The Moneychanger
Daily Commentary
Monday, 24 October a.d. 2016 Browse the commentary archive

I will be travelling the rest of this week. Susan & I were scheduled to attend our annual diocesan synod in Virginia, a state with magical memories for us, & I've decided to make the trip alone. Might do me some good to be quiet, just drive. God willing, I will write again on 31 October, unless I just take a notion to send one before that.

In the meantime, the shadow of elections hangs over markets like an evil smoke botting out the sun. No light will shine through until one of the evil teenagers is elected.

Silver & gold have not followed through on their promise to rally. Today they traded like the fellow who killed his parents and then tried to throw himself on the mercy of the court because he was an orphan. Well, which is it, up or down?

Silver went up, broke out of that flaggy formation, http://schrts.co/o96FnV

Looked good today with an 11.4¢ gain to 1756.2¢, until you look closer. High came at 1789¢, and silver closed nearer its 1747¢ low than its high. Silver needs to punch through 1800¢, period. Once it does, it will put on rabbit legs and run.

Lo, the gold chart, http://schrts.co/pbxEDM

Gold is sawing back and forth without any gain, but is buoyed up by buyers around $1,250 - $1,260. Throwing a leg over that 20 DMA (1,276.23) would be a good first step, but the goal post is $1,300. Right now gold keeps doing a fandango. back & forth over its 200 DMA. Charmin', but no progress.

So here's the story: Gold must hold $1,250 to keep from falling down, but it won't advance until it conquers $1,290 - $1,300. Overhanging election may keep it trapped in this range.

Silver must not break 1430¢, but to rally must crack 1800¢. All else is meaningless churning.

Back off a minute for the bigger picture. Gold & silver both bottomed last December (I'll break my rule here and say I TOLD Y'ALL SO) & the following strong rally into 2016 proved the bottom. Rally peaked in July for the top of the first leg up, then entered this correction we are suffering yet. This will mark, or already has, the bottom of wave 2, and will take off from here into a foamin'-at-the-mouth 3rd wave rally. That would make now a good time to accumulate metals.

Course, that's only the opinion of a nat'ral born durn fool from Tennessee, & I'm warning y'all, it may be I don't know "Sic 'em" from "Come yere."

Stocks remind me of a one-winged buzzard that can only fly in circles getting lower & lower to the ground. They rose today -- Dow up 77.23 (0.43%) to 18,223.03 & the SP500 up 10.17 (0.47%) to 2,151.33 -- that that don't butter no biscuit. Still in a down trend, still look sick as a 10 year old chewin' tobacco the first time. Green & getting' greener.

US dollar index rose 37 basis points (0.38%) to 98.69. Don't ask me what's driving it, unless its those gullible souls (I'm tryin' to be charitable here) who believe Janet Yellen and the other Fed criminals will raise interest rates in December. Hogwash. Anyhow, dollar index is as overbought as doilies at an old ladies' convention. Here's the chart: look at the RSI above and the MACD below. Only things that could make the dollar look good are the euro & yen, and even then . . .

Keep watching interest rates. Next panic should begin there.

I'll miss y'all. No language could stretch to thanking y'all for all the sweet & comforting expressions of sympathy and condolences you have sent since Susan died. If you were close enough I'd hug every one of you and thank you. Thank you for helping us bear our burden, & reminding us to hope.

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
24-Oct-16 Price Change % Change
Gold, $/oz 1,262.00 -3.90 -0.31%
Silver, $/oz 17.56 0.11 0.65%
Gold/Silver Ratio 71.860 -0.693 -0.96%
Silver/Gold Ratio 0.0139 0.0001 0.96%
Platinum 935.40 6.80 0.73%
Palladium 629.70 10.00 1.61%
S&P 500 2,151.33 10.17 0.47%
Dow 18,223.03 77.32 0.43%
Dow in GOLD $s 298.50 2.18 0.74%
Dow in GOLD oz 14.44 0.11 0.74%
Dow in SILVER oz 1,037.64 -2.35 -0.23%
US Dollar Index 98.69 0.37 0.38%
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: 1,262.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,301.74 1,304.90 1,304.90
1/2 AE 0.50 643.42 666.02 1,332.04
1/4 AE 0.25 324.86 339.32 1,357.30
1/10 AE 0.10 132.47 138.25 1,382.55
Aust. 100 corona 0.98 1,230.17 1,239.17 1,264.21
British sovereign 0.24 299.45 312.45 1,327.29
French 20 franc 0.19 233.37 237.37 1,271.40
Krugerrand 1.00 1,276.49 1,286.49 1,286.49
Maple Leaf 1.00 1,272.60 1,286.60 1,286.60
1/2 Maple Leaf 0.50 726.00 662.87 1,325.73
1/4 Maple Leaf 0.25 321.96 337.75 1,350.98
1/10 Maple Leaf 0.10 133.84 137.62 1,376.23
Mexican 50 peso 1.21 1,513.06 1,524.06 1,264.04
.9999 bar 1.00 1,267.02 1,274.60 1,274.60
SPOT SILVER: 17.56      
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 13,231.08 13,517.08 18.91
US 40% silver 1/2s 0.30 4,986.98 5,136.98 17.41
100 oz .999 bar 100.00 1,735.50 1,770.50 17.71
10 oz .999 bar 10.00 177.05 182.05 18.21
1 oz .999 round 1.00 17.36 17.86 17.86
Am Eagle, 200 oz Min 1.00 19.06 20.56 20.56
SPOT PLATINUM: 935.40      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 950.40 980.40 980.40
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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.
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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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