The Moneychanger
Daily Commentary
Thursday, 28 July a.d. 2016 Browse the commentary archive

Further proof that Establishment Politicians simply do not get the public revulsion that will turn them all out of office: German Chancellor Angela Merkel, who grew up in East Germany after her parents voluntarily migrated there, has refused to back down from her wide-open-door refugee policy, in spite of all the attacks & murders by refugees wielding everything from bombs to guns to axes & machetes. Hollande & the Establishment pols in France will be booted out, too. When folks are brutally murdered, there's liable to be a backlash. You'd think even a politician could grasp that, but apparently not.

While we're on Germany, its largest bank, Deutsche Bank, a criminal enterprise like US large banks, announced a 98% year over year DROP in Q2 income. Shares fell 4% yesterday, and yesterday's $13.25/share close stood 62% below the 31 July 2015 price. Oh, and DB is laying off 3,300 employees, closing its banks in two countries, and 300 branches in Germany. Doomed to die.

Platinum & Palladium do not care what the world thinks, they are rising. Both hit new 2016 highs today, both are challenging post-2011 downtrend lines.

Truly, truly, the only thing keeping the US dollar index afloat was the expectation the Fed incompetents would raise interest rates. That hope dashed, today it fell 32 bps (-0.33%) to 96.72, but at its 96.25 low it had punched clean through the 200 DMA & the rising lower boundary of that flat topped triangle it broke out of two weeks ago. Here,

Stated shortly, the US dollar index just exxed out its upside breakout & showed itself weak as jail house coffee. Also turned down its MACD indicator.

Euro profited from the dollar's woes by rising 0.15% to $1.1078, but still couldn't close above its 200 DMA. Hear my words & watch my lips: the euro is doomed. Do NOT own euros. This is all a central bank sucker play, so stay away.

Yen gained 0.1% to 95 even. I would heap up another load of scorn on the yen, but denouncing the euro has emptied my metaphor sack. How in the Sam Hill can you adequately rave about something that on the very face of it is nuttier than a Salvador Dali painting?

Stock indices gainsaid each other. S&P500 rose 3.48 (0.16%) to 2,170.06 but the Dow Industrials fell 15.82 (0.9%) to 96.72. Stock weakness today piled up confirmation that the Dow in Gold & Dow in silver have ended their upward correction and turned down again.

Not sure what to think about silver & gold today. Comex gold ended up $5.60 (0.4%) at $1,332.30 while silver rose 19.5 (1%) to 2016¢.

That's not nearly as good as it sounds. Silver early in the day was trading as high as 2058¢ but around 9:15 sales hit it hard and drove it back. Same happened with gold, but the selling hit from the 9:15-ish $1,344.30. Gold remained below its $1,338.21 twenty day moving average, silver ended above its 20 DMA (1996¢). Yes, yes, this was a little disappointing, but not fatal to yesterday's breakout. Both have cleared those flag patterns & busted out upside. Bull markets climb a wall of worry. I look for higher prices still.

On 28 July 1794 Maximilien Robespierre, the evil genius of the French Revolutionary Terror and mass executions, himself went to the guillotine. The Revolution always eats her own children.

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
28-Jun-16 Price Change % Change
Gold, $/oz 1,332.50 5.60 0.42%
Silver, $/oz 20.16 0.20 0.98%
Gold/Silver Ratio 66.096 -0.365 -0.55%
Silver/Gold Ratio 0.0151 0.0001 0.55%
Platinum 1,135.60 10.60 0.94%
Palladium 697.35 4.95 0.71%
S&P 500 2,170.06 3.48 0.16%
Dow 18,456.35 -15.82 -0.09%
Dow in GOLD $s 286.32 -1.45 -0.51%
Dow in GOLD oz 13.85 -0.07 -0.51%
Dow in SILVER oz 915.49 -9.73 -1.05%
US Dollar Index 96.72 -0.32 -0.33%
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: 1,333.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,366.53 1,377.86 1,377.86
1/2 AE 0.50 679.42 703.26 1,406.53
1/4 AE 0.25 343.04 358.30 1,433.19
1/10 AE 0.10 138.55 145.99 1,459.85
Aust. 100 corona 0.98 1,297.66 1,306.66 1,333.05
British sovereign 0.24 316.19 329.19 1,398.42
French 20 franc 0.19 250.78 254.78 1,364.62
Krugerrand 1.00 1,338.53 1,348.53 1,348.53
Maple Leaf 1.00 1,341.20 1,357.20 1,357.20
1/2 Maple Leaf 0.50 766.59 699.93 1,399.86
1/4 Maple Leaf 0.25 339.97 356.63 1,426.52
1/10 Maple Leaf 0.10 141.32 145.32 1,453.19
Mexican 50 peso 1.21 1,596.05 1,607.05 1,332.88
.9999 bar 1.00 1,337.87 1,345.20 1,345.20
SPOT SILVER: 20.18      
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 14,321.45 14,607.45 20.43
US 40% silver 1/2s 0.30 5,835.10 5,997.10 20.33
100 oz .999 bar 100.00 2,008.00 2,063.00 20.63
10 oz .999 bar 10.00 200.80 206.80 20.68
1 oz .999 round 1.00 20.08 20.73 20.73
Am Eagle, 200 oz Min 1.00 21.93 22.93 22.93
SPOT PLATINUM: 1,135.60      
Plat. Platypus 1.00 1,150.60 1,180.60 1,180.60
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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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