The Moneychanger
Weekly Commentary
Friday, 1 July a.d. 2016 Browse the commentary archive
Here's the weekly scorecard:
  24-Jun-16 1-Jul-16 Change % Change
Silver, cents/oz. 1,778.90 1,954.40 175.50 9.9
Gold, dollars/oz. 1,320.00 1,336.70 16.70 1.3
Gold/silver ratio 74.203 68.394 -5.809 -7.8
Silver/gold ratio 0.0135 0.0146 0.0011 8.5
Dow in Gold Dollars (DIG$) 272.50 277.58 5.08 1.9
Dow in gold ounces 13.18 13.43 0.25 1.9
Dow in Silver ounces 978.17 918.41 -59.77 -6.1
Dow Industrials 17,400.75 17,949.37 548.62 3.2
S&P500 2,037.41 2,102.90 65.49 3.2
US dollar index 95.57 95.72 0.15 0.2
Platinum 987.10 1,054.70 67.60 6.8
Palladium 548.80 606.15 57.35 10.5

Gloat. Gloat, gloat, gloat. Gloat. Gloat, gloat.

Whew. I just couldn't hold that in any longer. Sorry. I know I'm not supposed to gloat, but I'm a moneychanger, not a plaster saint.

Week's big gainer was ---- PALLADIUM, up 10.5%. Next came silver, $2.00 higher in the last four days and up 9.9% this week. Gold rose 1.3%, but was marching in place compared to the other metals. Stocks rose 3.2%, but that ain't much to crow about next to silver & gold. US dollar index managed again to spike its own rise.

Here at the end of the first half of 2016, I want to point to some results, compared to 31 Dec 2015.

Dow Industrials, + 2.9%

S&P500, up 2.7%

Nasdaq Comp, - 3.3%

Nasdaq 100, -3.8%

Dow in Gold, -17.2%

Dow in Silver, - 23.7%

Gold, +24.3%

Silver, + 34.9%

Platinum, +14.6%

Palladium, +6.7%

US dollar index, -2.7%

XAU gold stock index, 115.5%

HUI gold stock index, +122.7%

Now I'm jes' a nat'ral born durn fool from Tennessee, & I don't know Sic 'em from Come yere, but it 'pears to me them Wall Street smarties are running a mite behind the pack. But shucks, I know they'll figure out some way to 'splain things that I'm jes' too ignurunt to see.

Stocks today halted their manic rise. Dow gained 19.38 (0.11%) to 17,949.37 as it drew nearer and nearer the Kryptonite laden 18,000 level. S&P500 rose 4.09 (0.19%0 to 2,102.95. Law, law, the run-up these last four days has set the stage for the bloodiest mess y'all have ever seen. Worse than hog killin', when stocks fall over that cliff.

Here's the Dow in Gold, down 17.2% since December 2015 ended, http://schrts.co/8Sv0tc

Y'all know I ain't got a lick ah sense but durned if it don't look like them stocks is jes' a-falling & a-falling against gold. Ended the week at 13.35 oz, having bounced off the downtrend line from the December 2015 high. Hear my words: GREAT slide comin'. Watch for it. And ef y'all have stocks still, y'all might think about selling 'em for gold.

Dow in Silver has even more soundly whupped stocks, down 23.7% so far this year. Go look, http://schrts.co/arS25e

Mark carefully that the Dow in Silver has fallen plumb through the support from the last two lows about 992 oz, and collapsed to 904.02 oz, a new low for the move that began in December.

Don't delude yourselves: this is no flash in the pan. Stocks will continue to lose value against metals for the next 5 years or more, 85% from that December high.

US dollar index lost 48 basis points (0.5%) to end at 95.72. Say what you will, that don't make no sense a'tall. And when thangs don't make no sense, you can look for a Nice Government Man behind the curtain. In a world where the US 10 year T note just hit a 3-1/2 year high, the US dollar shouldn't be unable to make new highs, or at least hold on to gains.

But in a world where criminal central banks, the natural enemies of all decent men, manipulate currency exchange rates for political goals, it makes perfect sense that after Brexit and the euro's Incredible Shrinking Currency act, the Nice Government Men would prop up the euro & slap down the Samolean. Potemkin markets.

Euro rose (wink, wink!) 0.27% to $1.1138. Of all the nasty things I don't want to own in the world next to a glassful of fresh cholera juice, the euro heads the list. Folks, it will blow up. Yen also rose 0.7% to 97.54 & looks to me it's thinking about belly flopping a couple of stories.

I don't know what to say about silver & gold? Haven't I been telling y'all that in a bull market, all the surprises come to the upside? Well, slap my jaws and call me Sally if that didn't happen again this morning. Near first light I turned on my cell phone and looked at the price. I shook that cell phone a couple of times cause I knew that silver price couldn't be right. Somebody made a typo, putting $19 for $18. I shook the durned thing again, but there it was, 1935¢. Looky here at the chart, http://schrts.co/NNTujU

Today on the Comex gold rose $18.30 (1.4%) but silver leapt, nay, pole-vaulted 96.2¢ -- five point two percent -- to 1954.4¢. Lo, not even I, the arch-silverbug of all silverbugs, expected that. In the last four days, silver has risen $2.00. It is trading at its highest price since August 2014.

