The Moneychanger
Daily Commentary
Tuesday, 9 August a.d. 2016 Browse the commentary archive

Peep. Peep, peep, peep, peep. Peep, peep. Sitting three hours in the car with 350 Red Ranger chicks may have left me a permanent bird brain.

Sorry, the log jam didn't break up today, either. Markets remain suspended, refusing to move or follow through decisively.

Stocks are clogged up, bouncing sideways, although Friday the S&P500 made a marginal new high. It closed today 0.85 higher (0.04%) at 2,181.74. Dow climbed -- Hitched? Twitched? -- 3.76 (0.02%) to 18,533.05. Stalling here suggests that even if stocks intend to move higher later, thy need to lie down & rest a while.

US dollar index rose 17 basis points yesterday, and gave back 21 bps today to close at 96.01. Pondering the world's other central banks & their lunatic performance of the last 8 years, the dollar's puniness makes no sense. The dollar is badly mismanaged, but can't hold a burnt match to the yen & euro for pure-Dee insane policies. Now y'all don't take that as me saying something nice about Janet Yellen, cause that's not what I mean by a long shot.

Euro rose 0.26% to $1.1115, but nothing on the chart, including today, raises the least nibble of enthusiasm in my mind. Yen behaves erratically, gapping up and down. Looks to have made a double top about 100, but in the crazy world of fiat currencies, what does a chart mean? Here it is,

Gold rose $5.60 to close Comex at $1,339.00. Silver added 4.6¢, 0.4¢ less than a nickel, to 1981.4¢.

Lo, the gold chart,

Why should I hide my bafflement from y'all? Here 'tis. Gold fell back to the support of its 20 day moving average right where the uptrend line from June also offered support, and it . . . stuck. Stopped falling. However, that pause doesn't negate the double top gold has left behind around $1,375. Yes, it's tangle-footed now, but that force pulling it down should pull it toward $1,310 - 1,300. Gold would only change that outlook by closing ABOVE $1,378. The MACD indicator has also turned down, which shows that downward momentum.

Observe the silver chart here,

Likewise silver baffles me by not following through lower. It clean punctured that uptrend line from the June low, but remains floating on the chart. This won't continue. Unless silver turns & shoots through 2125¢, it will move toward that 1800 - 1825¢ support which used to be the top channel line before the July upside breakout. MACD & RSI both bear witness of lower things to come. Hardest lick that might hit is a fall to that bottom green channel line, now about 1725¢.

I am not foretelling that any of these things will come to pass, because until silver moves and we can see how weak or strong it is, I ain't got the least clue.

Friends, should y'all forget that the market is a pendulum, you will create grave and anxious misery & fretting for yourselves. It swings one way, it swings back the other, three steps forward, two steps back (or 61.2%, as the case may be).

Y'all listen, I can take a lot of pain, but there's just one thing I want y'all to promise me. Never, before I die, make me watch a Billy Bob Thornton movie. Pull out my nails, snatch out my hair, but please! No Billy Bob Thornton.

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
9-Aug-16 Price Change % Change
Gold, $/oz 1,339.00 5.60 0.42%
Silver, $/oz 19.81 0.05 0.23%
Gold/Silver Ratio 67.578 0.126 0.19%
Silver/Gold Ratio 0.0148 -0.0000 -0.19%
Platinum 1,156.50 4.50 0.39%
Palladium 693.10 1.05 0.15%
S&P 500 2,181.74 0.85 0.04%
Dow 18,533.05 3.76 0.02%
Dow in GOLD $s 286.12 -1.14 -0.40%
Dow in GOLD oz 13.84 -0.06 -0.40%
Dow in SILVER oz 935.35 -1.99 -0.21%
US Dollar Index 96.01 -0.21 -0.22%
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: 1,338.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,370.21 1,382.93 1,382.93
1/2 AE 0.50 681.92 705.85 1,411.70
1/4 AE 0.25 344.30 359.61 1,438.46
1/10 AE 0.10 140.40 146.52 1,465.22
Aust. 100 corona 0.98 1,303.74 1,312.74 1,339.25
British sovereign 0.24 317.35 330.35 1,403.36
French 20 franc 0.19 251.70 255.70 1,369.56
Krugerrand 1.00 1,346.13 1,356.13 1,356.13
Maple Leaf 1.00 1,348.10 1,362.10 1,362.10
1/2 Maple Leaf 0.50 769.41 702.50 1,405.01
1/4 Maple Leaf 0.25 341.22 357.94 1,431.77
1/10 Maple Leaf 0.10 141.84 145.85 1,458.53
Mexican 50 peso 1.21 1,601.92 1,612.92 1,337.75
.9999 bar 1.00 1,342.78 1,350.10 1,350.10
SPOT SILVER: 19.83      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25.00 27.00 35.29
VG+ Peace dollar 0.77 20.00 22.00 28.76
90% silver coin bags 0.72 14,067.63 14,353.63 20.08
US 40% silver 1/2s 0.30 5,656.63 5,806.63 19.68
100 oz .999 bar 100.00 1,962.50 2,027.50 20.28
10 oz .999 bar 10.00 199.75 204.75 20.48
1 oz .999 round 1.00 19.63 20.38 20.38
Am Eagle, 200 oz Min 1.00 21.33 22.83 22.83
SPOT PLATINUM: 1,156.50      
Plat. Platypus 1.00 1,171.50 1,201.50 1,201.50
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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.
  • 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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