The Moneychanger
Daily Commentary
Tuesday, 28 February a.d. 2017 Browse the commentary archive

Sorry I missed y'all yesterday, but I was having fun speaking to Campaign for Liberty in Memphis.

The Trump speech hanging over the evening has markets jittery. Stocks struggled most of the day, the dollar index closed unchanged, & gold and silver fell in the aftermarket. Politicians are like cockroaches: it's not so much what they steal and carry off as it is what they fall into and foul up.

Dow is beginning to have that "I'm rolling over" look. Fell 25.2 (0.12%) to 20,812.24. S&P500 gave up 6.11 (0.2%) to 2,363.64. Although Trump is supposed to have good news for stocks, they are wincing like he's gonna slap 'em.

Dollar index did a strange and rare thing: closed unchanged from yesterday at 101.13. Over the last seven trading days the US dollar index has formed an even-sided triangle, seen right here,

These even sided triangles don't give any hint which way they will resolve, up or down. Dollar today tried to rise, rose higher than yesterday a little skootch, but bumped into the 50 DMA and recoiled like Superman kissing kryptonite. Acts like it wants to rise, but who in the cosmos could say with that speech coming up tonight? That throws all balls in the air.

Silver rose 6.6¢ on Comex, 0.4%, to 1842¢. Gold fell $4.80 or 0.4% to $1,252.60.

All that don't say much, but in the aftermarket metals suddenly fell. Gold peeled off $5.10 to $1,247.50 while silver lost 11¢ to 1831¢.

Seems clear to me that somebody's afraid of what Trump will say & how that will hit silver & gold. Of course the suspicious thought crosses my mind -- perish the thought -- that somebody who got a leak from that speech might be front running it, too, but we know that in this Land of Incorruptibility such things never happen, so I dismiss that with a contemptuous wave of my hand.

Looking at the chart, it looks like gold has a small correction coming here, maybe back to the 20 DMA about $1,235, but then should bounce right back to punch through that 200 DMA like Forest through Sooey Smith.

On 28 February 1638 Scottish Presbyterians signed the National Covenant in Edinburgh. Whatever partisan religious side you come down on, you have to admire the unfailing courage and bold faith of the Scots in defense of that Covenant. Covenanters, as they became known after the Stuart king Charles was restored, refused to conform to any other form of religion, and so for 28 years were hounded and hashed by English dragoons. Best little book I've read on that subject, one that never leaves my mind for long, is Jock Purves "Fair Sunshine: Character Studies of the Scottish Covenanters." Any Christian could read it with profit.

Today is Shrove Tuesday, also known as Fat Tuesday or Mardi Gras, the last day before Lent begins on Ash Wednesday.

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
28-Feb-17 Price Change % Change
Gold, $/oz 1,252.60 -4.80 -0.38%
Silver, $/oz 18.42 0.07 0.36%
Gold/Silver Ratio 68.002 -0.506 -0.74%
Silver/Gold Ratio 0.0147 0.0001 0.74%
Platinum 1,029.50 -7.90 -0.76%
Palladium 770.70 -13.35 -1.70%
S&P 500 2,363.64 -6.11 -0.26%
Dow 20,812.24 -25.20 -0.12%
Dow in GOLD $s 343.47 0.90 0.26%
Dow in GOLD oz 16.62 0.04 0.26%
Dow in SILVER oz 1,129.87 -5.44 -0.48%
US Dollar Index 101.13 0.00 0.00%
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: 1,247.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,278.69 1,288.04 1,288.04
1/2 AE 0.50 641.95 656.81 1,313.62
1/4 AE 0.25 327.21 335.27 1,341.06
1/10 AE 0.10 130.88 136.60 1,366.01
Aust. 100 corona 0.98 1,213.63 1,222.63 1,247.33
British sovereign 0.24 295.86 308.86 1,312.08
French 20 franc 0.19 232.91 238.91 1,279.64
Krugerrand 1.00 1,259.98 1,269.98 1,269.98
Maple Leaf 1.00 1,257.50 1,270.50 1,270.50
1/2 Maple Leaf 0.50 717.31 654.94 1,309.88
1/4 Maple Leaf 0.25 318.11 333.71 1,334.83
1/10 Maple Leaf 0.10 132.24 135.98 1,359.78
Mexican 50 peso 1.21 1,490.45 1,501.45 1,245.29
.9999 bar 1.00 1,247.50 1,259.50 1,259.50
SPOT SILVER: 18.31      
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 12,769.90 13,127.40 18.36
US 40% silver 1/2s 0.30 5,209.70 5,359.70 18.17
100 oz .999 bar 100.00 1,821.00 1,846.00 18.46
10 oz .999 bar 10.00 184.60 189.60 18.96
1 oz .999 round 1.00 18.56 18.86 18.86
Am Eagle, 200 oz Min 1.00 19.31 20.56 20.56
SPOT PLATINUM: 1,029.50      
Plat. Platypus 1.00 1,024.50 1,069.50 1,069.50
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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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