The Moneychanger
Daily Commentary
Thursday, 29 December a.d. 2016 Browse the commentary archive

Markets are building turnaround momentum. Trump Honeymoon may be over, and it looks like Obama is taking one last shot at starting a war with Russia before he leaves office.

Never forget that evil is also stupid.

US Dollar index fell a meaty 53 basis points to land below 103 at 102.71. What yesterday looked like a possible bull pennant with a breakout upside widened out today and nearabout fell out of the pennant. Cliffhanger for the dollar index, but looking at the euro & the yen, the dollar index' future don't look bright. Here's the dollar index, http://schrts.co/OkJ5UT

Euro rose 0.73% today to $1.0491. Chart's here http://schrts.co/OkJ5UT ready to break through the downtrend line and the 20 day moving average.

Yen rose 0.4% to 85.80. Lo, the chart showeth a real breakout through the downtrend line. MACD & RSI also point up for both currencies. Yen chart may be found here, http://schrts.co/UuqBFa

Now to wish ill luck on anyone, notwithstanding my standing revulsion toward and detestation of all fiat currencies, but if the Dollar Index intends to fall, that will greatly boost gold. They are, after all, competitors.

Stocks got bad news from the Land of the Rising Sun where Toshiba was downgraded by Moody's and S&P. Shares dropped 17% & took the Nikkei with them. Probably Obama's saber rattling didn't help either. Markets hate war & uncertainty.

Dow tried to rally, but its resolve was drained by midday. Lost 13.9 (0.7%) for a 19,819.78 close. S&P500 lost 0.66 (0.3%) and closed 2,249.26. Both are following through on yesterday's breakdown through the uptrend line. Both are perched above their 20 day moving averages, and the twig they're sittin' on is about to snap.

You'll get a clearer picture of that accelerating turnaround momentum if you'll look at the Dow in Gold Chart, http://schrts.co/sBnTRC or the Dow in Silver, http://schrts.co/TNOJpa

After striking vertical rallies both appear to have run out of jet fuel, and have only succeeded in placing double tops over the market. Both have turned sharply down lately.

Gold today got tired of other markets calling it "Skinny" & kicking sand in its face and busted through $1,140 and ran all the way to $1,156.40, up $16.60 or 1.5%. Silver wasn't quite as strong, up only 17.5¢ (1.1%) to 1616.3¢.

Before I talk more, another tidbit of momentum turnaround. Financial stocks, a.k.a. the Too Big to Jail banks, have been on a tear, rising more than most other sectors, on anticipation Trump would remove some of the regulations preventing them from coming into your home in person & picking your pocket and knocking out yoiur gold teeth. Today the BKX bank stock index fell 1.06% to 91.35 & smashed through its 20 DMA, first tripwire of a plunge. Chart, http://schrts.co/6qzXmF

I watch the Gold/BKX spread to track the ebb & flow of confidence between financial markets & gold. Chart's here, http://schrts.co/K2RduV

In the first half of 2016 Gold/BKX rose as gold gained value against financial stocks, then went sideways, and finally in November was Trumped. Mark, dear readers, that it hit the bottom channel line and has turned up, yea, gapped up, and poked through the 20 DMA. Note also the MACD & RSI both point skyward.

Back to silver: Chart's right here,http://schrts.co/o96FnV

Y'all can see that unfolding upside-down head & shoulders reversal. MACD is about to turn up & RSI already has. Volume is rising with price. Best news today was that silver closed over 1600¢. This is sterling (Whoops! Pun alert!) but silver's test comes at 1725¢ resistance, which is also the neckline of that suspected head and shoulders. Unless silver can bust clean through 1725¢, there remains a long drawn out right shoulder to complete. Still, we are making progress.

LO, the gold chart, http://schrts.co/AW2KFe

Suddenly gold has a lot of weight on its side. It cleared the 20 DMA with today's close, after breaking through the downtrend line yesterday. Lip of that bowl formation is about $1,200, analogous to silver's 1725¢ resistance. Gold might take another three weeks to finish drawing that bowl.

But it appears, for now, on the evidence of the day, that gold's lowest price is past.

Tonight at 8 p.m. Central time Jason Matyas, producer of the Beyond Off Grid documentary, will be interviewing me over the internet, live (I only look dead sometimes). Unfortunately, not everyone will be able to watch because the live interview and Q&A is limited to only 50 supporters & film customers. (The reason lurks in my slow internet out in the country, & the limited video conferencing that affords.) So if you have been a supporter of the film or have purchased it online or in DVD, you can join us tonight. (Yes, the interview will be available later for all film supporters & customers). Here's a link to the site, http://bit.ly/2hApoOJ

No, I won't be talking about silver & gold, but about community, modernity, and the search for a reasonable, peaceful, & spiritual life, preferably in the country.

Join us if you can.

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
29-Dec-16 Price Change % Change
Gold, $/oz 1,156.40 16.60 1.46%
Silver, $/oz 16.16 0.18 1.09%
Gold/Silver Ratio 71.546 0.255 0.36%
Silver/Gold Ratio 0.0140 -0.0001 -0.36%
Platinum 899.60 -1.80 -0.20%
Palladium 667.35 7.70 1.17%
S&P 500 2,249.26 -0.66 -0.03%
Dow 19,819.78 -13.90 -0.07%
Dow in GOLD $s 354.30 -5.41 -1.50%
Dow in GOLD oz 17.14 -0.26 -1.50%
Dow in SILVER oz 1,226.24 -14.29 -1.15%
US Dollar Index 102.71 -0.53 -0.51%
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: 1,154.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,191.86 1,193.59 1,193.59
1/2 AE 0.50 598.59 609.21 1,218.42
1/4 AE 0.25 305.06 310.38 1,241.52
1/10 AE 0.10 125.49 126.46 1,264.62
Aust. 100 corona 0.98 1,126.37 1,135.37 1,158.31
British sovereign 0.24 273.90 286.90 1,218.79
French 20 franc 0.19 215.62 221.62 1,187.04
Krugerrand 1.00 1,171.07 1,181.07 1,181.07
Maple Leaf 1.00 1,164.90 1,178.90 1,178.90
1/2 Maple Leaf 0.50 664.07 606.32 1,212.65
1/4 Maple Leaf 0.25 294.50 308.94 1,235.74
1/10 Maple Leaf 0.10 122.42 125.88 1,258.84
Mexican 50 peso 1.21 1,382.60 1,393.60 1,155.84
.9999 bar 1.00 1,159.52 1,164.90 1,164.90
SPOT SILVER: 16.12      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 23.00 27.00 35.29
VG+ Peace dollar 0.77 17.00 20.00 26.14
90% silver coin bags 0.72 11,668.80 11,954.80 16.72
US 40% silver 1/2s 0.30 4,563.65 4,713.65 15.98
100 oz .999 bar 100.00 1,602.00 1,627.00 16.27
10 oz .999 bar 10.00 162.70 167.70 16.77
1 oz .999 round 1.00 16.37 16.67 16.67
Am Eagle, 200 oz Min 1.00 17.62 19.12 19.12
SPOT PLATINUM: 899.60      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 914.60 944.60 944.60
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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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