The Moneychanger
Weekly Commentary
Friday, 24 March a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  17-Mar-17 24-Mar-17 Change % Change
Silver, cents/oz. 1,737.90 1,772.00 34.10 2.0
Gold, dollars/oz. 1,229.80 1,248.20 18.40 1.5
Gold/silver ratio 70.764 70.440 -0.323 -0.5
Silver/gold ratio 0.0141 0.0142 0.0001 0.5
Dow in Gold Dollars (DIG$) 351.56 341.11 -10.45 -3.0
Dow in gold ounces 17.01 16.50 -0.51 -3.0
Dow in Silver ounces 1,203.44 1,162.34 -41.10 -3.4
Dow Industrials 20,914.62 20,596.72 -317.90 -1.5
S&P500 2,378.25 2,343.98 -34.27 -1.4
US dollar index 101.13 99.57 -1.56 -1.5
Platinum 962.00 967.20 5.20 0.5
Palladium 777.80 815.10 37.30 4.8

Following up on yesterdays warning that "if it sounds too good to be true, it is," tungsten counterfeits have surfaced for: Ten ounce P.A.M.P. gold bars, One ounce P.A.M.P., Perth, Apmex, & Royal Canadian Mint gold bars, and one ounce gold American Eagles. Best way to prevent becoming the disgruntled owner of counterfeit gold is never to buy off EBay, Craigslist, etc. but to buy from reputable, long-established dealers only.

'Twasn't a happy week for stocks, which have fallen for seven of the last seven days & appear due for a thorough clock-cleaning. US Dollar Index has not yet shown any spunk as it teeters on the precipice, but might wake up yet. Silver & gold rose this week, but have been stalled all the same. Palladium is on a tear.

I hate to call the US dollar index down for the count because from nowhere the Nice Government Men can goose it into life. All the same, look at this chart,

The dollar index has all but completed a Head & Shoulders top, save for falling through the neckline into shame, scorn, and ignominy. Yet it hath hovered here just above the 99 neckline, and today gained a magnificent, grandiloquent three (3) basis points to 99.57. With indicators pointing down, the dollar index ought to follow through to the downside. Yet who can know the heart & mind of the Nice Government Men or what plans they might be hatching like adder's eggs? Nature is saying the dollar index ought to tumble.

Over in Europe today the European Criminal Bank -- I'm sorry, I'm sorry, European CENTRAL Bank -- handed out $251 billion in free money to European banks. Yes, yes, 'tis true, & it gets worse (unless you are a bank). Under the ECB's Long Term Refinancing Operation (LTRO) the ECB is making the banks four year loans at zero percent interest (that's right, zero, like a central banker's IQ). In fact, if the banks meet their "lending targets," the ECB will actually pay them for borrowing.

Now I don't know fat meat from bacon, but even I reckon that hot money will flow first into stocks & bonds. It worked, and stops & bonds jumped in Europe & the US, then -- weirdly -- it stopped working. Dow jumped up 100 points but ended the day 60 points lower.

Ooooo. You know, heroin addicts have to keep upping their dosage to get the same level of buzz. Does today mean that the markets have grown so used to central bank liquidity injections that the vein demands more now than the syringe can give? Oooooooo.

Didn't do the euro much good. Rose 0.17% to $1.0803. Yen fell 0.25% to 89.9, but appears to have broken its downtrend.

Stocks today were the Little Engine That Tried But Blew Up Its Boiler. About noon buyers pulled the plug and stocks steadily fell until they reached negative territory. Dow lost 59.86 (0.3%) for a close at 20,596.72. S&P500 shaved off only 1.98 (0.08%) & closed 2,343.98. Both have fallen through Must-Hold levels although they are hovering still. If the 50 DMA not far below doesn't stop their fall, they may out-fall Humpty-Dumpty.

That hovering reminds me of the story about the two old boys who got into a straight razor fight. One slashed at the other's neck and he jumped back and scoffed: "Ha, ha! You missed me!" "You just think I missed you," the other replied, "just wait till you nod your head."

Dow in Gold & Dow in Silver have put in two lower highs and lower lows, and now need only one more lower low to confirm beyond quibble that they have turned down. Charts are here, and here,

The Gold/Bank Stock Index shows which way public confidence is flowing, into stocks or into gold. Chart's right here,

The Trump election launched a rally in bank stocks as all watchers believed Trump would remove regulations off the banks so that they could increase their predations on the American public. They expected higher interest rates as well, which can only be good for banks. So banks stocks roared.

