The Moneychanger
Weekly Commentary
Friday, 30 December a.d. 2016 Browse the commentary archive
Here's the weekly scorecard:
  23-Dec-16 30-Dec-16 Change % Change
Silver, cents/oz. 1,570.40 1,593.60 23.20 1.5
Gold, dollars/oz. 1,131.90 1,150.00 18.10 1.6
Gold/silver ratio 72.077 72.164 0.086 0.1
Silver/gold ratio 0.0139 0.0139 -0.0000 -0.1
Dow in Gold Dollars (DIG$) 364.05 355.24 -8.81 -2.4
Dow in gold ounces 17.61 17.18 -0.43 -2.4
Dow in Silver ounces 1,269.35 1,240.12 -29.22 -2.3
Dow Industrials 19,933.81 19,762.60 -171.21 -0.9
S&P500 2,263.79 2,238.83 -24.96 -1.1
US dollar index 102.95 102.29 -0.66 -0.6
Platinum 892.40 901.60 9.20 1.0
Palladium 655.35 682.65 27.30 4.2

Lo, the old year passeth away and the new year entereth. Time to take stock, I reckon. Here are selected results:

XAU gold stock index, + 74.1%

GDJX gold stocks, +64.2%

HUI gold stocks, +64%

GDX gold stocks, +52.5%

Oil (WTIC), + 44.9%

Bank Stock Index, +25.6%

Palladium, + 21.7%

Dow Transports, + 20.4%

Russell 2000, +19.5%

Copper, +17.6%

Silver, + 15.7%

Dow Industrials, +13.4%

S&P500, + 9.5%

Gold, +8.5%

Stoxx 600 (Europe), -1.2%

US 30 year bond, -1.9%

Shanghai, -12.3%

Now to today's markets.

This week, top rail on the bottom, & bottom rail on top. Hard to say for certain just yet, but it appears this week the markets turned, stocks & dollar down and metals up (he said provisionally).

Stocks fell week over week, while silver & gold finally found some footing & fought back. US dollar index has ALMOST confirmed a downturn.

It's worth your while to look a the US dollar index chart here,

Now y'all pay 'tenshion, 'cause this will get a mite complicated. US dollar index today wrecked the bull pennant by falling slap out of the pennant & hitting the 20 DMA. However, it needs one more down day to prove it has cracked. Look at that chart and pivot the right end of that lower pennant boundary down until it touches the bottom of today's trading. What you will have looks like a flag hanging down. That would make it a "bullish" flag, because like wedges, flags point the opposite of the way they usually resolve. Hence that dollar index needs just one more lower day to eliminate the possibility it is making a bullish flag.

All indicators are negative and the other scrofulous, parasitic fiat currencies, the yen & euro, are dancing a jig on the dollar's woe. Euro rose 0.34% to $1.0525. Chart's here,

Yes, the Euro kicked its way through the door at the downtrend line, the 50 DMA, & the bottom boundary of the old range. One more up day cements the gain & proves the euro has turned up, much as that may strain the credulity of rational humans.

Now look at the yen,

Shows a two day breakout over the downtrend line, but without yet penetrating the 20 DMA. Indicators are all bustin' a gut to run away upside. Higher yen soon.

Stocks have rolled over in rounding tops, punching through the uptrend line & now accelerating earthward Dow chart hideth here, & the S&P500 lurketh here,

Silver & gold lost today, but still ended the week up 1.5% or more. Comex gold backed up $6.40 (0.6%) to $1,150.00. Silver dropped 22.7¢ (1.4%) to 1593.6¢.

Both metals are working their way through tough resistance at 1600¢ & $1,150. Cut 'em some slack. Gold's got tangle-footed over its 20 DMA ($1,151.70) but will shake that off and finish climbing out of that bowl in the next three weeks or less. Don't believe me, check the chart,

Something whomped silver upside the head today, driving it to a 1587¢ low. Owch. Finished the day bumping under 1600¢. No surprise traders would dump positions on Friday to lock in gains. Silver chart may be found here,

Silver & gold lows are behind us. 2017 should be one GREAT year for metals.

On 30 December 1525 German merchant banker Jacob Fugger "the Rich" died at age 66. The Augsburg family replaced the Florentine Medicis, building their power by an alliance with the House of Habsburg whose rise to power, as in bribing their way into the Holy Roman Emperorship, the Fuggers financed. The banking company dissolved in 1657. It took the Habsburgs longer.

Why bother y'all with this detail? Simply to show that the symbiosis between political power & banks is nothing new to history. During the Middle Ages and the Renaissance, Italian banks ruled the financial world. That's probably the reason the interest rate in England is called the "Lombard" rate, because Italian bankers from Lombardy were setting the rate in London on Lombard Street.

Events have always unfolded the same. Power allies with banks, banks loan money to power, then more & more money, then power goes bankrupt ruining the banks & sending the center of financial gravity to another country. Don't miss that the "sovereign debt problem" is nothing at all new, and at the end of every episode of massive debt flotation erupts a jubilee when the debt is written off. It will be written off today, because it is too big to be paid. They might do it by outright, honest default, but more likely they will slow-burn inflate it away.

As the French say, "The more things change, the more they stay the same." Except, of course, they say it in French.

May God bless each of you & yours in 2017 with all his great and tender mercies.

Y'all enjoy your weekend.

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
30-Dec-16 Price Change % Change
Gold, $/oz 1,150.00 -6.40 -0.6
Silver, $/oz 15.94 -0.23 -1.4
Gold/Silver Ratio 72.164 -0.391 -0.5
Silver/Gold Ratio 0.0139 -0.0002 -1.4
Platinum 899.60 2.00 0.2
Palladium 682.65 15.30 2.3
S&P 500 2,238.83 -10.43 -0.5
Dow 19,762.60 57.18 0.3
Dow in GOLD $s 355.24 3.02 0.9
Dow in GOLD oz 17.18 0.15 0.9
Dow in SILVER oz 1,240.12 20.95 1.7
US Dollar Index 102.29 -0.42 -0.4
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: 1,151.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,188.45 1,190.18 1,190.18
1/2 AE 0.50 596.87 607.47 1,214.94
1/4 AE 0.25 304.19 309.49 1,237.97
1/10 AE 0.10 125.13 126.10 1,261.00
Aust. 100 corona 0.98 1,123.15 1,132.15 1,155.02
British sovereign 0.24 273.12 286.12 1,215.46
French 20 franc 0.19 215.00 221.00 1,183.74
Krugerrand 1.00 1,166.57 1,176.57 1,176.57
Maple Leaf 1.00 1,161.60 1,175.60 1,175.60
1/2 Maple Leaf 0.50 662.17 604.59 1,209.18
1/4 Maple Leaf 0.25 293.66 308.05 1,232.21
1/10 Maple Leaf 0.10 122.07 125.52 1,255.24
Mexican 50 peso 1.21 1,380.04 1,391.04 1,153.72
.9999 bar 1.00 1,156.21 1,161.60 1,161.60
SPOT SILVER: 15.98      
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 11,565.13 11,851.13 16.58
US 40% silver 1/2s 0.30 4,520.88 4,670.88 15.83
100 oz .999 bar 100.00 1,587.50 1,612.50 16.13
10 oz .999 bar 10.00 161.25 166.25 16.63
1 oz .999 round 1.00 16.23 16.53 16.53
Am Eagle, 200 oz Min 1.00 17.48 18.98 18.98
SPOT PLATINUM: 899.60      
Platinum Platypus 1.00 914.60 944.60 944.60
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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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