The Moneychanger
Daily Commentary
Thursday, 23 February a.d. 2017 Browse the commentary archive

I hate people saying "I told ya so," but I'll be switched if I didn't tell y'all yesterday that silver & gold prices couldn't stay frozen much longer. Well, today they melted -- UP.

Stocks continue to inch higher. Dow today added 0.17% or 34.72 points & closed at 20,810.32. S&500 millimetered up 0.99 (0.04%) to 2,355.09. Get a load of this chart:

This shows the Dow Industrials with Bollinger Bands. What's that? Bollinger bands draw a range around a market's 20 day moving average the should catch 95% of all possible prices, above or below the 20 DMA. Notice that the Dow has been hugging the upper Bollinger Band for 9 days, which stretches the statistical rubber band near to the breaking point of improbability. This occurs against a background of declining volume the last five days, and an astoundingly overbought RSI at 81.55.

Translation: stocks' rise can't last much longer.

US dollar index dropped another 19 basis points to 101.00. Falling through 101 will take the dollar index on a tumble. Gold seems to be whispering that is coming.

Gold popped today. Rose $18.20 on Comex (1.5%) to $1,250.20, highest close & highest intraday high ($1252.20) for the move so far. Silver gained 0.9% or 16.7¢ to close at 1811.7¢, also a new intraday high and new high close. 200 DMA stands at 1797¢, so silver is bulling its way through to higher ground.

Y'all will find silver's chart right here,

Before I get to that, the 24 hour chart shows that silver & Gold began to climb about 10:30 Eastern time and never looked back, closing near the range's top.

Now to the silver daily chart. No resistance lies before silver until it reaches the last high about 1900¢, also the place it broke down in November. This present jump should reach 1900¢ at least, before pausing.

Lo, gold's chart,

Gold's breakdown point analogous to silver's 1900¢ is about $1,300. It will need to blast through the 200 DMA (now $1,265) to get there, but momentum has turned up.

My 36 years in the gold and silver markets has taught me one thing: folks love to buy a rising market. That's what you are watching right now in stocks. But when silver and gold reached a classic risk-free two-wave-bottom buying point, was anybody interested? Hardly. And I've observed that over the years I can plead, beg, remonstrate, & wave charts all day, but most folks will still wait to buy that fast rising price. It's human nature, I reckon, and ain't no point trying to fight that.

Regardless, silver & gold have embarked on a rise that will stretch so far that those who bought in January or February 2017 will still be bragging to the grandchildren they ain't got yet.

I thought I had heard all the stupid ideas possible, but who could outstupid a Secretary in the yankee government? The fellow with the vowel-deficient name, Mnuchin or Munchkin or whatever he's called, Secretary of the Treasury (I bet he can't even type 35 WPM) said today he though it would be a great idea of the yankee government to issue fifty (50) year bonds -- maybe even 100 year.

Mercy, why don't you just stick a gun under bondbuyers' chins & rob 'em fair and square? What ignorant goof would buy the yankee government's promise to pay back 50 years from now when in the last 50 years they have inflated the US dollar by 627%? That means that what cost you $1.38 in 1967 would cost you $10.00 today. The dollar is worth 16% of its 1967 value. For every $100 you gave them in 1967, they'd have to give you back $727 today just to break even.

Is there no END to their taking us for suckers? No end to their scorn for the American people?

On 23 February 1861 by popular referendum, Texas became the seventh state to secede from the union. Don't sound like such a bad idea right now, does it? Much as I love Tennessee, I'd emigrate to Texas in a nanosecond if they'd try it again. And I wouldn't even complain about California going its own way.

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
23-Feb-17 Price Change % Change
Gold, $/oz 1,250.20 18.20 1.48%
Silver, $/oz 18.12 0.17 0.93%
Gold/Silver Ratio 69.007 0.372 0.54%
Silver/Gold Ratio 0.0145 -0.0001 -0.54%
Platinum 1,009.80 9.30 0.93%
Palladium 769.05 4.25 0.56%
S&P 500 2,355.09 0.99 0.04%
Dow 20,810.32 34.72 0.17%
Dow in GOLD $s 344.09 -4.50 -1.29%
Dow in GOLD oz 16.65 -0.22 -1.29%
Dow in SILVER oz 1,148.66 -8.75 -0.76%
US Dollar Index 101.00 -0.19 -0.19%
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: 1,248.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,280.12 1,289.49 1,289.49
1/2 AE 0.50 642.67 657.55 1,315.09
1/4 AE 0.25 327.57 335.64 1,342.57
1/10 AE 0.10 131.03 136.75 1,367.55
Aust. 100 corona 0.98 1,214.99 1,223.99 1,248.72
British sovereign 0.24 296.20 309.20 1,313.49
French 20 franc 0.19 233.17 239.17 1,281.04
Krugerrand 1.00 1,262.64 1,272.64 1,272.64
Maple Leaf 1.00 1,258.90 1,271.90 1,271.90
1/2 Maple Leaf 0.50 718.12 655.67 1,311.35
1/4 Maple Leaf 0.25 318.47 334.08 1,336.32
1/10 Maple Leaf 0.10 132.38 136.13 1,361.30
Mexican 50 peso 1.21 1,494.38 1,505.38 1,248.55
.9999 bar 1.00 1,248.90 1,260.90 1,260.90
SPOT SILVER: 18.17      
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 12,844.98 13,202.48 18.47
US 40% silver 1/2s 0.30 5,166.93 5,316.93 18.02
100 oz .999 bar 100.00 1,806.50 1,831.50 18.32
10 oz .999 bar 10.00 183.15 188.15 18.82
1 oz .999 round 1.00 18.42 18.72 18.72
Am Eagle, 200 oz Min 1.00 19.17 20.42 20.42
SPOT PLATINUM: 1,009.80      
Plat. Platypus 1.00 1,004.80 1,049.80 1,049.80
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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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