The Moneychanger
Daily Commentary
Monday, 31 October a.d. 2016 Browse the commentary archive

Markets fell strangely silent today, probably terrorized into inactivity by the election.

Suspicious as I am, I wonder that FBI Chief Comey couldn't find enough to indict Clinton back in the summer, but now at the worst time for Hellery discovers thousands of gamey emails. Mmmm. Sounds like Clinton's sponsors & backers among the Elite are backing off, dropping her. If so, she must stink worse than we know.

Now before y'all start ringing up the loony bin and asking them to haul me away as a paranoid, ponder this. Franklin D. Roosevelt, a Democrat,mind you, said, "In politics, nothing happens by accident. It if happens, you can bet it was planned that way." Y'all just hang up the phone & put away the strait jacket.

Here's the US dollar index chart, http://schrts.co/OkJ5UT

US dollar index moved up one microscopic basis point today to 98.35. Last Tuesday the 25th it hit the move's intraday high , 99.09, but ended the day with a lower close, then clinched a key reversal next day with a lower close. Today it tried to rise, but just couldn't muster the resolve. Probably ready for a correction. If Trump wins that might cause a knee jerk reaction of dollar selling. Might.

Euro continues to deteriorate. Lost 0.05% today for a $1.0980 close. Sick as a gutshot dog. Yen also continues to slide & slide. Lost 0.11% today to 95.39.

US 30 year treasury bond can't stop rolling downhill. Has now fallen out of a rising wedge, back into the (blue outlined) trading channel it "threw over" in July. Way below all moving averages. I hope Janet Yellen has stocked up on Rolaids and Scotch, cause she's gonna need 'em. Bond bomb is set to explode. Chart is here, http://schrts.co/ujZfjd

'Twas a rotten week for stocks, fighting to climb over the 20 day moving average, in vain. Today they backed up again. Dow lost 18.77 (0.1%) to 18,142.42 while the S&P500 lost 0.26 (0.01%, can you see that? Squint harder.). Today marked the fifth day the S&P500 has dropped. Fifth day in a row.

Gold shuttered Comex today down $4.00 (0.3%) at $1,271.50. Silver was -- get this -- unchanged at 1776.2¢. That rarely happens.

Go look at the gold chart, http://schrts.co/pbxEDM

Gold broke out of a flag earlier this month & has risen, fandangoing over its 200 DMA, ever since. Notice the volume: it keeps rising as gold rises. Notice also a new intraday high Friday at $1,285.40. And pass not by the other positive indicators, the MACD and RSI. But this is all imagination & pixie dust till gold busts through $1,300 resistance, now running with the 50 DMA at $1,302.67.

Be patient. Be very patient. Higher gold is coming.

Here's the silver chart for your viewing pleasure, http://schrts.co/o96FnV

Like gold, silver drew a pennant during October's first half. Since then it has broken out to the upside, climbed through its 20 DMA, and crawled back into the trading channel it briefly fell out of. RSI & MACD are positive, and silver has been rising on rising volume.

So far, so good, but silver can only gain traction by crossing 1800¢ resistance. Be patient, silver is closing in on it.

Here's the gold/silver ratio. This is not as cooperative as it might be. It rallied October first with the gold & silver plunge, but backed off & has been trading sideways above 71. I don't particularly admire that. An advance in metals ought to take it below the 50 DMA, now 70.27. MACD & RSI have turned down, so the ratio ought soon to follow.

Reader GR asked me about platinum, which I seldom mention. Here's a daily platinum chart for 12 months, http://schrts.co/gP7sGo Looks about like the silver chart, but still struggling to climb above its 200 DMA. It will, it will, and soon.

More to the point is this gold/platinum spread chart, http://schrts.co/zf5rKd With gold trading 1.3 times (130%) platinum, the spread lies in the far upper end of the range, but won't prove it has changed direction until it falls through that blue uptrend line. Minute it does that will be time to buy platinum or to trade a little (a little) gold for platinum.

To sum it all up, silver & gold are slugging they way forward against a headwind. All markets are quiet, suggesting they are afraid to move, uncertain what the election will bring. If the FBI keeps piling into Hellery, that could change. Markets hate uncertainty.

