The Moneychanger
Daily Commentary
Tuesday, 14 March a.d. 2017 Browse the commentary archive

Sorry I missed y'all yesterday; I had to run up to Nashville. Nothing big happened anyway, since markets are holding their breath waiting for the pale vocal exudate from the Fed tomorrow.

Stocks are being held up by their 20 DMA. Dow lost 44.11 (0.21%) today to 20,387.37. S&P500 dropped 8.02 (0.34%) to 2,365.95. Not much telling which way the market will taken the Fed's likely announcement of a discount rate rise tomorrow. However, I am still clinging to the notion that stocks will implode before March endeth.

US dollar index jumped today 42 basis points (0.42%) to 102.7. I wouldn't want to be holding the long side of that deal. The Fed is nearly universally expected to raise its discount rate 1/4 of 1% tomorrow. Chicken-livered as they are, there's little chance the Fed would raise it 1/2 of 1% -- they're afraid to shake things up, or to disappoint expectations (talk about a recipe for Utter Misery in Living!).

The news or consummation of the long awaited rumor ought to drive the dollar lower, not higher, notwithstanding today's enthusiastic rise. But it's a currency, and central bank criminals manipulate currencies.

West Texas Intermediate Crude has unarguably broken out earthward. Chart's here,

Mark that WTIC has broken both the uptrend line from the February 2016 low and the 200 Day Moving Average. This ain't a recipe for higher prices. One can easily imagine a fall to $35.

Daily the torture mounts with silver & gold, yet hope lurketh in the details. Today gold shaved off 50¢ to $1,201.90. Silver smudged off 4.7¢ to 1688.8¢

Take a look at the silver chart,

It shows no firm evidence of turning up, but does whisper a few comforting words.

The RSI has reached to oversold territory & trend sideways. Volume has petered out in the last four days and silver has moved sideways. MACD histogram has flattened. But so far those whispers are all I hear. Liable to be some shoutin' tomorrow after the FOMC announcement. I would imagine the looming interest rate announcement is holding silver down, and the news would remove that pressure.

Gold chart lives here,

This gold chart doesn't especially thrill me, either. RSI has leveled off & left off dropping. Volume has dropped, etc., but at a minimum bold needs to re-conquer that 50 DMA. As with silver, I would expect the actual news of a discount rate rise would take the depression of a pending rise off gold.

On 14 March 1900 the almighty US government enacted the Gold Standard Act which purportedly put the US on a gold standard. I say purportedly because the US constitution had authorized the congress to set standards and weights & measures, which it did with the Coinage Act of 1792. That act made the dollar of silver (0.7734 oz) the standard coin of the United States. Clearly congress could not subsequently change a standard, any more than they could decree all yardsticks be reduced to 33 inches to make short people feel taller. Never mind, the banks won over the people, and a so-called monometallic gold standard was introduced, which was only a half way house to a completely imaginary fiat dollar of bank credit.

I get to feelin' a mite liverish even thinking about the monetary sins & crimes of the US government.

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
14-Mar-17 Price Change % Change
Gold, $/oz 1,201.90 -0.50 -0.04%
Silver, $/oz 16.89 -0.05 -0.28%
Gold/Silver Ratio 71.169 0.168 0.24%
Silver/Gold Ratio 0.0141 -0.0000 -0.24%
Platinum 937.70 -12.30 -1.29%
Palladium 742.65 -2.20 -0.30%
S&P 500 2,365.95 -12.65 -0.53%
Dow 20,837.37 -44.11 -0.21%
Dow in GOLD $s 358.39 -0.61 -0.17%
Dow in GOLD oz 17.34 -0.03 -0.17%
Dow in SILVER oz 1,233.86 0.82 0.07%
US Dollar Index 101.67 0.42 0.41%
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SPOT GOLD: 1,197.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,224.15 1,236.73 1,236.73
1/2 AE 0.50 616.35 630.64 1,261.28
1/4 AE 0.25 314.16 321.91 1,287.64
1/10 AE 0.10 125.66 131.16 1,311.59
Aust. 100 corona 0.98 1,165.28 1,174.28 1,198.00
British sovereign 0.24 284.08 297.08 1,262.01
French 20 franc 0.19 223.63 229.63 1,229.94
Krugerrand 1.00 1,209.78 1,219.78 1,219.78
Maple Leaf 1.00 1,207.80 1,220.80 1,220.80
1/2 Maple Leaf 0.50 688.74 628.85 1,257.69
1/4 Maple Leaf 0.25 305.44 320.41 1,281.65
1/10 Maple Leaf 0.10 126.97 130.56 1,305.60
Mexican 50 peso 1.21 1,433.24 1,444.24 1,197.84
.9999 bar 1.00 1,197.80 1,209.80 1,209.80
SPOT SILVER: 16.85      
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 11,865.43 12,222.93 17.10
US 40% silver 1/2s 0.30 4,777.53 4,927.53 16.70
100 oz .999 bar 100.00 1,674.50 1,699.50 17.00
10 oz .999 bar 10.00 169.95 174.95 17.50
1 oz .999 round 1.00 17.10 17.40 17.40
Am Eagle, 200 oz Min 1.00 17.85 19.10 19.10
SPOT PLATINUM: 937.70      
Plat. Platypus 1.00 932.70 977.70 977.70
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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.
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  • 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.
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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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