The Moneychanger
Daily Commentary
Tuesday, 6 December a.d. 2016 Browse the commentary archive

Think of a casino. Players at the blackjack table are tired of losing. They hear a commotion at the roulette tables, where somebody is winning big. They all run over to the roulette tables & lay big bets: that's where the action is.

That describes the US stock market presently. In a self fulfilling prophecy, using plenty of futures and leverage, they rush into stock because "Trump is going to make the economy better." How? When? How fast? This is betting, not investing, herdthink, not shrewd economic forecasting.

But what do I know? Just a nat'ral born durn Tennessee fool who thinks a "stock market" is the same as a "sale barn."

Still hot, stocks rose again today. Dow Industrials augmented by 35.54 (0.18%) to 19,251.78. S&P500 bumped up 7.52 (0.34%) to 2,212.23. Volume is declining, MACD is about to turn down, RSI is as overbought as it ever gets -- all signs that ought to alarm anyone not a gambler.

The US dollar index bounced back 42 basis points to 100.53. Behold, the chart,

The RSI & MACD both proclaim without demurrer that the dollar index has topped. More downside will surely follow.

Euro chart here, looks as if the euro has made at least a temporary bottom & will rally. Yen chart lies here, It has reached and so far stopped at the uptrend line off the August 2015 low. Twould be an apt place for the yen to change direction.

Gold lost $6.40 (0.5%) to $1,167.60 on Comex. Silver lost 8.4¢ (0.5%) for a 1674¢ close.

Both metals are oscillating in ranges. There is not enough selling pressure to push them further down (it appears), but also not enough buying pressure to push them over $1,200 & 1700¢. So they swing back & forth in a tiresome pendulum. I believe we have seen the lows, but silver is having a hard time pulling gold up into a rally. Eventually it will succeed.

On December 13-14 the banana-brains who make up the Fed's Open Market Committee will meet again. Everyone expects them to raise rates, & they are scared to disappoint the public, so they most likely will. 'Twill be a non-event, but for silver & gold it will be a case of sell the rumor, buy the news. In other words, it will remove some threatening downward pressure on metals, & probably mark the end of the correction that began in July.

On 6 December 1884 died in New Orleans Jefferson Finis Davis, first president of the Confederate States of America at age 81, holding his wife Varina's hand. His funeral was one of the largest the South had ever seen. At first he was entombed in Metairie Cemetery, then in 1893 his remains were reinterred at Hollywood Cemetery in Richmond. Davis actually did not favor secession, but went with his state, Mississippi. His critics abound (moral midgets always abound), but Robert E. Lee said of his performance as Confederate head of state, "I know of no man who could have done better."

Best biography is the one Felicity Allen spent 20 years researching & writing, "Jefferson Davis, Unconquerable Heart." It is nearly 1000 pages, but pulls you in like a novel.

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
6-Dec-16 Price Change % Change
Gold, $/oz 1,167.60 -6.40 -0.55%
Silver, $/oz 16.74 -0.08 -0.50%
Gold/Silver Ratio 69.749 -0.032 -0.05%
Silver/Gold Ratio 0.0143 0.0000 0.05%
Platinum 934.10 -2.90 -0.31%
Palladium 734.55 -1.14 -0.15%
S&P 500 2,212.23 7.52 0.34%
Dow 19,251.78 35.54 0.18%
Dow in GOLD $s 340.84 2.48 0.73%
Dow in GOLD oz 16.49 0.12 0.73%
Dow in SILVER oz 1,150.05 7.85 0.69%
US Dollar Index 100.53 0.42 0.42%
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: 1,168.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,203.97 1,208.06 1,208.06
1/2 AE 0.50 595.63 616.59 1,233.19
1/4 AE 0.25 300.73 314.14 1,256.57
1/10 AE 0.10 122.63 127.99 1,279.95
Aust. 100 corona 0.98 1,140.03 1,149.03 1,172.24
British sovereign 0.24 277.22 290.22 1,232.89
French 20 franc 0.19 216.05 220.05 1,178.64
Krugerrand 1.00 1,182.93 1,192.93 1,192.93
Maple Leaf 1.00 1,178.90 1,192.90 1,192.90
1/2 Maple Leaf 0.50 672.12 613.67 1,227.35
1/4 Maple Leaf 0.25 298.07 312.68 1,250.72
1/10 Maple Leaf 0.10 123.90 127.41 1,274.10
Mexican 50 peso 1.21 1,402.18 1,413.18 1,172.08
.9999 bar 1.00 1,172.99 1,180.90 1,180.90
SPOT SILVER: 16.71      
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 12,555.40 12,841.40 17.96
US 40% silver 1/2s 0.30 4,737.70 4,887.70 16.57
100 oz .999 bar 100.00 1,651.00 1,686.00 16.86
10 oz .999 bar 10.00 168.60 173.60 17.36
1 oz .999 round 1.00 16.51 17.01 17.01
Am Eagle, 200 oz Min 1.00 18.21 19.71 19.71
SPOT PLATINUM: 934.10      
Plat. Platypus 1.00 949.10 979.10 979.10
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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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