The Moneychanger
Weekly Commentary
Friday, 31 March a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  24-Mar-17 31-Mar-17 Change % Change
Silver, cents/oz. 1,772.00 1,823.50 51.50 2.9
Gold, dollars/oz. 1,248.20 1,247.30 -0.90 -0.1
Gold/silver ratio 70.440 68.401 -2.039 -2.9
Silver/gold ratio 0.0142 0.0146 0.0004 3.0
Dow in Gold Dollars (DIG$) 341.11 342.46 1.35 0.4
Dow in gold ounces 16.50 16.57 0.07 0.4
Dow in Silver ounces 1,162.34 1,133.16 -29.18 -2.5
Dow Industrials 20,596.72 20,663.22 66.50 0.3
S&P500 2,343.98 2,362.72 18.74 0.8
US dollar index 99.57 100.22 0.65 0.7
Platinum 967.20 948.20 -19.00 -2.0
Palladium 815.10 798.15 -16.95 -2.1

Here's a quotation from somebody who ought to know what he's talking about:

"Gold, in the end, is not just competition for the dollar; it is competition for bank deposits, stocks and bonds most particularly during times of economic stress " and that is the source of enduring interest among policymakers." Former Fed Chairman Paul Volcker

The week blew hot & cold out of both sides of its mouth for precious metals, gold down 90¢ & silver up 2.9%. Stocks tried to rally but didn't, & a Fed "spokesman" torpedoed the dollar's rise today. Platinum & palladium took a whipping with barbed wire.

Time to 'fess up: I was wrong. I thought stocks would have shown a huge downdraft by end-March, but they didn't. Well, if you count that all time high on 1 March & the decline ever since as a "downdraft," which it surely is, then maybe I wasn't shooting so far off the mark after all. Look at the Dow chart, http://schrts.co/Q6KUW0 A 2.1% fall counts for something.

Today stocks backed off this week's one-day enthusiasm. Dow fell 65.27 (0.07%) to 20,663.22 while the S&P500 lost 5.4 (0.23%) to 2362.72. Both indices fell to their 50 day moving average this week & bounced up off that. However, both remain in the downtrend of lower highs & lower lows begun on 1 March. S&P500 needs to clear 2,370 (Dow 20,850) to strike off the chains of that downtrend.

Do y'all get as tired as I do watching the Fed play the same old parlor tricks on the public? Whichever way they want to drive the dollar or interest rates, they send out some regional Fed-Head to make a speech to the Frog Jump Economics Association. The press picks it up & markets panic as investors try to align themselves with the Fed's "direction". What's funny is that the Fed is clueless what direction to go, & operates mostly on an ad hoc basis after the fact. They couldn't pour pea soup out of a boot without instructions printed on the heel.

Anyhow they sent out a Big Gun, Dudley the NY Fed chairman to speechify that there's no hurry to raise interest rates. That knocked down interest rates & hamstrung the US dollar index, which fell to 100.22. On the chart, http://schrts.co/Q6KUW0 you can see that Dudley's timely remarks knocked the dollar index in the head just as it threatened to bust through the 50 day moving average & the downtrend line. 'Pears the Fed don't want the dollar no higher.

Silver shut down Comex 5¢ higher at 1823.5¢ and gold rose $2.30 to $1,247.30.

Look at the bigger picture. Although that is by one cent silver's highest close for the move, silver remains trapped beneath the 1824¢ barrier. Yesterday gold fell under $1,250, and that's as bad for morale as a coffin salesman in a World War I trench. Got to do better & stop this wavering.

Now this hesitation might be no more than a hiccup down wave in a longer up move, but my fondness for worrying won't let me leave it there. If it is a more serious correction Gold needs to hold $1,200 and silver 1740¢. I am still amazed at the utter want of retail demand all over the country. The Trump Jubilee has arrived, it seems, so don't nobody need to buy silver or gold no more, Trump gonna fix everything. He will do the miraculous, drain the Washington swamp using nothing but swamp creatures.

Y'all be patient. Reality has a way of avenging itself on enthusiasm. Gigantic, colossal debt bubble remains everywhere, & eventually that will drive the economy -- maybe into the wall.

Men, I got my face scalded transcribing Susan's diary this morning. I feel like somebody poured boiling hot water all over me. Incredible as it sounds, I MISSED her 60th birthday -- no card, no gift, no brain, no heart. And her detailed description of my character failings exhibited by this oversight, sharp as it was, probably understated my dull-witted unworthiness.

Hear my words, men: wives love to hear that they are loved & appreciated. You can never say, "I love you" too many times to your wife. And NEVER forget her birthday, even if you have to hand draw a card at the last minute..

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
31-Mar-17 Price Change % Change
Gold, $/oz 1,247.30 2.30 0.2
Silver, $/oz 18.24 0.05 0.3
Gold/Silver Ratio 68.401 0.124 0.2
Silver/Gold Ratio 0.0146 0.0000 0.3
Platinum 948.20 -3.40 -0.4
Palladium 798.15 0.65 0.1
S&P 500 2,362.72 -5.34 -0.2
Dow 20,663.22 -65.27 -0.3
Dow in GOLD $s 342.46 -1.68 -0.5
Dow in GOLD oz 16.57 -0.08 -0.5
Dow in SILVER oz 1,133.16 -6.70 -0.6
US Dollar Index 100.22 0.07 0.1
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 1,272.45 1,288.04 1,288.04
1/2 AE 0.50 635.72 658.06 1,316.11
1/4 AE 0.25 320.97 334.64 1,338.57
1/10 AE 0.10 128.39 136.35 1,363.52
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 1,261.22 1,271.22 1,271.22
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 1,492.71 1,503.71 1,247.16
.9999 bar 1.00 1,247.50 1,259.50 1,259.50
SPOT SILVER: 18.24      
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 12,755.60 13,113.10 18.34
US 40% silver 1/2s 0.30 5,189.05 5,339.05 18.10
100 oz .999 bar 100.00 1,814.00 1,839.00 18.39
10 oz .999 bar 10.00 183.90 188.90 18.89
1 oz .999 round 1.00 18.49 18.79 18.79
Am Eagle, 200 oz Min 1.00 19.74 20.39 20.39
SPOT PLATINUM: 948.20      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 943.20 988.20 988.20
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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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