The Moneychanger
Daily Commentary
Monday, 13 February a.d. 2017 Browse the commentary archive

I'm about ready for folks to settle down. Don't y'all get tired of folks yelling in each others faces & calling 'em names as if that were a clever, killer argument. Replacing discourse with discord and rocks ain't a workable idea.

Stock market keeps on powering higher, having broken out of what I thought were megaphone or broadening tops. (Yes, it could be a paroxysmic throwover, quintessential sign of a top, but I'll pull that out on y'all later, after it peaks). Dow rose 142.79 (0.7%) to 20,412.16. S&P500 climbed 12.15 (0.52%) to 2,328.25. Looky here at the S&p500 15 month chart,

Now I don't know fat meat from bacon, but durned if the stock market didn't sent all of 2016 tracing out a fatal rising wedge. And durned if it ain't tickling the upper boundary of that rising wedge right this minute. And durned if markets don't usually bounce down and fall away from such boundaries.

Dow in gold chart here, is a lot more ambiguous that the Dow in Silver, right here, but still not ambiguous enough to worry about. Even with the Dow making new all time highs, the Dow in silver remains below its 20 and 50 day moving averages.

US dollar index is yielding to gravity and slowing down. Rose 16 basis points (0.16%) today to 100.95. Chart's here,

Dollar index is still mire-footed in the upper downtrend line and lateral resistance, all about 100.70 - 100.95. Running out of gas. It has now risen nine of the last nine days. Would you bet on that as a poker hand?

Owch. Silver & gold took a sock to the chin today. Gold lost $10.00 (0.8%) for a Comex close at $1,224.40. Silver lost 10.8¢ 0.6%) & closed Comex at 1780.4¢.

Were gold to puncture $1,220 or silver 1780¢, drop could be sharp. Gold's 20 DMA at $1,215 and silver's at 1737¢ ought to catch and hold.

Here's a lunatic fact: At wholesale, I can buy US 90% today at a nickel an ounce UNDER spot silver. Whoa, if you are ever going to buy 90%, this would be the time.

On 13 February 1945 hundreds of British bombers loaded with incendiary bombs attacked Dresden in Eastern Germany. It was not an industrial or war production city, just a center of culture know as the "Florence on the Elbe." The air attack created a self-feeding firestorm that killed somewhere between 35,000 and 135,000, many of them refugees felling from the Russians. The same day the US air force piled on with nearly another 1000 tons of high explosive bombs and nearly 300 tons of incendiary bombs.

Whether you're an English civilian killed by a German bomb or a German civilian killed by an English bomb, you're just as dead. There's an excellent recent movie about German civilians during the way, "The Book Thief." Wonderful, thoughtful movie, and even your children can watch it.

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
13-Feb-17 Price Change % Change
Gold, $/oz 1,224.40 -10.00 -0.81%
Silver, $/oz 17.80 -0.11 -0.60%
Gold/Silver Ratio 68.771 -0.144 -0.21%
Silver/Gold Ratio 0.0145 0.0000 0.21%
Platinum 998.20 -10.60 -1.05%
Palladium 775.00 -8.15 -1.04%
S&P 500 2,328.25 12.15 0.52%
Dow 20,412.16 142.79 0.70%
Dow in GOLD $s 344.62 5.18 1.53%
Dow in GOLD oz 16.67 0.25 1.53%
Dow in SILVER oz 1,146.49 14.88 1.32%
US Dollar Index 100.95 0.16 0.16%
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: 1,224.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,256.54 1,265.12 1,265.12
1/2 AE 0.50 630.21 644.80 1,289.61
1/4 AE 0.25 321.22 329.14 1,316.55
1/10 AE 0.10 128.49 134.10 1,341.05
Aust. 100 corona 0.98 1,191.45 1,200.45 1,224.70
British sovereign 0.24 290.46 303.46 1,289.11
French 20 franc 0.19 228.65 234.65 1,256.84
Krugerrand 1.00 1,240.62 1,250.62 1,250.62
Maple Leaf 1.00 1,234.70 1,248.70 1,248.70
1/2 Maple Leaf 0.50 704.20 642.97 1,285.94
1/4 Maple Leaf 0.25 312.30 327.61 1,310.43
1/10 Maple Leaf 0.10 129.82 133.49 1,334.92
Mexican 50 peso 1.21 1,465.42 1,476.42 1,224.54
.9999 bar 1.00 1,224.70 1,236.70 1,236.70
SPOT SILVER: 17.80      
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 12,330.18 12,687.68 17.75
US 40% silver 1/2s 0.30 5,057.78 5,207.78 17.65
100 oz .999 bar 100.00 1,769.50 1,794.50 17.95
10 oz .999 bar 10.00 179.45 184.45 18.45
1 oz .999 round 1.00 18.05 18.35 18.35
Am Eagle, 200 oz Min 1.00 19.30 20.80 20.80
SPOT PLATINUM: 998.20      
Plat. Platypus 1.00 1,013.20 1,043.20 1,043.20
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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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