The Moneychanger
Weekly Commentary
Friday, 22 July a.d. 2016 Browse the commentary archive
Here's the weekly scorecard:
  15-Jul-16 22-Jul-16 Change % Change
Silver, cents/oz. 2,012.50 1,965.70 -46.80 -2.3
Gold, dollars/oz. 1,326.50 1,323.10 -3.40 -0.3
Gold/silver ratio 65.913 67.309 1.396 2.1
Silver/gold ratio 0.0152 0.0149 -0.0003 -2.1
Dow in Gold Dollars (DIG$) 288.56 290.15 1.59 0.6
Dow in gold ounces 13.96 14.04 0.08 0.6
Dow in Silver ounces 920.08 944.74 24.67 2.7
Dow Industrials 18,516.55 18,570.85 54.30 0.3
S&P500 2,161.74 2,175.03 13.29 0.6
US dollar index 96.56 97.46 0.90 0.9
Platinum 1,090.50 1,085.60 -4.90 -0.4
Palladium 647.90 684.45 36.55 5.6

'Twas a laborious, toilsome week for silver & gold. Gold ended the week little damaged, but silver lost 2.3%. Platinum couldn't break higher & ended only a tadge lower while palladium surged 5.6%. Stocks kept eking out gains, but not enthusiastically. US dollar index finally added a bit of fat, but only today.

I won't dwell on it, but y'all had better be paying attention to the banking mess in Europe. The banks are busted, and only because they are banks are they still standing, propped up by government. More: criminal kamikaze-Keynesian central bankers have blown up the greatest bubble in world history in government bonds. Count on it: there will be a default. You don't want to be a creditor in a default. Remember The Moneychanger's Rule For Staying Out of Bar Fights: leave the bar before the fight begins. I don't know when, but soon enough, the bust to end all busts will hit.

And now, a word about Long Spindly Rising Wedges (LSRW. Gaze upon the Dow chart, http://schrts.co/Q6KUW0 and the S&P500 chart, http://schrts.co/vtdPMb

Both charts show LSRWs. The chart depicts a goosed market running out of fuel. Daily ranges become tighter and tighter, volume dwindles, upward momentum ceases, & the market plunges out of the wedge, or trades sideways & THEN plunges out of the wedge.

S&P500 today rose 53.62 (0.29%) to 18,570.85. SI&P500 inched out a new high at 2,175.03, up 9.86 (0.46%) from yesterday. LSRW.

Precious metals' weakness this week in the face of continuing stock strength has raised the Dow in Gold and Dow in Silver. Dow in gold ended today at 14.03 oz, above the 50 day moving average, an argument for the end of the move. Dow in silver closed at 943.21 oz, just above the 20 DMA and a propitious place to turn 'round.

US dollar index displays a rising flat topped triangle with an upside breakout. Chart's at http://schrts.co/OkJ5UT

The breakout targets 98.3, but the dollar continues sluggish. I imagine the rest of the globe harbors abounding reasons to sell wherever their local fiat chips are and buy dollars, given the sorry state of their economies. That applies particularly to Europe and the developing world. Thus it continues to baffle me why the dollar isn't rising faster. Stocks seem to have profited well from the same motive in the last four weeks. Why not the dollar?

If it weren't for the Nice Government Men slowing the avalanche, the euro would have no future at all Look at this chart, http://schrts.co/HcRUv0

Euro broke down Tuesday from an even-sided triangle, languishes below its 200 DMA, and today spent the entire day below the triangle. Has not near-about stopped falling. Couldn't rouse that thing to life with a heavy duty set of jumper cables & a marine battery.

Japanese yen is foot-stepping & tripping over its 50 day moving average, well & truly broken down since the high early this month. Bank of Japan head talking it down as hard as he can, & more Abenomics coming, i.e., lots more yen printing, depreciation, & economic & market interference. A toxic cocktail.

Silver & gold "sort of" gainsaid yesterday's rise by falling back today. Comex gold lost $4.70 (0.6%) to $1,323.10. Silver backed up 12.7¢ (0.6%) to 1965.7¢.

