The Moneychanger
Daily Commentary
Thursday, 9 March a.d. 2017 Browse the commentary archive

If you ain't got much to say, then get off the podium quick!

Ain't there no bottom for silver & gold?

Today makes the 8th anniversary of stocks' 2009 low. Dow closed at 6,547.05 & S&P500 at 676.53. Both had peaked in October 2007 and the crash began in September 2008 during the Great Financial Panic. Silver & gold bottomed early in November 2008, but stocks simply kept on falling.

Is there a lesson hidden here? Might be that present prices blind you to future possibilities. Dow has risen 3.2 times since 2009 & the S&P500 3.5 times. Had you told anyone in 2009 that the Dow would trade at 21,000 in 2017 or the S&P500at nearly 2,400, they'd have fitted you with a jacket with cuffs buckling in the back & lodged you in a room with mattresses on the wall & bars on the windows. Yet there 'tis today.

So today gold is about $1,200 and silver about $17. When I say to y'all that the rule of thumb about recoveries after mid-life crises such as silver & gold saw from the 2011 highs to the December 2015 lows says gold will rise to $1,050 x 7.5 and silver to $13.50 x 12.5 at least, y'all want to reach over & phone the funny farm & tell 'em to come pick up this nat'ral born durn fool from Tennessee. Well, y'all just hide and watch what happens with metals.

The anniversary of the 2009 low was not kind to stocks. Dow managed to rise 2.46, almost visible from immediately above the chart with a jeweler's loupe, for a close 0.01% higher at 20,858.19. S&P500 gained -- hold yer breath -- 1.84 to 2,364.87. S&P500 also stuck its foot clean through the 20 day moving average, but pulled it back without closing down there. MACD is pointing down, RSI is eroding -- 'tain't an edifying picture. See it here, http://schrts.co/vtdPMb

West Texas Intermediate Crude has broken down good & proper. Chart is right here, http://schrts.co/DmHGmK

That rising blue line ascendeth from the February 2016 low. In two days' tumble WTIC has already reached it 200 DMA. Wow. Implies monumentally lower prices.

On Comex where the traders take no prisoners silver lost 26.4¢ (1.5%) to close at a morale-bustin' 1699.3¢. Gold held on above $1,200 but surrendered $6.10 (0.5%) to close at $1,202.40.

Here's the gold/silver ratio chart, http://schrts.co/kh9gOy

Y'all can see where it today poked through that green line, the downtrend from the March 2015 high. That leads to two mutually contradictory conclusions. First, the year long downtrend has ended & the ratio is about to move much higher, which is the same as saying silver & gold are about to move much lower. Second, this little throw over marks the limit of the silver & gold slide and their prices will soon turn up. It hasn't moved far enough through the downtrend line to call yet (he said with weaseling intrepidity).

Both silver & gold closed below their 50 day moving averages today. Again, either they grab hold here & turn around, or fall much lower.

Doesn't make much difference. Regardless what happens here in the sort term, higher silver & gold prices are backed in by the gargantuan credit bubble alone, not to mention Trump's new deficit-spawning programs. Y'all be patient.

On 9 March 1793 the US Congress contracted with Simeon North of Berlin, Connecticut, for 500 horse pistols at the price of $6.50 each. Going rate at the time was 75¢, so it was the first exercise in government defense contracting.

Why were they arming horse with pistols anyway?

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
9-Mar-17 Price Change % Change
Gold, $/oz 1,202.40 -6.10 -0.50%
Silver, $/oz 16.99 -0.26 -1.53%
Gold/Silver Ratio 70.759 0.729 1.04%
Silver/Gold Ratio 0.0141 -0.0001 -1.03%
Platinum 935.90 -12.30 -1.30%
Palladium 772.40 -23.50 -2.95%
S&P 500 2,364.87 1.89 0.08%
Dow 20,858.10 2.46 0.01%
Dow in GOLD $s 358.59 1.85 0.52%
Dow in GOLD oz 17.35 0.09 0.52%
Dow in SILVER oz 1,227.45 18.92 1.57%
US Dollar Index 101.80 -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: 1,199.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,223.59 1,238.59 1,238.59
1/2 AE 0.50 617.28 631.59 1,263.18
1/4 AE 0.25 314.63 322.39 1,289.57
1/10 AE 0.10 125.85 131.36 1,313.56
Aust. 100 corona 0.98 1,167.03 1,176.03 1,199.78
British sovereign 0.24 284.50 297.50 1,263.82
French 20 franc 0.19 223.97 229.97 1,231.74
Krugerrand 1.00 1,210.40 1,220.40 1,220.40
Maple Leaf 1.00 1,209.60 1,222.60 1,222.60
1/2 Maple Leaf 0.50 689.77 629.79 1,259.58
1/4 Maple Leaf 0.25 305.90 320.89 1,283.57
1/10 Maple Leaf 0.10 127.16 130.76 1,307.56
Mexican 50 peso 1.21 1,433.22 1,444.22 1,197.83
.9999 bar 1.00 1,199.60 1,211.60 1,211.60
SPOT SILVER: 16.93      
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 11,886.88 12,244.38 17.13
US 40% silver 1/2s 0.30 4,801.13 4,951.13 16.78
100 oz .999 bar 100.00 1,682.50 1,707.50 17.08
10 oz .999 bar 10.00 170.75 175.75 17.58
1 oz .999 round 1.00 17.18 17.48 17.48
Am Eagle, 200 oz Min 1.00 17.93 19.18 19.18
SPOT PLATINUM: 935.90      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 930.90 975.90 975.90
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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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