The Moneychanger
Daily Commentary
Tuesday, 1 November a.d. 2016 Browse the commentary archive

Mercy! When I told y'all yesterday to "be patient" waiting for silver & gold to rise, I didn't really think y'all would only have to wait 12 hours. Makes me look sharper than a marble.

News headlines today maintained that Trump's better poll numbers drove gold higher, and, I reckon, the dollar & stocks lower. That's plausible: everybody's looking over their shoulder at the Brexit aftermath, expecting Trump to win. Whether they elect the evil teenager or the blustering teenager in fact won't make much difference economically, as both are communists & believe that government spending actually can help an economy instead of bleeding it dry. But markets don't see that yet.

US dollar index chart can be found here, http://schrts.co/OkJ5UT

Unless you are TERRIBLY far sighted, you will not first the large drop today to 97.62, down 0.67% or 66 basis points after yesterday's one basis point gain. Those unchanged days are unusual, & can produce momentous progeny. Mark also the dollar closed below its 20 day moving average, and right on lateral support about 97.76. Fed meets tomorrow, but can say little to stop this avalanche.

Competing scrofulous, scabby, scurvy fiat currencies profited from the dollar's woe. Euro rose 0.65% to $1.1056 while the yen rose 0.68% to 96.04. Do any of y'all think those two mouse burp currencies really became 0.66% more valuable overnight? None of 'em, dollar included, is backed by anything but confidence. Right, your "money" is a confidence game.

Stocks dropped to new intraday lows and new low closes for the downmove that began in August. When the Dow industrials break 18,000 & the S&P500 punctures 2,100, the rats will STAMPEDE down the ropes for shore, even jump into the waves for safety. Dow today lost 105.32 (0.6%) to 18,037.10 & the S&P500 fell 14.43 (0.68%) to 2,111.72. Weeping, wailing, gnashing of teeth and sweating bullets lie in the near future.

Here's the S&P500 chart, http://schrts.co/vtdPMb See for yourself. Note also volume rising as price declines. As they used to say in the old Tarzan movies, "Bad juju, bwana!"

Dow in gold and Dow in silver have reversed their upward corrections which were occasioned by their correction. That's over now, and stocks are becoming daily cheaper measured by silver & gold.

Gold leapt $14.90 (1.2%) to $1,286.40. Not to be outdone, silver pole vaulted 3.5% or 62.3¢ to 1838.5¢. Platinum jumped 25 or $19.30 to $995.10, & palladium 2.6% ($15.90) to $633.55.

Res ipse loquitur -- the thing speaketh for itself, but let's look closer & see how close I can come to gloating without o'erstepping the line.

Look at the gold chart here, http://schrts.co/pbxEDM

Gold jumped to a high of $1,292, the bottom of a support/resistance zone that reaches from there to $1,300 - $1,305. Great first step. Next, gold, if you please, punch through that bottom channel line and back into your old trading channel. You've already topped the 20 day and 200 day moving averages, now top $1,300 & the 50 DMA. Look for it tomorrow. Fear is a powerful driver. Mark rising volume confirming rising price.

Silver is depicted here, http://schrts.co/o96FnV

Silver did not leap it LAUNCHED through 1800¢. Poked through 1800¢ about 6:00 a.m. Eastern time, and never looked back. High today touched 1851¢. This is not anything like spent, but will run much further.

Must look also at the gold/silver ratio chart here, http://schrts.co/kh9gOy

Remember yesterday I was fretting because the ratio had been moving sideways while ti needed to fall. Today it gapped down from the 20 DAM (71.76) to well below the 50 DMA (69.93) where it ended the day.

Now let's add it all up: dollar tanks taking stocks with it while silver, gold, platinum, & palladium all rise strongly after posting a bottom to a correction. Folks, it's don't get better than this unless Santa Claus is your friend giving you an all-expenses-paid paid American Express card for Christmas.

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
1-Nov-16 Price Change % Change
Gold, $/oz 1,286.40 14.99 1.18%
Silver, $/oz 18.39 0.62 3.51%
Gold/Silver Ratio 69.970 -1.610 -2.25%
Silver/Gold Ratio 0.0143 0.0003 2.30%
Platinum 995.10 19.30 1.98%
Palladium 633.55 15.90 2.57%
S&P 500 2,111.72 -14.43 -0.68%
Dow 18,037.10 -105.32 -0.58%
Dow in GOLD $s 289.85 -5.13 -1.74%
Dow in GOLD oz 14.02 -0.25 -1.74%
Dow in SILVER oz 981.08 -40.34 -3.95%
US Dollar Index 97.62 -0.66 -0.67%
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: 1,287.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,323.55 1,330.63 1,330.63
1/2 AE 0.50 656.12 679.16 1,358.31
1/4 AE 0.25 331.27 346.02 1,384.06
1/10 AE 0.10 135.08 140.98 1,409.81
Aust. 100 corona 0.98 1,255.70 1,264.70 1,290.24
British sovereign 0.24 305.35 318.35 1,352.38
French 20 franc 0.19 237.97 241.97 1,296.05
Krugerrand 1.00 1,304.24 1,314.24 1,314.24
Maple Leaf 1.00 1,297.50 1,311.50 1,311.50
1/2 Maple Leaf 0.50 740.31 675.94 1,351.88
1/4 Maple Leaf 0.25 328.31 344.41 1,377.63
1/10 Maple Leaf 0.10 136.48 140.34 1,403.38
Mexican 50 peso 1.21 1,544.45 1,555.45 1,290.08
.9999 bar 1.00 1,292.01 1,299.50 1,299.50
SPOT SILVER: 18.34      
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 13,645.78 13,931.78 19.49
US 40% silver 1/2s 0.30 5,217.08 5,367.08 18.19
100 oz .999 bar 100.00 1,813.50 1,848.50 18.49
10 oz .999 bar 10.00 184.85 189.85 18.99
1 oz .999 round 1.00 18.14 18.64 18.64
Am Eagle, 200 oz Min 1.00 19.84 21.34 21.34
SPOT PLATINUM: 995.10      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,010.10 1,040.10 1,040.10
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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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