The Moneychanger
Weekly Commentary
Friday, 20 January a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  13-Jan-17 20-Jan-17 Change % Change
Silver, cents/oz. 1,672.00 1,699.70 27.70 1.7
Gold, dollars/oz. 1,195.30 1,204.30 9.00 0.8
Gold/silver ratio 71.489 70.854 -0.636 -0.9
Silver/gold ratio 0.0140 0.0141 0.0001 0.9
Dow in Gold Dollars (DIG$) 343.91 340.35 -3.56 -1.0
Dow in gold ounces 16.64 16.46 -0.17 -1.0
Dow in Silver ounces 1,189.34 1,166.56 -22.78 -1.9
Dow Industrials 19,885.73 19,827.95 -57.78 -0.3
S&P500 2,274.64 2,271.31 -3.33 -0.1
US dollar index 101.21 100.83 -0.38 -0.4
Platinum 982.40 972.20 -10.20 -1.0
Palladium 748.55 787.80 39.25 5.2

The worm continues to turn. Dow posted its second straight losing week after a 7 week winning streak. Ditto the S&P500, with a less consistent winning streak. Silver & gold both added a fourth straight week to their winning streak. US dollar index fell this week, 5th falling week out of the last seven, and waaay lower than its 103.82 intraday high on 3 January 2017.

Whoa! Y'all got you a new prezzydint! I hope he does a good job for y'all. One good thing he's done already (and I ain't expectin' nothin') is to get a bunch of Hollywood actors to vow to leave the country. Yo! Canada! Look out! Mexico -- duck!

Let us pause in this funful journey to ponder the means of our servile oppression, the scrofulous, mangy vampire bat that drinks at our common jugular, the US dollar. US dollar index closed decisively lower today, but not quite low enough to remove all doubt. Picture of the scurvy currency is here,

Dollar index has been forming a megaphone top since mid-December. For more than a week it has been stumbling over the 101.25 support and the megaphone's bottom boundary and its 20 day moving average - they were all running together. Today it closed at 100.83, down 31 basis points (0.31%), below all three markers. Were it an ordinary market unmolested by Nice Government Men with a political agenda, we would say it will sink like your car keys dropping out of your shirt pocket off a bass boat in the middle of Lake Okeechobee. However, the NGM are real, and do manipulate, so they might push the dollar index up against the market's will -- for a while. The market's will may be read in the falling RSI (below 50) and falling MACD, and is will is to seek a lower elevation. 'Tain't clear to me yet whether the dollar index is merely correcting the long rise from November preparing to rise higher, or it has emptied its tank altogether. For the near term the trend is lower.

Without much notice the 10 year Treasury Yield (proxy for interest rates) broke out from its recent downtrend with a gap up, and remains now two long days above the 20 DMA. Ponder the picture,

Artifact? Outlier? Quirk? Not according to the 30 year treasury bond. Its price peaked (bond prices move opposite to interest rates) in July & has been falling ever since -- except for a pale and pallid rally from December until the last two days. It touched the 50 DMA & fainted. Way higher interest rates coming. Watch out!

Both the S&P500 & the Dow Industrials ended the week lower. Dow gained 94.85 (0.48%) to end the week at 19,827.95. S&P500 scooted up 7.62 (0.34%) to 2,271.31. I know y'all may get tired ("tahrd", we say) of hearing this, but both indices have traced a megaphone top. It's a slowly built but certain formation. Be patient.

Patience hath already drawn its wages with the Dow in Gold and Dow in Silver, which have both turned down after posting double tops with the December 2015 lows. Lo, the Dow in Gold chart,

Dow in Gold made a slightly higher high (16.85 against 17.52 oz). Peaked in December and now has fallen through the 20 DMA, support from the old top, and is banging on the 50 DMA's door. Indicators unanimously point down, friends.

Dow in Silver mirrors silver's greater strength for the past year. Double top came almost the same level, topped in December when it failed at resistance from the old top, and now has fallen through the trap doors at the 20 & 50 DMAs. Promiseth to move lower. Since a picture is worth 1,000 words, go look at

Let us now cheerfully press forward to silver & gold. On Comex gold edged up $3.40 (0.3%) to $1,204.30. Silver millimetered 3¢ higher to 1699.7¢.

