The Moneychanger
Daily Commentary
Wednesday, 16 November a.d. 2016 Browse the commentary archive

Financial news is filled with headlines "US Dollar hits 13 year high." Hot zig, the millennium hath arrived.

Not exactly. Dollar index close up 19 basis points (0.19% at 100.44. Look at the chart,

Now technically it's true that this dollar index close was higher than 16 March 15 (100.04), or 27 November 15 (100.07), and 2 December 2015 (100.02). However, today's intraday high at 100.6 was not as high as March 2015's 100.72.

Look at the chart & you'll spy what I mean. The dollar index is merely challenging the old highs. Yes, it might break above 101 & run away. If so, it will rise a long ways, as high as 120. On the other hand, if it fails here it & falls thru support would be very, very weak. That would constitute an ironclad reversal.

I notice too that not only is palladium roaring (rose $13.05 today to $718.25), but platinum is also raising its head, up $11.70 on a day when the dollar rose & gold and silver fell. Together with silver & gold's stickiness at 1690¢ & $1,220 I am hearing whispers of a bottom to this fall. So far they are only whispers.

Stocks backed up today. Dow lost 54.92 (0.3%) to 18,868.14. S&P500 retreated 3.45 (0.16%) to 2,176.94. No clear sign of a downward reversal yet, but watch for it. It will come.

Silver backpedaled 11.5¢ (0.7%) to 1691.4¢ on Comex. Gold swooned sixty whole cents to $1,223.40.

Monday both metals began an uptrend on daily charts but silver must hold 1685¢ and gold $1,220 to validate that uptrend. And of course, uptrends don't go sideways, either, so both metals would have to advance. We might have seen the lows, we might not. Be patient. Will probably turn this week.

I was reminded this morning how utterly dull & obtuse I have been about remembering those things that really counted to my dear Susan, birthdays among them. Later I was working on Volume 3 of At Home In Dogwood Mudhole, trying to get it ready to publish before Christmas. By the grace of God, I ran across this little story from 2011 that helped ease my heart considerably:

"Some years I go twelve months without remembering a single birthday, not even my own. Women do not understand this phenomenon. They are born with a tiny gland in their brains, just behind the ear, that doesn't appear in men, called the Birthday Gland. It's working remain one of those mysteries of nature, but it begins to prick them in their hearts whenever a birthday draws closer than thirty-one days. This pricking also stimulates the entire Greeting Card, Present, and Partying limbic system in one of Nature's most ingenious feedback loops. Once all the glands of the GCP&P system begin secreting, a birthday celebration is virtually assured, and virtually impossible to miss.

"As a male, I lack all that equipment, so Susan has adopted all sorts of tricks and stratagems to makes me remember birthdays, especially hers. I reckon she has pretty well reached the end of her rope with me, abandoning subtlety altogether. This year, about thirty days before her birthday, right to my face she began saying, "My birthday is coming up!" She must have feared that wasn't hitting my otic nerve, because finally she spread a catalog in front of me. Pictured there was a Bottle tree. Plain as day, no mystery, no oblique hinting, she pointed and blurted out, "I want a bottle tree for my birthday!" Negotiators need not apply.

" I got it, I got it, I just forgot it. Friday before her birthday on Tuesday I woke up terrorized, realizing that I had not secured her birthday present, nor had I a clue where to buy a bottle tree, nor, with a full Saturday, had I time to hunt one down.

" Susan was out of town visiting her sister, so I hopped up and ran to the office computer in my underwear. I typed "bottle tree" into the search engine, and sure enough, up popped down in Mississippi. I got my order in fast enough to spin your ears off, and I ordered the BIG one, too. Not a chance it would arrive by Tuesday, but I had the dated receipt to prove I had tried.

"Sure as this world it did not arrive, and somehow even my receipt crawled out of my dresser drawer, but Susan did accept my notarized affidavit." [End]

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
16-Nov-16 Price Change % Change
Gold, $/oz 1,223.40 -0.60 -0.05%
Silver, $/oz 16.91 -0.12 -0.68%
Gold/Silver Ratio 72.331 0.453 0.63%
Silver/Gold Ratio 0.0138 -0.0001 -0.63%
Platinum 944.50 11.70 1.25%
Palladium 718.25 13.05 1.85%
S&P 500 2,176.94 -3.45 -0.16%
Dow 18,868.14 -54.92 -0.29%
Dow in GOLD $s 318.82 -0.77 -0.24%
Dow in GOLD oz 15.42 -0.04 -0.24%
Dow in SILVER oz 1,115.53 4.31 0.39%
US Dollar Index 100.44 0.19 0.19%
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: 1,224.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,261.24 1,265.52 1,265.52
1/2 AE 0.50 623.99 645.92 1,291.85
1/4 AE 0.25 315.05 329.08 1,316.34
1/10 AE 0.10 128.47 134.08 1,340.83
Aust. 100 corona 0.98 1,193.05 1,202.05 1,226.33
British sovereign 0.24 290.41 303.41 1,288.91
French 20 franc 0.19 226.33 230.33 1,233.68
Krugerrand 1.00 1,241.64 1,251.64 1,251.64
Maple Leaf 1.00 1,234.50 1,248.50 1,248.50
1/2 Maple Leaf 0.50 704.09 642.86 1,285.73
1/4 Maple Leaf 0.25 312.25 327.55 1,310.22
1/10 Maple Leaf 0.10 129.80 133.47 1,334.71
Mexican 50 peso 1.21 1,468.88 1,479.88 1,227.40
.9999 bar 1.00 1,228.79 1,236.50 1,236.50
SPOT SILVER: 16.97      
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 12,630.48 12,916.48 18.07
US 40% silver 1/2s 0.30 4,812.93 4,962.93 16.82
100 oz .999 bar 100.00 1,676.50 1,711.50 17.12
10 oz .999 bar 10.00 171.15 176.15 17.62
1 oz .999 round 1.00 16.77 17.27 17.27
Am Eagle, 200 oz Min 1.00 18.47 19.97 19.97
SPOT PLATINUM: 944.50      
Plat. Platypus 1.00 959.50 989.50 989.50
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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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