Yea, but look upon this chart. It shows a double bottom in the Gold/Bank Stocks Spread, and four days ago a mighty gap UP. Still must punch through that resistance from the last two tops, but since it is above the 20 & 50 DMAs & indicators point up, we have to expect that will happen soon.

Silver rose 15.7¢ (0.9%) to close Comex at 1772¢. Gold rose $1.30 or 0.1% to $1,248.20 but remains mired beneath $1,250.

Silver, on the other hand, broke through the 1760¢ that had been blocking it. The weekly chart tells me that the 50 week moving average stands at 1785¢ & the 200 week at 1791¢, so silver has a fight on its hands to reach resistance [sic] at 1800. Remember also that for whatever cosmic reason, silver tends to outperform gold when stocks are rising, and vice versa, so that tilts the path uphill a little more.

Gold got slapped winded when it tried to step across $1,250 today. It was so ashamed it fell straight back. The 200 day moving average looms above at $1,263, and that offers resistance. Also, the 50 month moving average lies at $1,254. No doubt those are keeping a lid on gold. However, it lacks buyers. Retail gold & silver business has been lousy since Trump was elected, and I check all over the country. Of course, market are pendulums, & swing from somnolent to ecstatic in a heart beat, so the next move ought to be frenzied.

On 24 March 1603 Scottish King James VI became King James I of England, and a nasty piece of work he was. Once he got out of Scotland where they wouldn't abide his nonsense, he began promoting the divine right of kings, which the English didn't like much better. He wanted to get rid of the most popular Bible translation, the Geneva Bible, because he thought the marginal notes too strongly opposed the divine right of kings & tyranny. He was probably right. He hired a new translation, the Authorized or King James Version, beginning in 1604 but not completed until 1611. It needed another 40 years to displace the Geneva Bible.

The translators were all academic, very learned men, and wrote in an elevated style. When you compare the KJV to the Geneva, you'll see they pretty well followed the Geneva. In fact, the Geneva sounds more modern in our ears although it was published in 1560. All the same, the KJV's majestic style entered into the English language as no other book but the Book of Common Prayer. It echoes everywhere in our language.

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
24-Mar-17 Price Change % Change
Gold, $/oz 1,248.20 1.30 0.1
Silver, $/oz 17.72 0.16 0.9
Gold/Silver Ratio 70.440 0.067 0.1
Silver/Gold Ratio 0.0142 0.0001 0.9
Platinum 967.20 4.10 0.4
Palladium 815.10 13.20 1.6
S&P 500 2,343.98 -1.98 -0.1
Dow 20,596.72 -59.86 -0.3
Dow in GOLD $s 341.11 -1.31 -0.4
Dow in GOLD oz 16.50 -0.06 -0.4
Dow in SILVER oz 1,162.34 -13.80 -1.2
US Dollar Index 99.57 0.03 0.0
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SPOT GOLD: 1,244.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,270.84 1,285.15 1,285.15
1/2 AE 0.50 634.29 656.58 1,313.16
1/4 AE 0.25 320.25 333.89 1,335.56
1/10 AE 0.10 128.10 136.05 1,360.46
Aust. 100 corona 0.98 1,210.90 1,219.90 1,244.55
British sovereign 0.24 295.20 308.20 1,309.26
French 20 franc 0.19 232.39 238.39 1,276.84
Krugerrand 1.00 1,257.15 1,267.15 1,267.15
Maple Leaf 1.00 1,254.70 1,267.70 1,267.70
1/2 Maple Leaf 0.50 715.70 653.47 1,306.94
1/4 Maple Leaf 0.25 317.40 332.96 1,331.83
1/10 Maple Leaf 0.10 131.94 135.67 1,356.72
Mexican 50 peso 1.21 1,487.10 1,498.10 1,242.52
.9999 bar 1.00 1,244.70 1,256.70 1,256.70
SPOT SILVER: 17.74      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 25.25 33.01
VG+ Peace dollar 0.77 15.50 18.00 23.53
90% silver coin bags 0.72 12,394.53 12,752.03 17.84
US 40% silver 1/2s 0.30 5,040.08 5,190.08 17.59
100 oz .999 bar 100.00 1,763.50 1,788.50 17.89
10 oz .999 bar 10.00 178.85 183.85 18.39
1 oz .999 round 1.00 17.99 18.29 18.29
Am Eagle, 200 oz Min 1.00 19.24 19.89 19.89
SPOT PLATINUM: 967.20      
Platinum Platypus 1.00 962.20 1,007.20 1,007.20
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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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