Janet Yellen's slap two days ago has worn off. Silver made a higher low and higher high than yesterday and so did gold. When gold pushes through $1,217.50 it will take off again. Silver has yet to pierce 1725¢ successfully, and must accomplish that first.

Gold's real test arrives about $1,270, though $1,233 will slow it down, too. 200 DMA lies up around $1,270, so gold ought to reach that far anyway.

Silver's chart's right here.

That pattern on the chart, either a double bottom or an upside-down head and shoulders, hasn't been disrupted. Silver fell back to its 50 DMA to get its balance, but should not fall through that. Ought to use it as a springboard. Monday.

Bottom line: silver & gold have turned up. Stop sitting on the sidelines. Buy no.

Once again I solicit your prayers for foot surgery I have to undergo on Wednesday, 25 January. That will keep me from sending commentaries Tuesday, Wednesday, & Thursday of next week, but, God willing, I will be back on Friday.

Mercy. A reader wrote that I had defined an uptrend as a "series of higher highs and lower lows." I reckon that left y'all scratching your heads, as it is "higher highs and higher lows." I apologize, but truth is that since Susan passed away I make mistakes I've never made before. I must be distracted at some very deep level, so y'all pay attention to what I mean, and not what I say.

On this day in 1801 John Marshall was appointed chief Justice of the US Supreme Court. I might as well hang for a goose as for a gander, so I reckon I'll tell y'all I'm no fan of Marshall whom all the statists and centralizers adore. He was the one who usurped power to "make law" for the Supreme Court, a power the constitution's framers never intended it to have. I share my low opinion of Marshall with someone whose opinions are worth far more than mine, Thomas Jefferson.

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
20-Jan-17 Price Change % Change
Gold, $/oz 1,204.30 3.40 0.3
Silver, $/oz 17.00 0.03 0.2
Gold/Silver Ratio 70.854 0.199 0.3
Silver/Gold Ratio 0.0141 0.0000 0.2
Platinum 972.20 19.90 2.1
Palladium 787.70 37.25 5.0
S&P 500 2,271.31 7.62 0.3
Dow 19,827.95 94.85 0.5
Dow in GOLD $s 340.35 0.70 0.2
Dow in GOLD oz 16.46 0.03 0.2
Dow in SILVER oz 1,166.56 3.53 0.3
US Dollar Index 100.83 -0.31 -0.3
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: 1,204.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,238.02 1,244.04 1,244.04
1/2 AE 0.50 619.70 634.06 1,268.13
1/4 AE 0.25 315.87 323.66 1,294.62
1/10 AE 0.10 126.35 131.87 1,318.71
Aust. 100 corona 0.98 1,174.55 1,183.55 1,207.46
British sovereign 0.24 285.62 298.62 1,268.56
French 20 franc 0.19 224.84 230.84 1,236.44
Krugerrand 1.00 1,216.34 1,226.34 1,226.34
Maple Leaf 1.00 1,214.30 1,228.30 1,228.30
1/2 Maple Leaf 0.50 692.47 632.26 1,264.52
1/4 Maple Leaf 0.25 307.10 322.15 1,288.60
1/10 Maple Leaf 0.10 127.66 131.27 1,312.69
Mexican 50 peso 1.21 1,444.64 1,455.64 1,207.30
.9999 bar 1.00 1,204.30 1,216.30 1,216.30
SPOT SILVER: 17.00      
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 12,188.61 12,474.61 17.45
US 40% silver 1/2s 0.30 4,822.37 4,972.37 16.86
100 oz .999 bar 100.00 1,689.70 1,714.70 17.15
10 oz .999 bar 10.00 171.47 176.47 17.65
1 oz .999 round 1.00 17.25 17.55 17.55
Am Eagle, 200 oz Min 1.00 18.50 20.00 20.00
SPOT PLATINUM: 972.20      
Platinum Platypus 1.00 987.20 1,017.20 1,017.20
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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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