My trip to Virginia was really refreshing. Took 10 hours to drive from Dogwood Mudhole to Roanoke. I asked the clerk at the motel if there was a Mexican restaurant nearby, he said right next door. I walked over there and sitting there realized that I actually enjoyed watching Susan eat more than eating myself. She ate with such gusto it was fun to watch, and this tiny 120 lb woman could eat way more at a sitting than I could. She had the metabolism of a shrew: they have to eat their body weight every day or fade away.

Next day I hit the jackpot. I hate eating at chain restaurants, but it's not easy to find a Mom & Pop place near the interstate. Stopped & asked and was pointed to Angelle's Diner, 2609 Lee Highway, Troutville, VA -- angellesdiner.com. Sweet, welcoming folks and wonderful REAL Southern food. The country ham was perfect, without that aftertaste that sometimes mars its beauty.

I got off I-81 and drove up the Lee Highway (US 11), a road Susan & I have travelled many times, with children, grandchildren, & by ourselves. Drove to Natural Bridge, then on to Lexington, stopping first at the Stonewall Jackson Cemetery to visit Jackson's grave. Can't go to Lee's tomb any more, as the cowards at Washington & Lee have removed the original Army of Northern Virginia battle flags that hung there.

Everywhere I was surrounded by sweet memories & the grace of God. I'd play music Susan loved, and I'd cry and I'd laugh, but I was still comforted. At synod in Richmond I saw lots of old friends who all graciously sympathized. They all loved Susan, too.

So I'm back. Managed to drive the whole way through carnivorous traffic & remain alive, much to my children's astonishment, & I'm going back to work. God is good to me, and I am grateful.

Forgotten in the Hallowe'en frenzy is that tomorrow is All Saints Day when we celebrate all God's people who have gone before us and now with all the company of heaven wait for us.

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
31-Oct-16 Price Change % Change
Gold, $/oz 1,271.50 -4.00 -0.31%
Silver, $/oz 17.76 0.00 0.00%
Gold/Silver Ratio 71.585 -0.225 -0.31%
Silver/Gold Ratio 0.0140 0.0000 0.31%
Platinum 975.80 -2.40 -0.25%
Palladium 617.45 1.65 0.27%
S&P 500 2,126.15 -0.26 -0.01%
Dow 18,142.42 -18.77 -0.10%
Dow in GOLD $s 294.96 0.62 0.21%
Dow in GOLD oz 14.27 0.03 0.21%
Dow in SILVER oz 1,021.42 -1.06 -0.10%
US Dollar Index 98.35 0.01 0.01%
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: 1,277.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,314.44 1,320.19 1,320.19
1/2 AE 0.50 650.96 673.83 1,347.66
1/4 AE 0.25 328.67 343.30 1,373.21
1/10 AE 0.10 134.02 139.88 1,398.75
Aust. 100 corona 0.98 1,245.85 1,254.85 1,280.19
British sovereign 0.24 302.96 315.96 1,342.21
French 20 franc 0.19 236.11 240.11 1,286.05
Krugerrand 1.00 1,294.01 1,304.01 1,304.01
Maple Leaf 1.00 1,287.40 1,301.40 1,301.40
1/2 Maple Leaf 0.50 734.51 670.64 1,341.27
1/4 Maple Leaf 0.25 325.74 341.70 1,366.82
1/10 Maple Leaf 0.10 135.40 139.24 1,392.37
Mexican 50 peso 1.21 1,532.33 1,543.33 1,280.03
.9999 bar 1.00 1,281.87 1,289.40 1,289.40
SPOT SILVER: 17.87      
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 13,381.23 13,667.23 19.12
US 40% silver 1/2s 0.30 5,078.43 5,228.43 17.72
100 oz .999 bar 100.00 1,766.50 1,801.50 18.02
10 oz .999 bar 10.00 180.15 185.15 18.52
1 oz .999 round 1.00 17.67 18.17 18.17
Am Eagle, 200 oz Min 1.00 19.37 20.87 20.87
SPOT PLATINUM: 975.80      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 990.80 1,020.80 1,020.80
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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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