterday probably marked the beginning of a correction, UNLESS gold can close higher than $1,308 next week. If you see that, ALL BETS ARE OFF & gold will rocket higher. But y'all haven't yet seen that. Must see it first.

Silver's five day chart gives an even stronger impression of a market that has peaked and is beginning to correct. Silver would gainsay that by climbing smartly through 1750¢. Fiddling around below 1750¢ is weakness.

Gold/Silver ratio jumped up yesterday as if stuck by a hatpin, but plunged today right back below the 20 & 50 DMAs. Forming a rising wedge, which forecasts another fall. Chart's right here,

On 17 June 1835 27 year old soldier Jefferson Davis married 21 year old Sara Knox Taylor, daughter of his commanding officer, Zachary Taylor, later president of the US. Taylor refused his permission because Davis was a soldier, so Davis resigned his commission and against his commander's wishes married Sara in Louisville.

The couple moved south, where Davis' elder Brother Joseph had an 1800 acre plantation on the Mississippi near Vicksburg. His brother gave them use of Brierfield plantation next door. Both Jefferson and Sara contracted malaria or yellow fever. After only three months of marriage, Sarah died in September, 1835. Davis himself nearly died. He became a recluse for several years after Sarah's death, but eventually re-married Varina Banks Howell in 1845. She was 18.

Y'all enjoy your weekend.

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
17-Jun-16 Price Change % Change
Gold, $/oz 1,292.50 -3.60 -0.3
Silver, $/oz 17.40 -0.19 -1.1
Gold/Silver Ratio 74.282 -0.199 -0.3
Silver/Gold Ratio 0.0135 -0.0001 -1.1
Platinum 65.70 -12.20 -15.7
Palladium 532.65 -3.20 -0.6
S&P 500 2,071.22 -6.77 -0.3
Dow 17,675.16 -57.94 -0.3
Dow in GOLD $s 282.69 -0.11 -0.0
Dow in GOLD oz 13.68 -0.01 -0.0
Dow in SILVER oz 1,015.81 7.91 0.8
US Dollar Index 94.17 -0.42 -0.4
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: 1,300.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,332.60 1,343.65 1,343.65
1/2 AE 0.50 662.54 685.80 1,371.61
1/4 AE 0.25 334.52 349.40 1,397.61
1/10 AE 0.10 136.41 142.36 1,423.61
Aust. 100 corona 0.98 1,267.99 1,276.99 1,302.78
British sovereign 0.24 308.34 321.34 1,365.08
French 20 franc 0.19 244.55 248.55 1,331.28
Krugerrand 1.00 1,310.50 1,320.50 1,320.50
Maple Leaf 1.00 1,310.10 1,324.10 1,324.10
1/2 Maple Leaf 0.50 747.56 682.55 1,365.11
1/4 Maple Leaf 0.25 331.53 347.78 1,391.11
1/10 Maple Leaf 0.10 137.81 141.71 1,417.11
Mexican 50 peso 1.21 1,558.00 1,569.00 1,301.32
.9999 bar 1.00 1,304.65 1,312.10 1,312.10
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 12,684.10 12,969.10 18.14
US 40% silver 1/2s 0.30 5,026.80 5,188.80 17.59
100 oz .999 bar 100.00 1,769.00 1,794.00 17.94
10 oz .999 bar 10.00 175.90 180.90 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: 65.70      
Platinum Platypus 1.00 80.70 110.70 110.70
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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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