Things waxed feverish in the Aftermarket. Gold rose $7.00 to $1,343.30 but silver rose 26.1¢ as NOBODYwanted to go home short over a long holiday weekend, the classic time for a government surprise party.

Don't even get me started talking about the gold/silver ratio. That ended the Comex at 68.39, down 7.2% in the last four days. Y'all reckon we hit a good lick with those gold for silver swaps? Ratio is down 18.9% from the March high, & this downmove is only beginning.

'Tain't over yet. If you are waiting for a correction, stop waiting. This move has not ended, and will carry well over $20, perhaps as high as . . . Aww, never mind. Y'all will jes' think I'm crazy.

I'm going to back up an inch. Silver hit the upper channel boundary today. UNLESS it punches clean through that next week, it ought to back off a little. That overbought RSI needs some chastening rest, too. However, this upmove has NOT ended so any correction will be shallow.

Glance at the gold chart here, http://schrts.co/9ks4L3

RSI and MACD give it plenty of room to move higher. Once it punches through today's high, which is about on the overhead channel line, it could run $110. Yeah, I know, crazy.

There are some times that waiting makes sense, but other times when waiting can be fatal. It will be fatal here, because silver and gold are NOT looking back. The markets see something we don't -- yet -- but that's coded all in those rising prices.

On 1 July 1862 the yankee congress passed the Internal Revenue law which imposed federal taxes on inheritance, tobacco, and incomes over $600. That last, by the way, was forbidden by the constitution, but the Constitution never bothered Lincoln much at all.

On 1 July 1863 the first day's fighting at Gettysburg, Pennsylvania began. Lee's bold gambit was to move north into Pennsylvania then wheel east to Washington. A lot went wrong, including the tragic death in May of Stonewall Jackson's, Lee's most trusted and almost clairvoyant commander. The Confederates failed to judge the ground and take the high ground early, when they had a chance. Longstreet never approved of Lee's plan, so he hesitated & delayed until, when he finally moved, he sent his men to certain death. Stewart's move around the yankee army to catch them from behind and split them in two was stymied by yankee cavalry, who for the first time showed some spine and skill. As it was, Lee's Confederates nearly won, and in the end the Union Commanding General George Meade was quite satisfied to leave Lee be if he would just stop charging his lines. Characteristically, Lee took all the blame on himself. In the inscrutable providence of God, Gettysburg marked high tide for the Confederacy.

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
1-Jul-16 Price Change % Change
Gold, $/oz 1,336.70 18.30 1.4
Silver, $/oz 19.54 0.96 5.2
Gold/Silver Ratio 68.394 0.903 1.3
Silver/Gold Ratio 0.0146 0.0007 5.2
Platinum 1,054.70 33.20 3.3
Palladium 606.16 18.00 3.1
S&P 500 2,102.95 4.09 0.2
Dow 17,949.37 19.38 0.1
Dow in GOLD $s 277.58 -3.52 -1.3
Dow in GOLD oz 13.43 -0.17 -1.3
Dow in SILVER oz 918.41 -46.50 -4.8
US Dollar Index 95.72 -0.48 -0.5
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: 1,343.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,378.23 1,388.30 1,388.30
1/2 AE 0.50 684.57 708.59 1,417.18
1/4 AE 0.25 345.64 361.01 1,444.05
1/10 AE 0.10 139.60 147.09 1,470.91
Aust. 100 corona 0.98 1,307.49 1,316.49 1,343.08
British sovereign 0.24 318.58 331.58 1,408.60
French 20 franc 0.19 252.68 256.68 1,374.80
Krugerrand 1.00 1,352.70 1,362.70 1,362.70
Maple Leaf 1.00 1,353.30 1,367.30 1,367.30
1/2 Maple Leaf 0.50 772.40 705.23 1,410.47
1/4 Maple Leaf 0.25 342.54 359.33 1,437.33
1/10 Maple Leaf 0.10 142.39 146.42 1,464.20
Mexican 50 peso 1.21 1,611.39 1,622.39 1,345.60
.9999 bar 1.00 1,348.00 1,355.30 1,355.30
SPOT SILVER: 19.81      
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 14,339.33 14,624.33 20.45
US 40% silver 1/2s 0.30 5,724.48 5,886.48 19.95
100 oz .999 bar 100.00 2,005.50 2,030.50 20.31
10 oz .999 bar 10.00 199.55 204.55 20.46
1 oz .999 round 1.00 19.91 20.37 20.37
Am Eagle, 200 oz Min 1.00 21.56 22.56 22.56
SPOT PLATINUM: 1,054.70      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 1,069.70 1,099.70 1,099.70
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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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