The Moneychanger
Daily Commentary
Wednesday, 2 November a.d. 2016 Browse the commentary archive

Today is one of those days when events force me to suspect that my cynicism is way too optimistic.

Are any rational or semi-intelligent people fooled by the miasmic word-fog that comes from the Fed and Janet Yellen? We're gonna raise rates, we're not gonna raise rates, employment is rising, employment is fallling, economy is heating up/frosting over, just yak out all the self-contradictory nonsense you can imagine. These folks couldn't beat out a straight answer with a ball peen hammer and a crowbar, because they have no clue what the answer is, what's happening, or how to pour water out of a boot with instructions on the heel.

Why in the world does anybody listen to these fools? I reckon cause they're bigger fools than the Fed fools. Boy howdy, they are gonna be some kind of mad when they figure out how the Fed has scammed 'em! Gonna be decorating lampposts with central bankers.

Stocks broke down today. Dow closed below 18,000 at 17,959.64, down 77.46 and a new low close. S&P500 sank beneath 2,100 to 2,097.94 (down 13.78). Beneath what is there? Only air. Serious avalanching starts soon.

Mercy! Gold shot up $20.40 (1.6%) to close at $1,306.80 on Comex. That's not a typo. Silver rose 27.5 (1.5%) to 1866¢.

GO feast your eyes on the gold chart,

First look at this: It shot clean through the 50 day moving average and closed above that $1,300 resistance. It has traded back up into the trading channel from which it fell out. (There's a better construction in that sentence somewhere, but durned if I can pull it out.) The MACD is in upward mode and has lots of room to move up. So is the RSI. Volume is good, rising with price. Hellery Clinton's emails are GOOD for gold. This rally will run further.

Silver chart's here,

Silver cleared its 50 DMA and has set its sights on that top trading channel boundary. Volume was a little lower today, but was huge yesterday, signifying folks climbing aboard. RSI & MACD still have a ways to run.

About the 8th of November there's a little cyclical top due, which might mark the limit of this run & beginning of a small correction. Regardless, silver & gold have begun their next rally, will end the year higher, and will jump into 2017. Better buy.

Somebody quesitoned me about remarking yesterday that both Hillary & Trump are "communists." I meant what I said, honestly. If somebody backs, promotes, & believes in all 10 planks of the communist manifesto, if he/she/it supports government control of the economy (no matter houw it's done), if they believe thaht they and the godlike bureaucrats in Washington or Moscow know better than we filthy, unwashed proletarians what's good for us, then they are communists. If it swaggers like a communist, steals people's money and gives it to the state, cripples the economy, and all with self- righteous moral superiority, then it IS a communist.

I may be a nat'ral born durn fool from Tennessee, but I AIN'T no communist.

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
2-Nov-16 Price Change % Change
Gold, $/oz 1,306.80 20.40 1.59%
Silver, $/oz 18.66 0.28 1.50%
Gold/Silver Ratio 70.032 0.062 0.09%
Silver/Gold Ratio 0.0143 -0.0000 -0.09%
Platinum 998.20 3.10 0.31%
Palladium 633.95 0.40 0.06%
S&P 500 2,097.94 -13.78 -0.65%
Dow 17,959.64 -77.46 -0.43%
Dow in GOLD $s 284.10 -5.75 -1.98%
Dow in GOLD oz 13.74 -0.28 -1.98%
Dow in SILVER oz 962.47 -18.61 -1.90%
US Dollar Index 97.46 -0.30 -0.31%
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: 1,296.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,334.88 1,339.42 1,339.42
1/2 AE 0.50 660.45 683.64 1,367.28
1/4 AE 0.25 333.46 348.30 1,393.20
1/10 AE 0.10 135.98 141.91 1,419.12
Aust. 100 corona 0.98 1,263.99 1,272.99 1,298.70
British sovereign 0.24 307.37 320.37 1,360.95
French 20 franc 0.19 239.54 243.54 1,304.46
Krugerrand 1.00 1,312.85 1,322.85 1,322.85
Maple Leaf 1.00 1,306.00 1,320.00 1,320.00
1/2 Maple Leaf 0.50 745.20 680.40 1,360.80
1/4 Maple Leaf 0.25 330.48 346.68 1,386.72
1/10 Maple Leaf 0.10 137.38 141.26 1,412.64
Mexican 50 peso 1.21 1,554.65 1,565.65 1,298.54
.9999 bar 1.00 1,300.54 1,308.00 1,308.00
SPOT SILVER: 18.48      
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 13,674.38 13,960.38 19.53
US 40% silver 1/2s 0.30 5,258.38 5,408.38 18.33
100 oz .999 bar 100.00 1,827.50 1,862.50 18.63
10 oz .999 bar 10.00 186.25 191.25 19.13
1 oz .999 round 1.00 18.28 18.78 18.78
Am Eagle, 200 oz Min 1.00 19.98 21.48 21.48
SPOT PLATINUM: 998.20      
Plat. Platypus 1.00 1,013.20 1,043.20 1,043.20
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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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