The Moneychanger
Daily Commentary
Thursday, 2 February a.d. 2017 Browse the commentary archive

Silver & gold tried today, but didn't quite make it this time. Surely next.

Even with the US dollar index rising 18 basis points (0.18%) to 99.79, silver & gold still rose. Dollar index's move did not bail any water out of its sinking boat, and it looks more and more doomed to visit 97.50

Stocks quibbled and gainsaid each other. Dow fell 6.03 (0.03%) to 19,984.91 but the S&P500 rose 1.30 0.06%) to 2,280.85. Breakdown panic points are 19,800 and 2,267. Drop through those will trigger rats instinct to leave the ship.

Contradiction beset metals as well. Gold rose $11.10 (0.9%) to close on Comex at $1,216.70. Silver dropped back 1.8¢ to 1740.2¢.

Those numbers don't adequately describe the day. Gold hit nearly $1,225 by 11:00, but sellers attacked about that time and drove it as low as $1,214. Not to play the optimist, I still think in a steadily rising market this attack on overhead resistance combined with other up-pointing indicators whispers that tomorrow or the next day gold will burst through that $1,220 resistance for good. But y'all remember to take whatever I say with a truckload of salt, since I ain't no more'n a nat'ral born durn Tennessee fool, & I couldn't tell a economist's matheeematikul model from a Paris fashyun model.

Like gold, silver suffered an assault from sellers about 11:00 but turned weak and flaccid. From a 1772¢ high silver dropped to 1742¢, backing up all the way. Look at the silver chart,

I speculate that silver's greater closeness to its 200 DMA and downtrend line is attracting more speculating traders than gold. If silver has the muscle to overcome those points, and I believe it does, that won't make any lasting difference. And those same sellers will become buyers once silver crosses those lines.

MARK MY WORDS, HEAR THEM: Silver & gold will see higher prices, and soon.

On 2 February 1709 Scottish sailor Alexander Selkirk was rescued after being marooned on an island in the South Pacific San Juan Fernandez Islands. Daniel Defoe later took him as the pattern for his novel, Robinson Crusoe, although he moved the scene from the South Pacific to the Caribbean and added Crusoe's man Friday. Robinson Crusoe is a fascinating novel, if you can find it in the original unexpurgated version. Crusoe's repentance for going to sea & disobeying his father would break the steeliest heart.

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
2-Feb-17 Price Change % Change
Gold, $/oz 1,216.70 11.10 0.92%
Silver, $/oz 17.40 -0.02 -0.10%
Gold/Silver Ratio 69.917 0.709 1.03%
Silver/Gold Ratio 0.0143 -0.0001 -1.01%
Platinum 996.10 -0.20 -0.02%
Palladium 759.10 -3.85 -0.50%
S&P 500 2,280.85 1.30 0.06%
Dow 19,884.01 -6.03 -0.03%
Dow in GOLD $s 337.83 -3.18 -0.93%
Dow in GOLD oz 16.34 -0.15 -0.93%
Dow in SILVER oz 1,142.63 0.83 0.07%
US Dollar Index 99.79 0.18 0.18%
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: 1,215.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,244.36 1,255.30 1,255.30
1/2 AE 0.50 625.31 639.80 1,279.61
1/4 AE 0.25 318.73 326.59 1,306.34
1/10 AE 0.10 127.49 133.06 1,330.64
Aust. 100 corona 0.98 1,182.21 1,191.21 1,215.27
British sovereign 0.24 288.20 301.20 1,279.54
French 20 franc 0.19 226.88 232.88 1,247.34
Krugerrand 1.00 1,228.57 1,238.57 1,238.57
Maple Leaf 1.00 1,225.20 1,239.20 1,239.20
1/2 Maple Leaf 0.50 698.74 637.98 1,275.96
1/4 Maple Leaf 0.25 309.88 325.07 1,300.26
1/10 Maple Leaf 0.10 128.81 132.46 1,324.57
Mexican 50 peso 1.21 1,451.86 1,462.86 1,213.29
.9999 bar 1.00 1,215.20 1,227.20 1,227.20
SPOT SILVER: 17.45      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 23.00 27.00 0.04
VG+ Peace dollar 0.77 17.00 20.00 0.03
90% silver coin bags 0.72 12,226.50 12,512.50 17.50
US 40% silver 1/2s 0.30 4,956.00 5,106.00 17.31
100 oz .999 bar 100.00 1,735.00 1,760.00 17.60
10 oz .999 bar 10.00 176.00 181.00 18.10
1 oz .999 round 1.00 17.70 18.00 18.00
Am Eagle, 200 oz Min 1.00 18.95 20.45 20.45
SPOT PLATINUM: 996.10      
Plat. Platypus 1.00 1,011.10 1,041.10 1,041.10
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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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