The Moneychanger
Daily Commentary
Tuesday, 11 April a.d. 2017 Browse the commentary archive

Folks are all stirred up about the US throwing missiles into Syria & sending a fleet to the the North Korean coast, & the possibility someone other than an EU globalist might win the 23 April French presidential election. That's got 'em buying gold and (believe it or not) yen as safe havens. Y'all already know that I don't trust these "global unrest" spurts in the gold market. Usually as soon as the news sputters out, gold's price does, too.

Here's the gold chart, http://schrts.co/Jfwkob

Gold's performance Friday was terrible, with a push to a new intraday high at $1,273.30 but a close plumb at the day's low. Monday gold sank $3.20 but closed above $1,250 at $1,251.10. Silver fainted, down 23.6¢ (1.3%) to 1789.4¢.

What a difference a fleet deployment makes! Today gold leapt $20.10 (1.6%) to its highest close for the move at $1,271.20 (& an intraday high at $1,275.90). Seen in isolation, that looks very good: above the 200 day moving average, above the uptrend line & undoing Monday's sloppy performance. However, silver didn't co-operate with a new high, and in fact remains trapped below the critical 1850¢ mark.

Silver chart is right here, http://schrts.co/o96FnV

Silver's momentum points more down than up. Sure, it closed above the 200 DMA but has already walked through the established uptrend line.

How would metals confirm this rally is more than a flash in the pan? Silver needs to clear 1850¢ for starters. Gold needs to crank up tomorrow and run for $1,306.

Now look at the gold/silver ratio chart, http://schrts.co/kh9gOy

The gold/silver ratio chart may be the best thing metals have going for them. Notice it made a breakout up thru the downtrend line AND the 200 DMA three days ago, but today collapsed & left that looking like a false breakout. The Ratio has returned underneath the 200 DMA and 50 DMA and fallen through the downtrend line. A falling ratio bodes well for metals usually.

Gold's future is tied hand & neck to the US dollar index. Ignore for a moment the folks selling dollars because they think the US empire is about to trigger a nuclear war & just view the chart. Yesterday the dollar index challenged the downtrend from 1 January & was slapped back. Failed there. Today it fell another 30 basis points (0.35) to 100.65, nearly on top of the 50 DMA (100.63).

We've been watching a head & shoulders top form in the dollar index, but this latest rise has threatened to negate that H&S. That would ground a dollar rally to something near 107. So far, the dollar index has not crossed any red line that says it will rally or collapse. However, if the weakness arose from fear-sellers, it will pass as their buying strength will pass from gold.

Here's the S&P500 chart, http://schrts.co/vtdPMb

Hurts to look at it. Today the Dow peeled off 6.72 (0.03%) to 20,651.30 while the S&P500 crawfished 3.38 (0.14%) to 2,353.78. Now glance at the chart. Both indices sliced into their 50 day moving averages, which have acted as a safety net till now. The 20 & 50 day moving averages and the nose of the triangle will soon squeeze stocks up or down, & momentum points down.

I'm kind of quiet today because today marks six months since my wife Susan passed safely into Jesus' arms. More than that, tomorrow, 12 April, would have been her 70th birthday. Susan was forever planning & organizing parties, particularly birthday parties. Me, I can hardly remember my own birthday -- I think it's in May -- and by nature I set such little store on birthdays that Susan must often have felt like choking me. She never did, but I probably deserved it. Susan was one big, long celebration. I am not at all ashamed to confess how much I miss her. Husbands, love your wives!

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
7-Apr-17 Price Change % Change
Gold, $/oz 1,254.30 4.00 0.32%
Silver, $/oz 18.13 -0.10 -0.52%
Gold/Silver Ratio 69.184 0.580 0.85%
Silver/Gold Ratio 0.0145 -0.0001 -0.84%
Platinum 959.00 28.40 3.05%
Palladium 803.55 13.10 1.66%
S&P 500 2,355.54 -12.65 -0.53%
Dow 20,656.50 -6.85 -0.03%
Dow in GOLD $s 340.43 -1.20 -0.35%
Dow in GOLD oz 16.47 -0.06 -0.35%
Dow in SILVER oz 1,139.35 5.56 0.49%
US Dollar Index 101.12 0.55 0.55%
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: 1,254.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,280.54 1,294.96 1,294.96
1/2 AE 0.50 639.13 661.59 1,323.18
1/4 AE 0.25 322.70 336.44 1,345.76
1/10 AE 0.10 129.08 137.08 1,370.84
Aust. 100 corona 0.98 1,220.15 1,229.15 1,253.98
British sovereign 0.24 297.45 310.45 1,318.83
French 20 franc 0.19 234.16 240.16 1,286.34
Krugerrand 1.00 1,265.49 1,275.49 1,275.49
Maple Leaf 1.00 1,264.20 1,277.20 1,277.20
1/2 Maple Leaf 0.50 721.17 658.46 1,316.91
1/4 Maple Leaf 0.25 319.82 335.50 1,341.99
1/10 Maple Leaf 0.10 132.95 136.71 1,367.08
Mexican 50 peso 1.21 1,500.72 1,511.72 1,253.81
.9999 bar 1.00 1,254.20 1,266.20 1,266.20
SPOT SILVER: 18.04      
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 12,541.10 12,898.60 18.04
US 40% silver 1/2s 0.30 5,130.05 5,280.05 17.90
100 oz .999 bar 100.00 1,794.00 1,819.00 18.19
10 oz .999 bar 10.00 181.90 186.90 18.69
1 oz .999 round 1.00 18.29 18.59 18.59
Am Eagle, 200 oz Min 1.00 19.54 20.19 20.19
SPOT PLATINUM: 959.00      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 954.00 999.00 999.00
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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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