The Moneychanger
Weekly Commentary
Friday, 17 February a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  10-Feb-17 17-Feb-17 Change % Change
Silver, cents/oz. 1,791.20 1,801.80 10.60 0.6
Gold, dollars/oz. 1,234.40 1,237.60 3.20 0.3
Gold/silver ratio 68.915 68.687 -0.228 -0.3
Silver/gold ratio 0.0145 0.0146 0.0000 0.3
Dow in Gold Dollars (DIG$) 339.44 344.49 5.05 1.5
Dow in gold ounces 16.42 16.66 0.24 1.5
Dow in Silver ounces 1,131.61 1,144.64 13.03 1.2
Dow Industrials 20,269.37 20,624.05 354.68 1.7
S&P500 2,316.10 2,351.10 35.00 1.5
US dollar index 100.75 100.92 0.17 0.2
Platinum 1,008.80 1,003.50 -5.30 -0.5
Palladium 783.15 779.25 -3.90 -0.5

Not as good a week for silver & gold as it promised to be, yet they made solid progress still. Stocks continue to prove that anvils can fly. US dollar index made ambiguous today the key reversal it posted Wednesday & Thursday. Platinum & palladium fell back a tad.

US dollar index chart is here,

It illustrates the warning that a key reversal ought to be confirmed by two days' lower closes, & not just one. You can see that the Dollar Index, after all my chortling yesterday, clawed back most of its loss from Thursday. However, it's feet remained tangled in resistance below 101. And it has been locked in a downtrend since 2017 began. Today's rise might be explained by shorts taking profits before the weekend.

Dow and S&P 500 made new all time highs by slight margins. Dow scraped up 4.28 (0.02%) for a close at 20,624.05. S&P500 augmented by 3.94 (0.17%) to 2,351.10. Can't find the article now but read somewhere this week that US stocks were valued at 130% of US GDP, one of the three highest readings in history.

Gold backed off $2.40 (0.2%) to $1,237.60 at Comex close while silver gave back 4.4¢ for an 1801.9¢ close. That marks Gold's third up week in a row, and silver's eighth [sic]. Silver's monthly chart shows a breakout --- barely -- from an evensided triangle, & gold is forming a similar pattern on its monthly chart.

Trading differed sharply for silver & gold today. Gold traded up to $1,245 by about 10:00, then slid down the hill the rest of the day, closing nearly on the low. To keep this in perspective, I offer you the daily chart,

Gold's momentum indicators all point cloudward, & this week it successful completed a touchback to the Bowl lip/breakout line. All we're waiting for now is the breach of $1,246.60. Could come next week. Next leg up will be long and well-muscled.

Silver's one day chart shows a range between 1809¢ and 1798¢ all day, then a falling after the close. Not at all like gold.

Behold, the daily silver chart,

Give silver credit: its been hammering through resistance at the post-July downtrend line, the 20 DMA, and lateral resistance at 1800¢. In the teeth of all that silver advanced and closed the week higher.

Mark, dear readers, on that chart that silver has not worked its way through all those barriers, and there remains for it naught save running like a scalded dog to 1900¢. But y'all don't pay no 'tension to me. I'm just a nat'ral born durned fool from Tennessee, and don't know nothing at all but selling chenille bedspreads to tourists.

On 17 February 1864 the Confederate submarine the CSS Hunley sank the USS Housatonic at Charleston. Yet more Southern ingenuity. It was the first military submarine to sink an enemy ship. Y'all know we also invented radio and television, but the end of the War took all the channels off line.

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
17-Feb-17 Price Change % Change
Gold, $/oz 1,237.60 -2.40 -0.2
Silver, $/oz 18.02 -0.04 -0.2
Gold/Silver Ratio 68.683 -0.132 -0.2
Silver/Gold Ratio 0.0146 -0.0000 -0.2
Platinum 1,003.50 -9.15 -0.9
Palladium 779.25 -14.10 -1.8
S&P 500 2,351.10 3.94 0.2
Dow 20,624.05 4.28 0.0
Dow in GOLD $s 344.49 0.77 0.2
Dow in GOLD oz 16.66 0.04 0.2
Dow in SILVER oz 1,144.57 3.03 0.3
US Dollar Index 100.92 0.49 0.5
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: 1,234.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,263.20 1,274.93 1,274.93
1/2 AE 0.50 635.41 650.12 1,300.24
1/4 AE 0.25 323.87 331.85 1,327.41
1/10 AE 0.10 129.55 135.21 1,352.11
Aust. 100 corona 0.98 1,201.27 1,210.27 1,234.72
British sovereign 0.24 292.85 305.85 1,299.29
French 20 franc 0.19 230.54 236.54 1,266.94
Krugerrand 1.00 1,248.38 1,258.38 1,258.38
Maple Leaf 1.00 1,244.80 1,257.80 1,257.80
1/2 Maple Leaf 0.50 710.01 648.27 1,296.54
1/4 Maple Leaf 0.25 314.87 330.31 1,321.24
1/10 Maple Leaf 0.10 130.89 134.59 1,345.93
Mexican 50 peso 1.21 1,477.51 1,488.51 1,234.56
.9999 bar 1.00 1,234.80 1,246.80 1,246.80
SPOT SILVER: 17.98      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 26.00 33.99
VG+ Peace dollar 0.77 16.00 18.00 23.53
90% silver coin bags 0.72 12,533.95 12,891.45 18.03
US 40% silver 1/2s 0.30 5,112.35 5,262.35 17.84
100 oz .999 bar 100.00 1,788.00 1,813.00 18.13
10 oz .999 bar 10.00 181.30 186.30 18.63
1 oz .999 round 1.00 18.23 18.53 18.53
Am Eagle, 200 oz Min 1.00 18.98 20.23 20.23
SPOT PLATINUM: 1,003.50      
Platinum Platypus 1.00 998.50 1,043.50 1,043.50
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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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