The Moneychanger
Daily Commentary
Thursday, 30 June a.d. 2016 Browse the commentary archive

Cannot cover everything in one day, so some spilleth over from one day to the next. I mean, of course, the performance of platinum & palladium last 2 days.

Yesterday platinum shot up $32.40 (3.3%), and another $10.20 today to close at $1,021.50. Chart's here, Platinum has completed a sloppy head and shoulders bottom that began last July. After a false breakout through the neckline in May, it fell back but today broke out above the neckline and above the 50 DMA. Ready to boogie.

On Wednesday Palladium jumped $19.3 (3.4%) & added another $6.65 (1.1%) today, ending at 598.15. That close carried it above the 20, 50, and 200 day moving averages, and confirms an earlier breakout through the short term downtrend line. Also ready to boogie. Chart,

If you're going to swap gold for platinum, you'd better get about it. The gold-platinum spread is screaming down, from $347.40 on 27 June to $296.30 today, and about to puncture the uptrend line.

Prince Grigory Aleksandrovich Potemkin-Tavreski was a favorite of Catherine the Great, a little too favorite, in fact. When Catherine was about to visit the southern provinces he was governing, he (allegedly) constructed façades of houses & filled the fake streets with actors paid to look like happy villagers. While the official inspection procession slowly made its way to the next spot, the Potemkin village was dismantled and moved with the actors to that next spot, the village re-assembled, and the actors positioned. The region's prosperity & happiness impressed the inspectors & Catherine.

Last three days our modern day Potemkins, the central banks, and the Nice Government Men, have been building their own Potemkin villages in stocks. It wouldn't do for the inspectors at the end of 2 Quarter 2016, the end of the first half, to see stocks at those Brexit rabbit-punched levels. So they spent three days straining themselves to pump those stocks up for respectable end-of-quarter numbers. Like Potemkin's village, 'twill disappear as soon as the inspection has passed.

Actually comparing Potemkin to those criminal central bankers is an insult to a man who, on balance was a great leader.

US dollar index came back today, rising 27 basis points (0.28%0 to 96.07. That took the euro down and killed its phony dead varmint bounce. It lost 0.21% to $1.1096. Yen lost 0.25 to 96.85.

Dow added another 235.31 (1.33%) to end at 17,929.99. Interesting, when you view the 5 day chart, that both Tuesday and Wednesday began with a big jump up, as if some big buyer came in all at once, and that gulled the rest into buying. Never mind. S&P500 added 28.09 (1.36%).

So far all this is no more than a successful transit back up to resistance. A failure here besmirches the chart with a trail of lower highs and lower lows on the chart.

Gold closed down $5.50 (0.4%) at $1,318.40 but silver rose another 21.8¢ (1.2%) to 1858.2¢. Those were the Comex closes.

That don't half tell the story. Silver's high today at 1875 was its highest price since 12 September 2014. In the aftermarket silver kept right on climbing that mountain, clutching handholds in the rocks and traded at 1877.5¢. One website I use quotes another market where the high was 1889¢. Silver has gained 100¢ in the last three days. 150¢ since the 21st.

Silver's strength reflects in the gold/silver ratio, which dropped today 1.6% to 70.950. It has gapped down two days running, and is nearing a new low for the move that began over 84 in March. The ratio has plunged almost 16% since 26 February 2016. Look at the chart for yourself,

It appears silver & gold are NOT going to snooze through the summer, as they usually do.

Silver & gold will move much, much higher. Better buy your ticket now, or you'll miss the train.

30 June 1520 was La Noche Triste, the Night of Sorrows. In it Hernán Cortés and his army of a few Spanish conquistadors and a lot of native allies fought their way out of the Mexican capital at Tenochtitlan (now Mexico City), when the Aztec king, Moctezuma II died. Cortés had 600 to 1,000 Spanish troops and 20,000 native allies. Those allies had joined Cortés because they hated the Aztec empire's yoke, which, among other things, demanded a steady stream of their people for human sacrifice. Between 400 & 800 Spaniards were killed or captured, and 2,000 to 4,000 allies. It was a loss for the Spaniards, but that didn't kill Cortés courage or determination. He fought his way out & returned to lay siege to Tenochtitlan & destroy the Aztec empire.

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
30-Jun-16 Price Change % Change
Gold, $/oz 1,318.40 -5.50 -0.42%
Silver, $/oz 18.58 0.22 1.19%
Gold/Silver Ratio 70.950 -1.142 -1.58%
Silver/Gold Ratio 0.0141 0.0002 1.61%
Platinum 1,021.50 10.20 1.01%
Palladium 598.15 6.65 1.12%
S&P 500 2,098.86 28.09 1.36%
Dow 17,929.99 235.31 1.33%
Dow in GOLD $s 281.13 4.84 1.75%
Dow in GOLD oz 13.60 0.23 1.75%
Dow in SILVER oz 964.91 1.36 0.14%
US Dollar Index 96.07 0.27 0.28%
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: 1,321.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,355.45 1,365.36 1,365.36
1/2 AE 0.50 673.25 696.88 1,393.76
1/4 AE 0.25 339.93 355.05 1,420.18
1/10 AE 0.10 137.29 144.66 1,446.60
Aust. 100 corona 0.98 1,288.47 1,297.47 1,323.68
British sovereign 0.24 313.32 326.32 1,386.23
French 20 franc 0.19 248.50 252.50 1,352.43
Krugerrand 1.00 1,327.71 1,337.71 1,337.71
Maple Leaf 1.00 1,331.10 1,345.10 1,345.10
1/2 Maple Leaf 0.50 759.63 693.58 1,387.16
1/4 Maple Leaf 0.25 336.88 353.39 1,413.58
1/10 Maple Leaf 0.10 140.04 144.00 1,440.00
Mexican 50 peso 1.21 1,584.75 1,595.75 1,323.51
.9999 bar 1.00 1,325.72 1,333.10 1,333.10
SPOT SILVER: 18.78      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 23.00 27.00 35.29
VG+ Peace dollar 0.77 18.00 20.00 26.14
90% silver coin bags 0.72 13,602.88 13,887.88 19.42
US 40% silver 1/2s 0.30 5,420.63 5,582.63 18.92
100 oz .999 bar 100.00 1,902.50 1,927.50 19.28
10 oz .999 bar 10.00 189.25 194.25 19.43
1 oz .999 round 1.00 18.88 19.34 19.34
Am Eagle, 200 oz Min 1.00 20.53 21.53 21.53
SPOT PLATINUM: 1,021.50      
Plat. Platypus 1.00 1,036.50 1,066.50 1,066.50
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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.
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  • 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.
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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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