The Moneychanger
Daily Commentary
Monday, 6 February a.d. 2017 Browse the commentary archive

I pause to correct an error from Friday's commentary, in which I implied that the euro had no strength save dollar weakness. True, as far as it goes, but it overlooks (forgive me!) Trump's attempt to talk down the dollar since 17 January, when he opined/tweeted/twitted/whistled that the euro was unfairly undervalued. A few days later one of his underlings repeated similar sentiments.

Since Trump campaigned against unfair advantages of US trading partners, including currency undervaluation, it seems safe to take him at his word. That implies he will be doing what he can to bring down the dollar, if only scourging it with ugly words.

ECB head criminal Mario Draghi said in EU parliamentary testimony today that the ECB does not manipulate currencies. Don' t'row me in dat briar patch, Brer Fox! Meanwhile French presidential candidate Marine LePen says she will take France out of the euro if elected. But Trump & Co. are still talking down the dollar, which so far is benefitting the yen.

US dollar index today shaved off 2 basis points to 99.82, still sliding down that megaphone's lower boundary. Chart's here, http://schrts.co/OkJ5UT Dollar index is targeting 97.50.

Euro lost 0.28% to $1.0754 while the yen rose 0.82% to 89.55.

Stocks backed down today. Dow inched back 190.4 (0.09%) to 20,052.42 and the S&P500 lost 4.86 (0.21%) to 2,292.56. Both remain stuck in a broadening top. They show no will to build on gains, but haven't stumbled either. Be patient. Overvaluation this massive eventually takes its revenge in much lower prices.

Dow in Gold, http://schrts.co/hVkfPw , & Dow in Silver, http://schrts.co/GIo5Y2 have both peaked back in December and now declined well below their 20 & 50 day moving averages. So whatever stocks do, it appears they are going to lose value against silver & gold.

Finally! Gold crashed through $1,220 resistance today and rose $11.50 (0.9%) to close Comex at $1,230. Silver climbed 1.2% or 21.4¢ to 1766.7¢

THIS is what gold needed to launch a rally. Look at the chart, http://schrts.co/dC6Qed

Today gold closed cleanly above that bowl lip & stopped at the November high. No resistance stands between here an the 200 DMA ($1,267). Indicators all favor higher prices, but today's volume was puny. Always something to fret about, even in paradise.

Ponder silver's chart, http://schrts.co/o96FnV

Lo, it hath broken through that neckline resistance, travelled higher three days, touched back to the neckline Friday, and launched higher today. As with gold, I'm not thrilled by that low volume, but everything else is set up for a rally.

Platinum rose $7.40 today for its second day over $1,000. Look here, http://schrts.co/N3bhdI

Knocking on its 200 DMA, platinum needs very little to exceed its last peak in November at $1,023. Chart shows low in December/January 2015, rally into August, reaction and bottom in December, now followed by a rally. Rising platinum contributes to gold's morale.

Palladium rose $24.90 (3.38%) today to $774.35. Chart's here, http://schrts.co/M4H70y

Last peak came in January at $798, not much higher than right now. Palladium stands above all its moving averages, and has everything lined up to rally.

Only strange factor in all this is the absolute deadness of the retail gold & silver markets. Not even as lively as a mortuary. And I get this same story from dealers all over the country.

Me, I think they're wrong. All the pieces are in place for silver & gold to rally.

In 1820 the US population amounted to 9,638,453. Today Tennessee along has 6,192,633, about 2/3 the entire US 1820 population.

I have to drive to Chattanooga tomorrow afternoon for another post operative checkup on my foot, so I will miss sending y'all a commentary. I will also miss on Wednesday, but, God willing, will return Thursday.

Here's another little Susan story. My daughter Mercy was over here last week and found a hand made Father's Day Card from 1983 or 1984. We only had five children at the time, and Mercy was not yet one of them. On the inside of the construction paper card Susan had all the children trace out their hands. On the back she wrote a poem, which was quite unusual for her. But then, she always was surprising me.

Our little hands we give to you --

Because we know how much you go through.

Put them to use to make your load light

And for Jesus our Savior teach them to fight.

Put them together and teach them to pray --

That God walk with you, Dad, each and every day!

We love you -- Sanders 5

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
6-Feb-17 Price Change % Change
Gold, $/oz 1,230.00 11.50 0.94%
Silver, $/oz 17.67 0.21 1.23%
Gold/Silver Ratio 69.625 -0.195 -0.28%
Silver/Gold Ratio 0.0144 0.0000 0.28%
Platinum 1,010.60 7.40 0.74%
Palladium 774.35 24.90 3.32%
S&P 500 2,292.56 -4.86 -0.21%
Dow 20,052.42 -19.04 -0.09%
Dow in GOLD $s 337.01 -3.50 -1.03%
Dow in GOLD oz 16.30 -0.17 -1.03%
Dow in SILVER oz 1,135.09 -15.01 -1.31%
US Dollar Index 99.82 0.18 0.18%
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SPOT GOLD: 1,231.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,261.36 1,272.45 1,272.45
1/2 AE 0.50 633.86 648.54 1,297.09
1/4 AE 0.25 323.09 331.05 1,324.19
1/10 AE 0.10 129.23 134.88 1,348.82
Aust. 100 corona 0.98 1,198.35 1,207.35 1,231.74
British sovereign 0.24 292.14 305.14 1,296.26
French 20 franc 0.19 229.98 235.98 1,263.94
Krugerrand 1.00 1,246.58 1,256.58 1,256.58
Maple Leaf 1.00 1,241.80 1,255.80 1,255.80
1/2 Maple Leaf 0.50 708.29 646.70 1,293.39
1/4 Maple Leaf 0.25 314.11 329.51 1,318.03
1/10 Maple Leaf 0.10 130.57 134.27 1,342.66
Mexican 50 peso 1.21 1,477.93 1,488.93 1,234.91
.9999 bar 1.00 1,231.80 1,243.80 1,243.80
SPOT SILVER: 17.68      
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 12,387.38 12,673.38 17.73
US 40% silver 1/2s 0.30 5,022.38 5,172.38 17.53
100 oz .999 bar 100.00 1,757.50 1,782.50 17.83
10 oz .999 bar 10.00 178.25 183.25 18.33
1 oz .999 round 1.00 17.93 18.23 18.23
Am Eagle, 200 oz Min 1.00 19.18 20.68 20.68
SPOT PLATINUM: 1,010.60      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,025.60 1,055.60 1,055.60
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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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