The Moneychanger
Daily Commentary
Monday, 25 July a.d. 2016 Browse the commentary archive

July is such a precious, peaceful month. I think we ought to ban political activity and news coverage the whole month, just so we could get some peace & refreshment. If y'all could drive through Robinson Branch with me where it's cool and the green sunlight trickles through the leaves, you'd vote for peace & refreshment, too.

I woke up this morning thinking about gold & silver, something I don't usually do. It occurred to me that we will probably see metals moving sideways through at least half of August. If y'all had been through as many Augusts with gold & silver as I have, you'd be expecting them to begin rallying in the latter half of August.

Markets are hesitating like a baseball flung in the air, just before it turns and starts down.

US dollar index sustained its habits of slovenly weakness and lost 20 basis points (0.21%) to 97.32. Broke out of the triangle, but won't follow through. Still makes no sense. You'd have to be one speculatin' FOOL to sell dollars for euros now. I'm sorry, call me a tick-bitten, chigger-riddled, one-gallus hick, I just can't make a lick of sense out of the scrofulous dollar.

Who would buy euros? Euro is one of the best arguments I know for owning gold. Well, it rose today 0.16% to $1.0993. Looking at that six month chart, it looks like the Nice Government Men are letting it down slowly. See what you think.

Yen has gotten snagged in its 50 DMA, & so far that's stopped its roll down the hill. Gained 0.3% today to 94.52.

D'yall ever push an upright piano out a window? Once you get it on the window sill, you can just inch it out a little bit at a time & its weight is still mostly on your side or balanced. Right the second it gets overbalanced, that whole thing turns casters up in the air and falls 4 stories to the sidewalk.

That's what this chart reminds me of: Yep, it's the S&P500. Today it lost another 6.55 (0.3%) trading sideways & closed 2,168.43. Dow looks the same. Lost 77.79 (0.42%) to 18,493.06. They're pushing further & further out that window, & one day they'll get overbalanced.

OIL (WTIC) is trying to break down. Closed today below the lower channel line. On rising volume.

Gold lost $3.60 (0.3%) to $1,319.50 on Comex. Silver subtracted 4.2¢ (0.2%) to 1961.5¢.

Gold chart is right here,

You have to be patient enough to let any pattern work itself out, but gold has now traded into the nosecone formed by the bullish flag boundaries and the uptrend line from June. Bumped into the uptrend line today, but didn't close there. Unless it closes higher tomorrow, it runs the risk of breaking that uptrend line and falling back to the 50 DMA at $1,291.

Silver's here, Silver has traded out into the nose of a triangle and has about one more day before it will be squeezed out. Closed today right on the 20 DMA.

I'm gonna get in trouble if I keep trying to say something when I've said all I had to say, so I'll say Good Night!

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
25-Jul-16 Price Change % Change
Gold, $/oz 1,319.50 -3.60 -0.27%
Silver, $/oz 19.62 -0.04 -0.21%
Gold/Silver Ratio 67.270 -0.039 -0.06%
Silver/Gold Ratio 0.0149 0.0000 0.06%
Platinum 1,085.00 -0.60 -0.06%
Palladium 687.15 2.10 0.31%
S&P 500 2,168.43 -6.55 -0.30%
Dow 18,493.06 -77.79 -0.42%
Dow in GOLD $s 289.72 -0.43 -0.15%
Dow in GOLD oz 14.02 -0.02 -0.15%
Dow in SILVER oz 942.80 -1.94 -0.21%
US Dollar Index 97.32 -0.20 -0.21%
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: 1,315.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,346.76 1,359.26 1,359.26
1/2 AE 0.50 670.24 693.77 1,387.54
1/4 AE 0.25 338.41 353.46 1,413.84
1/10 AE 0.10 136.68 144.01 1,440.14
Aust. 100 corona 0.98 1,280.13 1,289.13 1,315.18
British sovereign 0.24 311.92 324.92 1,380.29
French 20 franc 0.19 247.39 251.39 1,346.49
Krugerrand 1.00 1,323.09 1,333.09 1,333.09
Maple Leaf 1.00 1,325.20 1,339.20 1,339.20
1/2 Maple Leaf 0.50 756.24 690.48 1,380.96
1/4 Maple Leaf 0.25 335.38 351.82 1,407.26
1/10 Maple Leaf 0.10 139.41 143.36 1,433.57
Mexican 50 peso 1.21 1,576.09 1,587.09 1,316.32
.9999 bar 1.00 1,319.80 1,327.20 1,327.20
SPOT SILVER: 19.57      
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 13,921.05 14,206.05 19.87
US 40% silver 1/2s 0.30 5,655.15 5,817.15 19.72
100 oz .999 bar 100.00 1,982.00 2,007.00 20.07
10 oz .999 bar 10.00 197.20 202.20 20.22
1 oz .999 round 1.00 19.67 20.13 20.13
Am Eagle, 200 oz Min 1.00 21.32 22.32 22.32
SPOT PLATINUM: 1,085.00      
Plat. Platypus 1.00 1,100.00 1,130.00 1,130.00
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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.
  • 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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