The Moneychanger
Daily Commentary
Wednesday, 7 December a.d. 2016 Browse the commentary archive

Deutsche Bank AG has agreed to pay $60 million to settle private US antitrust litigation by traders and investors who accused the German bank of conspiring to manipulate gold prices. In October DB agreed to pay $38 million to settle a similar case over silver price manipulation. Four other mega banks are involved, namely, Barclays, Bank of Nova Scotia, HSBC, and Société General.

The bank denies any wrongdoing. Now let me ask y'all a question: would you pay ANYbody $60 million if you had done nothing wrong? The question answers itself, and also answers those who deny manipulation exists in the metals markets and others. They rig the game in their favor, but they can't control the price forever.

Today stocks took their biggest leap since the Trump rally began. Dow rose 297.84 (1.55%) to 19,549.62 & the S&P500 leapt 1.32% (29.12 points) to 2,241.35. Remember that a market always looks strongest at the top.

Huh? Don't you know anything, Moneychanger?

Yup, I know that this is the Dow chart,

More than that, I know that it has been building a giant rising wedge since last January, and that rising wedges usually resolve by tumbling down, and that the target for the Dow's wedge is 15,450. For the S&P500, it's 1,810. That chart's here,

US Dollar index gave up 26 basis points (0.26%) to end the day at 100.27, and beneath its 20 day moving average. First step to lower things. Euro rose 0.32% to $1.0751. Europeans are holding their breath to see what ECB Criminal-in-Chief Mario Draghi will say on Thursday. Yen today rose 0.34% to 87.97.

Well, well. Silver rose 46.3¢ (2.8%) to 1720.3¢ on Comex. Gold rose only $7.40 (0.6%) to $1,175.00. Silver rose a little more than four times as much as gold.

Gold keeps lagging behind silver. Silver has now risen to its highest price since 14 November, and completed a fine rounding bottom. Chart: Silver leapt clean through 1700¢ to a high today at 1730¢. Silver has climbed above its 20 DMA and back up into the channel whence it fell out in November. Silver's RSI & MACD are pointing up, and volume rose today.

Gold, on the other hand, looks like it's been eating tainted meat. RSI is barely above oversold & the MACD hasn't crossed up yet. Today's high at $1,182.30 broke no new ground, and surely didn't cross the $1,200 mark.

In other words, it looks like gold is holding silver back. The gold/silver ratio today hit a new low for the move, 68.302. This chart tells you everything you need to know about silver outperforming gold:

Clearly, either gold will hold silver back or it must begin to play catch-up. To solidify its gains, silver needs to climb above its 20 & 200 Day Moving Averages, now at 1755¢ & 1770¢.

Betting that Trump will deregulate the banks & that interest rates will rise, contributing to bank profits, financial stocks have been blowin' & goin'. Bank Index $BKX has punched thru the top of its trading channel, a likely sign a top is nigh. Chart's right here,

Let's give silver one more day to see if it can hold on -- and whether gold can catch up.

Whoa! My 17-year old grandson Elijah just shot an 8-point buck!

Last night my youngest, Zachariah, came over with his wife Victoria and son Arthur to help Elijah and me set up the Christmas tree. They found all the decorations where Susan had neatly boxed & stored them together in the basement. This morning Victoria was wondering out loud why the pantry, which she and others had laboriously cleaned out, was so disorderly while upon the Christmas decorations Susan had lavished such care.

Simple: Susan adored Christmas, and she adored decorating for Christmas. Her soul's deep desire was to make the world around her beautiful. Sometimes she carried this to what I thought was reckless excess & disregard for physics. She would buy strings and strings of Christmas lights and string them everywhere OUTside. Our log house, The Shoe (named for Susan who had so many children, etc.), sits about 80 yards back in the woods off the road. You can't see it in the summer, but wintertime with the leaves gone you can.

Many a Christmas season I have come home to find Susan high on a ladder teetering precariously against a giant poplar, wrapping lights around it and stapling up lights for all she was worth. She had what I thought was a cavalier disregard for electricity, and since she stapled up the lights WHILE THEY WERE PLUGGED IN, I was fairly certain she would meet her doom one Christmas when she hit the wire with that staple gun, if a fall off the ladder didn't get her first. She showed the same blithe scorn for extension cords, which she ran freely through grass, wet or not. Oddly enough, nothing ever shorted out. The end product was lights outlining the fence along the driveway, lights circling the big poplar trunks, lights on the barn/garage, and of course lights outlining our porch. It was purely magical.

The day Susan died a sheriff's deputy, a rank stranger, came out with the ambulance. Afterwards we were standing out in the driveway, talking with some of my sons. He said to us, "You know, I've driven up and down this road a lot of times, especially at night. Whenever it snowed I would stop by here and just look at the house, covered with snow and lights."

When you pour out yourself to make the world beautiful, or better, you never know who is watching, or how it will move them. Susan was wiser than I am: for the beauty, the risk was worth it. She glorified God in everything.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
7-Dec-16 Price Change % Change
Gold, $/oz 1,175.00 7.40 0.63%
Silver, $/oz 17.20 0.46 2.77%
Gold/Silver Ratio 68.302 -1.447 -2.07%
Silver/Gold Ratio 0.0146 0.0003 2.12%
Platinum 941.70 7.60 0.81%
Palladium 733.00 -1.55 -0.21%
S&P 500 2,241.35 29.12 1.32%
Dow 19,549.20 297.84 1.55%
Dow in GOLD $s 343.93 3.09 0.91%
Dow in GOLD oz 16.64 0.15 0.91%
Dow in SILVER oz 1,136.38 -13.64 -1.19%
US Dollar Index 100.27 -0.26 -0.26%
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SPOT GOLD: 1,173.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,205.84 1,212.30 1,212.30
1/2 AE 0.50 597.72 618.76 1,237.52
1/4 AE 0.25 301.79 315.24 1,260.98
1/10 AE 0.10 123.06 128.44 1,284.44
Aust. 100 corona 0.98 1,144.03 1,153.03 1,176.32
British sovereign 0.24 278.20 291.20 1,237.02
French 20 franc 0.19 216.81 220.81 1,182.69
Krugerrand 1.00 1,187.08 1,197.08 1,197.08
Maple Leaf 1.00 1,183.00 1,197.00 1,197.00
1/2 Maple Leaf 0.50 674.48 615.83 1,231.65
1/4 Maple Leaf 0.25 299.12 313.78 1,255.11
1/10 Maple Leaf 0.10 124.34 127.86 1,278.57
Mexican 50 peso 1.21 1,404.27 1,415.27 1,173.82
.9999 bar 1.00 1,177.11 1,185.00 1,185.00
SPOT SILVER: 17.11      
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 12,805.65 13,091.65 18.31
US 40% silver 1/2s 0.30 4,855.70 5,005.70 16.97
100 oz .999 bar 100.00 1,691.00 1,726.00 17.26
10 oz .999 bar 10.00 172.60 177.60 17.76
1 oz .999 round 1.00 16.91 17.41 17.41
Am Eagle, 200 oz Min 1.00 18.61 20.11 20.11
SPOT PLATINUM: 941.70      
Plat. Platypus 1.00 956.70 986.70 986.70
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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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