The Moneychanger
Daily Commentary
Monday, 10 October a.d. 2016 Browse the commentary archive

As opposed to last week, silver & gold rose today? How is this week different from last week? Among other things, the Chinese aren't off on holiday, so their gold market is open. Reckon that makes a difference? Don't ask me, I'm jes' a nat'ral born durn fool from Tennessee. Shucks, we ain't even got china, we eat off tin plates.

After Friday's surge into a new high with a lower close (rotten day), the US dollar index, leech on the nations, rose today to the top of the range (97). Rose 26 basis points (0.27%) to 96.92.

Back off that US dollar index chart to a 2 year perspective. Chart's here,

After rising on the Fed's hot mouth-gas from July 2014, it peaked in March 2015 about 100, traded down to 92.52, then rose into December 2015 to another top just over 100. Since then it's been sick as a dog eating peaches, just trembling and flopping back and forth, hitting the bottom of that trading range in May.

Now its finally rallying, but only about halfway up the range, to 97. Assuming that uptrend continues, which it ought, dollar might rally back to 100 in 2017. And since triple tops really don't happen but transmogrify into breakouts, the dollar might move much higher. But first, beat 97.

Bear in mind that any financial crisis, bank failure, or other panic would send the dollar soaring as scairt money runs for cover.

Stocks today edged up, but only to the top boundary of their even-sided triangle formation, which is steadily squeezing them to some resolution, up or down. S&P500 rose 9.92 to 2,163.66 (up 0.46%). Dow Industrials added 88.55 (0.49%) to 18,329.04. Downtrend begun in August remains in force. And it's a broadening top (megaphone). Smile, here's a picture,

Silver added 28.1¢ or 1.6% to close Comex at 1760.5¢. Gold floated up $8.60 (0.7%) to 1,257.50.

It appears silver & gold posted at least a short term bottom last week. What I am cogitating is seasonality & cycles. I don't figure cycles myself because I am too dumb, math-challenged, and lack the imagination to see what doesn't always exist. So I read folks who do figure cycles, and it appears we may (underline that "may") have another low in front of us between now and the election. Whether the goof or the criminal is elected, that uncertainty pressuring the market will be removed.

What sort of lows might that envision? Well if silver's 200 day moving average (now 1711¢) doesn't hold, next support is around 1600¢. WHOA, there. I am not targeting that or predicting that price, only observing that it is the next support. Examine the chart,

Should gold drop further, next support appears at $1,200-- not a prediction, not fortune telling, not crystal balling, just looking at support on the chart. You'll find an 11 month chart here,

As I said, I am merely pondering these things. To prevent them silver & gold need to offer some sign of turning up. Today was a good start. Follow through is needed.

On 10 October 1780 the Great Hurricane of 1780 killed 20,000 to 30,000 souls in the Caribbean.

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
10-Oct-16 Price Change % Change
Gold, $/oz 1,257.50 8.60 0.69%
Silver, $/oz 17.61 0.28 1.62%
Gold/Silver Ratio 71.429 -0.662 -0.92%
Silver/Gold Ratio 0.0140 0.0001 0.93%
Platinum 961.30 -10.00 -1.03%
Palladium 667.50 -9.45 -1.40%
S&P 500 2,163.66 9.92 0.46%
Dow 18,329.04 88.55 0.49%
Dow in GOLD $s 301.31 -0.61 -0.20%
Dow in GOLD oz 14.58 -0.03 -0.20%
Dow in SILVER oz 1,041.13 -11.78 -1.12%
US Dollar Index 96.92 0.26 0.27%
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: 1,257.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,292.92 1,299.83 1,299.83
1/2 AE 0.50 640.92 663.44 1,326.87
1/4 AE 0.25 323.60 338.01 1,352.03
1/10 AE 0.10 131.95 137.72 1,377.18
Aust. 100 corona 0.98 1,221.70 1,230.70 1,255.56
British sovereign 0.24 298.28 311.28 1,322.36
French 20 franc 0.19 232.46 236.46 1,266.55
Krugerrand 1.00 1,267.76 1,277.76 1,277.76
Maple Leaf 1.00 1,267.70 1,281.70 1,281.70
1/2 Maple Leaf 0.50 723.18 660.29 1,320.59
1/4 Maple Leaf 0.25 320.71 336.43 1,345.74
1/10 Maple Leaf 0.10 133.32 137.09 1,370.89
Mexican 50 peso 1.21 1,507.19 1,518.19 1,259.17
.9999 bar 1.00 1,262.10 1,269.70 1,269.70
SPOT SILVER: 17.60      
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 12,973.68 13,259.68 18.55
US 40% silver 1/2s 0.30 4,998.78 5,148.78 17.45
100 oz .999 bar 100.00 1,739.50 1,774.50 17.75
10 oz .999 bar 10.00 177.45 182.45 18.25
1 oz .999 round 1.00 17.40 17.90 17.90
Am Eagle, 200 oz Min 1.00 19.10 20.60 20.60
SPOT PLATINUM: 961.30      
Plat. Platypus 1.00 976.30 1,006.30 1,006.30
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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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