The Moneychanger
Daily Commentary
Wednesday, 7 September a.d. 2016 Browse the commentary archive

Not any surprise, silver & gold backed up today after yesterday's outsized gains. Market go up, market go down, pendulum swing. Naught to concern metals' owners here, for the scoreboard will soon show higher prices. Normal bounce.

How can you be so sure, Moneychanger? Don't claim to be no more'n a nat'ral born durn fool from Tennessee, but even I can recognize a collapsing chart. My friend Bob the Technical Genius called today and underscored my conclusion. Here's the Gold/Silver Ratio chart,

The Ratio peaked as March opened, and has completed a five wave down move. It completed a correction from the July low at 71.92, and since has collapsed, beginning the next leg down. All indicators point down, and yesterday it punched into the bottom channel line of the last little channel it had traded in. When silver & gold are rallying, the ratio usually declines. That's another argument witnessing that gold & silver made their final correction low on 29 August.

Today Comex gold backed down $5.10 (0.4%) for a $1,344.30 close. No secret here. It bumped its head into overhead resistance at that downtrend line from the July & August highs. That knocked it back, and now gold will take another run at that resistance & next time probably break through.

Y'all hear my words: a POWERFUL upmove is beginning. Don't stand in the way or it will run over you. Don't hesitate to buy, or you'll miss it and have to buy $25 or $50 higher.

Silver's in the same case as gold, only more so. Why? Because silver was so exaggeratedly oversold going into its low last December, way more oversold than gold. It has been playing catch up all year. That's why today off the December lows gold is only 26% higher but silver is 45% higher.

Y'all are watching the living illustration of what I mean when I say, "Silver offers more leverage than gold for your precious metals investment dollar." That's why we've been recommending you buy ore silver than gold in new purchases, and why back when the ratio was near 80:1 we kept recommend you swap gold for silver.

Stocks withered today Dow lost 11.98 (0.06%) to 18,526.14. S&P500 backed off 0.32 to 2,186.16. Rangebound and running out of time.

US Dollar index dead-cat-bounced today after yesterdays plunge. Gained 13 basis points (0.14%) to 94.96. Stands below its 200, 50, & 20 day moving averages in that order. I search but can't find any ground for dollar optimism, unless it is the rotten sorryness of the yen & euro.

On 8 September 1921 at age 16 Margaret Gorman of Washington, DC was crowned the first Miss America. She weighed 108 lb. Want to see how American ideas of beauty have changed? Search for images of Margaret Gorman on the internet. My, oh, my.

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
7-Sep-16 Price Change % Change
Gold, $/oz 1,344.30 -5.10 -0.38%
Silver, $/oz 19.76 -0.29 -1.45%
Gold/Silver Ratio 68.035 0.730 1.08%
Silver/Gold Ratio 0.0147 -0.0002 -1.07%
Platinum 1,091.20 -8.80 -0.80%
Palladium 688.10 -13.10 -1.87%
S&P 500 2,186.16 -0.32 -0.01%
Dow 18,526.14 -11.98 -0.06%
Dow in GOLD $s 284.88 0.89 0.31%
Dow in GOLD oz 13.78 0.04 0.31%
Dow in SILVER oz 937.61 12.96 1.40%
US Dollar Index 94.96 0.13 0.14%
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: 1,344.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,377.91 1,389.33 1,389.33
1/2 AE 0.50 685.08 709.12 1,418.24
1/4 AE 0.25 345.90 361.28 1,445.12
1/10 AE 0.10 141.05 147.20 1,472.01
Aust. 100 corona 0.98 1,307.14 1,316.14 1,342.73
British sovereign 0.24 318.82 331.82 1,409.61
French 20 franc 0.19 248.47 252.47 1,352.28
Krugerrand 1.00 1,351.02 1,361.02 1,361.02
Maple Leaf 1.00 1,354.30 1,368.30 1,368.30
1/2 Maple Leaf 0.50 772.97 705.76 1,411.52
1/4 Maple Leaf 0.25 342.80 359.60 1,438.40
1/10 Maple Leaf 0.10 142.50 146.53 1,465.29
Mexican 50 peso 1.21 1,610.96 1,621.96 1,345.25
.9999 bar 1.00 1,349.01 1,356.30 1,356.30
SPOT SILVER: 19.78      
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 13,999.70 14,285.70 19.98
US 40% silver 1/2s 0.30 5,643.35 5,793.35 19.64
100 oz .999 bar 100.00 1,958.00 1,993.00 19.93
10 oz .999 bar 10.00 199.30 204.30 20.43
1 oz .999 round 1.00 19.58 20.08 20.08
Am Eagle, 200 oz Min 1.00 21.28 22.78 22.78
SPOT PLATINUM: 1,091.20      
Plat. Platypus 1.00 1,106.20 1,136.20 1,136.20
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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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