Keep in the back of your mind that today is Friday, & traders like to close out positions before the weekend. Also keep in mind that today's lows in both metals were generously higher than yesterday's (1962¢ against 1927¢ & $1,319.40 against $1,310.70.

Actually, I DON'T think I am grasping at straws. Look at gold's chart, http://schrts.co/Eyyuq1 What was required of gold? Do NOT break down through the short term uptrend line from the $1,201.50 June low. So far, gold has nicely fielded that ball. Next, gold needs to rise above the top boundary of that bullish flag, if that's what it really is. Well, did that today, and even closed right on the line. As long as gold doesn't crack that uptrend, at $1,314 on Monday, it will survive jes' fine. Remember, gold is in an uptrend. Expect strength, expect surprises, expect surprising strength.

What about silver? Well, look, http://schrts.co/2mPkwE

First thing I notice is that volume shrank today, on a down day, gainsaying that direction. Next I notice silver is above its 20 DMA (1958¢) & spent the whole day there. And it punched into the overhead downtrend line, if it failed to close up there.

So while metals might not take off running out of Monday's gate, they aren't about to collapse. To prove they have resumed their rally, silver still needs to close above 2010¢ and gold must conquer $1,335.

Here's a little favour I ask of y'all. If you have bought or sold gold & silver with us and were pleased with our services, would you please recommend us to your friends? If we didn't please you, call me on Monday & I'll straighten it out.

On 22 July 1937 in an unexpected display of spine, the US senate rejected President Franklin D. Roosevelt's proposal to pack the supreme court with justices who would approve his fascist plans. Maybe the yankee government ought to pay for Vertebral Transplants for today's senators. It's embarrassing when they have to grovel like amoebas, lacking all spine.

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
22-Jul-16 Price Change % Change
Gold, $/oz 1,323.10 -7.40 -0.6
Silver, $/oz 19.66 -0.13 -0.6
Gold/Silver Ratio 67.309 -0.372 -0.5
Silver/Gold Ratio 0.0149 -0.0001 -0.6
Platinum 1,085.60 -19.60 -1.8
Palladium 684.45 0.80 0.1
S&P 500 2,175.03 9.86 0.5
Dow 18,570.85 53.62 0.3
Dow in GOLD $s 290.15 2.48 0.9
Dow in GOLD oz 14.04 0.12 0.9
Dow in SILVER oz 944.74 8.77 0.9
US Dollar Index 97.46 0.41 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: 1,322.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,354.04 1,366.60 1,366.60
1/2 AE 0.50 673.86 697.51 1,395.03
1/4 AE 0.25 340.23 355.37 1,421.47
1/10 AE 0.10 137.42 144.79 1,447.92
Aust. 100 corona 0.98 1,287.05 1,296.05 1,322.23
British sovereign 0.24 313.60 326.60 1,387.44
French 20 franc 0.19 248.72 252.72 1,353.64
Krugerrand 1.00 1,330.23 1,340.23 1,340.23
Maple Leaf 1.00 1,332.30 1,346.30 1,346.30
1/2 Maple Leaf 0.50 760.32 694.21 1,388.42
1/4 Maple Leaf 0.25 337.19 353.72 1,414.86
1/10 Maple Leaf 0.10 140.16 144.13 1,441.31
Mexican 50 peso 1.21 1,584.60 1,595.60 1,323.38
.9999 bar 1.00 1,326.93 1,334.30 1,334.30
SPOT SILVER: 19.66      
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 13,981.83 14,266.83 19.95
US 40% silver 1/2s 0.30 5,680.23 5,842.23 19.80
100 oz .999 bar 100.00 1,990.50 2,015.50 20.16
10 oz .999 bar 10.00 198.05 203.05 20.31
1 oz .999 round 1.00 19.76 20.22 20.22
Am Eagle, 200 oz Min 1.00 21.41 22.41 22.41
SPOT PLATINUM: 1,085.60      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 1,100.60 1,130.60 1,130.60
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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.

Other Important Information

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