The Moneychanger
Daily Commentary
Tuesday, 4 April a.d. 2017 Browse the commentary archive

Silver & gold rose today, but it's tough to get too excited, for reasons I'll make plain.

The US dollar index has stalled under its 50 DMA (100.59), as you can see here,

Dollar index today closed at 100.45, up a teensy six basis points, & if it can conquer that 50 DMA it has a chance to rally much further, even above that last 102.27 high, and bust that supposed head & shoulders top wide open. Momentum indicators favor higher prices, but only in a faint whisper. Still could go either way, up or down, & isn't giving much clue which.

The 50 day moving average is also holding up stocks. S&P500 chart's here,

Technically stocks are locked in a short term downtrend, and have been since 1 March. Indicators aren't saying much at all. Any close below that 50 DMA would send panic through the rats in the hold & push them squeaking down the ropes to shore.

Comex silver rose 11.1¢ (0.6%) to 1830.2¢ while gold rose $4.20 (0.3%) to $1,255.

Y'all go look at this gold chart,

Why am I so skeptical? Because gold failed 5 days ago at $1,261.40, which matched the February high at $1,264.30. Now it is assaying yet again to storm that barrier. High today came at $1,263.70, nearly $10 higher than yesterday's close, but it just couldn't maintain its grip there and fell back to close only $4.20 higher than yesterday. Yes, yes, it's great, fine, stirring that gold rose today, but it has no more meaning than a tin medal in the Army of Lichtenstein UNLESS gold can fight through that $1,265 blockade.

Now look at silver's chart,

It's similar to gold's, but the high came at end-February at 1854¢. Silver has been repeatedly skunked even drawing near that 1850¢ mark. Today's high was 1843¢. Encouraging is silver's position above all its moving averages, especially its 200 DMA, but it won't really do anything worth talking about until it leaves that 1850¢ in the rear view mirror.

Retail demand is lousy. Premium on US 90% fell today again to zero. I saw one wholesaler offering the once-proud Mint State 63 St. Gaudens double eagles at 5.25% over melt, a coin that once carried a 100% premium over melt. Retail demand may not drive the market, but it certainly is a symptom of all demand.

So here I sit, waiting for silver & gold to prove themselves. I'm all kinds of patient, but I am beginning to fret a bit.

On 4 April 1968 I was working 3 to 11 at the St. Joseph Hospital in Memphis. I had been married about three months. I was in the lounge upstairs when another floor orderly came running in saying Martin Luther King was in the emergency room, shot. I didn't believe him but took the elevator to see for myself. Whoops, couldn't get off the elevator at the emergency room floor, as two gigantic policemen with riot clubs discouraged exiting. They locked down Memphis and none of the hospital employees could go home that night.

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
4-Apr-17 Price Change % Change
Gold, $/oz 1,255.00 4.20 0.34%
Silver, $/oz 18.30 0.11 0.61%
Gold/Silver Ratio 68.572 -0.188 -0.27%
Silver/Gold Ratio 0.0146 0.0000 0.27%
Platinum 961.30 6.60 0.69%
Palladium 798.15 4.40 0.55%
S&P 500 2,360.16 -12.65 -0.53%
Dow 20,689.18 38.97 0.19%
Dow in GOLD $s 340.78 -0.50 -0.15%
Dow in GOLD oz 16.49 -0.02 -0.15%
Dow in SILVER oz 1,130.43 -4.76 -0.42%
US Dollar Index 100.45 0.06 0.06%
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: 1,254.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,279.49 1,295.17 1,295.17
1/2 AE 0.50 639.23 661.70 1,323.39
1/4 AE 0.25 322.75 336.49 1,345.97
1/10 AE 0.10 129.10 137.11 1,371.06
Aust. 100 corona 0.98 1,220.34 1,229.34 1,254.17
British sovereign 0.24 297.50 310.50 1,319.03
French 20 franc 0.19 234.20 240.20 1,286.54
Krugerrand 1.00 1,268.20 1,278.20 1,278.20
Maple Leaf 1.00 1,264.40 1,277.40 1,277.40
1/2 Maple Leaf 0.50 721.28 658.56 1,317.12
1/4 Maple Leaf 0.25 319.87 335.55 1,342.21
1/10 Maple Leaf 0.10 132.97 136.73 1,367.30
Mexican 50 peso 1.21 1,500.96 1,511.96 1,254.01
.9999 bar 1.00 1,254.40 1,266.40 1,266.40
SPOT SILVER: 18.29      
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 12,716.28 13,073.78 18.29
US 40% silver 1/2s 0.30 5,202.33 5,352.33 18.14
100 oz .999 bar 100.00 1,818.50 1,843.50 18.44
10 oz .999 bar 10.00 184.35 189.35 18.94
1 oz .999 round 1.00 18.54 18.84 18.84
Am Eagle, 200 oz Min 1.00 19.79 20.44 20.44
SPOT PLATINUM: 961.30      
Plat. Platypus 1.00 956.30 1,001.30 1,001.30
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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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