The Moneychanger
Daily Commentary
Tuesday, 15 November a.d. 2016 Browse the commentary archive

Today I want to concentrate on palladium & interest rates.

Palladium has been ROARING since the first of November. Look at this chart,

Palladium bottomed back in January 2016 and peaked in August. However, its correction, unlike silver & gold's, ended November first. It went all the way down to the uptrend line from January, and has been cavorting ever since. Arrows point to feverishly bullish MACD, huge volume on rises, 200 DMA & uptrend line touch back, and now, palladium is ready to punch through the downtrend line from the August high.

Ain't got a clue what's driving it. It's primarily an industrial metal, used as a catalyst, especially in automotive catalytic converters. Clearly something I don't see is going on, but the chart doesn't lie.

Here is the chart of the yield on the 10 year US treasury note,

Note the gaps in the frenzied rise since Trump's election. Mark also how the yield is punching through the downtrend line from 2007. Yep, it's massively overbought so might correct any time, but that's not the point. What's crucial is that it has most assuredly changed trend to UP. After 36 years of central bank interest rate suppression interest rates have LOADS of upside -- clear blue sky above.

Looky here at the 30 year treasury bond price (not yield),

This chart is broke as the Ten Commandments. Free falling. Will correct a little soon, but trend has turned down. (Y'all don't forget: when interest rates rise, bond prices fall.)

The whole financial landscape is about to suffer an earthquake from rising interest rates. Nobody's watching it. The abyss will open up shortly to swallow the unwary.

US dollar index crept toward that 100.60 resistance, gaining 6 basis points to 100.18 today. Watch what happens when it hits that resistance.

Dow made another new all time high today at 18,923.06, higher by 54.37 (0.29%). S&P 500 played catch up, rising 16.19 to 2,180.39.

Silver gained 15.2 (0.9%) to 1702.9¢ on Comex & gold rose $2.80 (0.2%) to $1,224.00.

I don't reckon the slide in silver & gold is quite over yet, even though both rose today. Gold is trying to find footing around $1,200, silver somewhere above 1600¢. Keep your eye peeled, this is the opportunity.

Durn! I left the lesson off my Susan Story last night. It's for men: y'all have no idea how much your wife accomplishes for you every day, so the chance of your praising her too much or hugging her too often is nil. Treasure what you have.

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
15-Nov-16 Price Change % Change
Gold, $/oz 1,224.00 2.80 0.23%
Silver, $/oz 17.03 0.15 0.90%
Gold/Silver Ratio 71.877 -0.481 -0.67%
Silver/Gold Ratio 0.0139 0.0001 0.67%
Platinum 932.80 1.10 0.12%
Palladium 705.40 8.25 1.18%
S&P 500 2,180.39 16.19 0.75%
Dow 18,923.06 54.37 0.29%
Dow in GOLD $s 319.59 0.19 0.06%
Dow in GOLD oz 15.46 0.01 0.06%
Dow in SILVER oz 1,111.23 -6.79 -0.61%
US Dollar Index 100.18 0.06 0.06%
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SPOT GOLD: 1,227.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,264.74 1,269.03 1,269.03
1/2 AE 0.50 625.72 647.72 1,295.43
1/4 AE 0.25 315.93 330.00 1,319.99
1/10 AE 0.10 128.82 134.46 1,344.55
Aust. 100 corona 0.98 1,196.37 1,205.37 1,229.71
British sovereign 0.24 291.22 304.22 1,292.33
French 20 franc 0.19 226.96 230.96 1,237.05
Krugerrand 1.00 1,245.09 1,255.09 1,255.09
Maple Leaf 1.00 1,237.90 1,251.90 1,251.90
1/2 Maple Leaf 0.50 706.04 644.65 1,289.30
1/4 Maple Leaf 0.25 313.11 328.46 1,313.85
1/10 Maple Leaf 0.10 130.16 133.84 1,338.41
Mexican 50 peso 1.21 1,472.95 1,483.95 1,230.78
.9999 bar 1.00 1,232.20 1,239.90 1,239.90
SPOT SILVER: 17.05      
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 12,687.68 12,973.68 18.15
US 40% silver 1/2s 0.30 4,836.53 4,986.53 16.90
100 oz .999 bar 100.00 1,684.50 1,719.50 17.20
10 oz .999 bar 10.00 171.95 176.95 17.70
1 oz .999 round 1.00 16.85 17.35 17.35
Am Eagle, 200 oz Min 1.00 18.55 20.05 20.05
SPOT PLATINUM: 932.80      
Plat. Platypus 1.00 947.80 977.80 977.80
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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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