The Moneychanger
Daily Commentary
Thursday, 12 January a.d. 2017 Browse the commentary archive

Not content with biting his ankles, the yappy little terriers of the Establishment have jumped for Trump's throat. Still unsatisfied with the election results, they seek to take him out another way. Seems they object not to "fake news" as long as they fake the news.

None of this nourishes the markets like stocks & the US dollar which had been flattering themselves that Trumps election meant new advances. When the Trump press conference turned into a throwdown between Trump and the presstitutes, markets started biting nails and looking for the Exit signs.

All this underscores one phenomenon I've tried to communicate to y'all. Patience is essential in silver & gold investors because those metals do not necessarily ride a steady curve of ascent. Much more likely, you hold them in boredom for a long, frustrating while, then wake up one morning to find they have JUMPED up. That is, silver & gold are subject to discontinuous price events where markets are so terrorized that they rush in "at any price."

For that kind of market, you can't buy when the panic starts. You have to buy it and hold on till the fun starts.

Fake news? Mercy! It's ALL fake news, all of it. If the media told me a wasp had a stinger, I'd pick her up by the wings and turn her around to check.

Dow at one point today sank to 19,770, but recovered to close at 19,891.00, down only 63.28 or 0.32%. S&P ended at 2,270.44, down 4.88 or 0.21%. He who lives by the news, dies by the news.

Yet today's tumble did not really change the chart's look. Dow closed on the 20 DMA, S&P closed above it, but both cut a trapdoor in the 20 DMA during today's trading. At any rate, both remain within their megaphone formations. The real havoc will arrive at 19,600 & 2,230.

US dollar index was Trumped, too. Lost 38 basis points (0.38%) to 101.36. This deserves a look,

Dollar index tried to break down from its Megaphone, & managed intraday to pierce both support at 101.30 & the bottom Megaphone boundary, and the 50 DMA. Owch. However, it rallied later in the day to close above all those points.

What we have here is the first half of a Key Reversal, a break into new low territory with a lower close. Confirmation comes if it closes lower again tomorrow, & would be surest if it closes lower the next two days.

Y'all do remember that the pestilential, scrofulous, scurvy, scabby, parasitical US dollar hath naught but imaginary value, right? Trump didn't, yea, couldn't do anything much to make it healthier, outside the news reports and markets' self-deception.

Silver profited not from the Trumporama. Fell 3/10¢ to 1678¢. That happened in a right lethargic day, ranging only 27¢ from 1675 to 1702¢.

Comex gold closed $3.30 (0.3%) higher at $1,198.90. During the day it traded as high as $1,207.20.

Y'all calm yourselves now & remember that gold price moves spawned by political forces & rumors of wars tend to evaporate as quickly as they materialize. Technically I don't pay much 'tention to the cause, merely the prices on the chart. Gold must penetrate $1,200 & stay above it to maintain a rally. Today it peeked its itty head above the bowl lip, but closed hiding its eyes behind it. By the way, today gold also conquered its 50 DMA (1,192.71). Here comes an acid test, because rallies in falling markets tend to stop at 50 DMAs. Hence it's becomes more important that gold keep advancing.

Regardless whether gold in the short term continues to climb or it falls back to correct, I still believe we saw the correction from the July 2016 high bottom in December.

On 12 January 1879 British forces invaded the Zulu kingdom. One suspects the British shouldn't have picked that particular fight. Recall that the Zulu were the most warlike people in all Africa, with the most well organized army. And oh! They were tough.

The British forces under Lord Chelmsford advanced into Zululand but didn't bump into any Zulus. Then about 22,000 Zulu warriors appeared out of the ground at Isandlwana & wiped out 1,350 British troops. It was the single greatest defeat the British Army ever suffered at the hands of a native army.

The lesson? Despise not thine enemy.

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
12-Jan-17 Price Change % Change
Gold, $/oz 1,198.90 3.30 0.28%
Silver, $/oz 16.78 -0.00 -0.02%
Gold/Silver Ratio 71.448 0.209 0.29%
Silver/Gold Ratio 0.0140 -0.0000 -0.29%
Platinum 980.90 8.70 0.89%
Palladium 764.65 11.35 1.51%
S&P 500 2,270.44 -4.88 -0.21%
Dow 19,891.00 -63.28 -0.32%
Dow in GOLD $s 342.97 -2.04 -0.59%
Dow in GOLD oz 16.59 -0.10 -0.59%
Dow in SILVER oz 1,185.40 -3.56 -0.30%
US Dollar Index 101.36 -0.38 -0.37%
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: 1,198.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,233.05 1,238.44 1,238.44
1/2 AE 0.50 621.10 632.10 1,264.21
1/4 AE 0.25 316.54 322.04 1,288.17
1/10 AE 0.10 130.21 131.21 1,312.14
Aust. 100 corona 0.98 1,168.70 1,177.70 1,201.49
British sovereign 0.24 284.20 297.20 1,262.51
French 20 franc 0.19 223.72 229.72 1,230.44
Krugerrand 1.00 1,212.68 1,222.68 1,222.68
Maple Leaf 1.00 1,208.30 1,222.30 1,222.30
1/2 Maple Leaf 0.50 689.02 629.11 1,258.22
1/4 Maple Leaf 0.25 305.57 320.55 1,282.18
1/10 Maple Leaf 0.10 127.02 130.61 1,306.15
Mexican 50 peso 1.21 1,436.00 1,447.00 1,200.13
.9999 bar 1.00 1,203.09 1,208.30 1,208.30
SPOT SILVER: 16.81      
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 12,162.15 12,448.15 17.41
US 40% silver 1/2s 0.30 4,767.20 4,917.20 16.67
100 oz .999 bar 100.00 1,671.00 1,696.00 16.96
10 oz .999 bar 10.00 169.60 174.60 17.46
1 oz .999 round 1.00 17.06 17.36 17.36
Am Eagle, 200 oz Min 1.00 18.31 19.81 19.81
SPOT PLATINUM: 980.90      
Plat. Platypus 1.00 995.90 1,025.90 1,025.90
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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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