The Moneychanger
Daily Commentary
Tuesday, 18 April a.d. 2017 Browse the commentary archive

If y'all called us the last two days you got a message our phone has been disconnected. Durned if it has. We switched telephone providers & we apparently found the nation's most incompetent. It has taken them 2 days so far to fix a little problem, & they have disconnected us to do it. Never mind, the 888-218-926 number still works, and by the grace of God we are still here.

Mess for stocks, mess for the dollar, mess for gold & silver. I reckon the only folks happy are the corporations that make them million dollar missiles.

Start by glancing at the S&P500 chart right here,

After the giddy rises yesterday stocks gave back most of their gains. Dow industrials lost 113.64 to 20,523.28, down 0.55%. S&P500 fell 6.28 (0.29%) to 2,342.19. Four days ago the S&P500 fell through its 50 day moving average, & that has worked like Kryptonite to hold off the index ever since. Nasty alignment on those moving averages, too, with the 20 DMA crossing below the 50 DMA. Volume was greater on today's fall than yesterday's rise. No relief coming soon for stocks.

Look at this US Dollar Index chart,

Whooo. Stepped into a manhole today and wound up nearly at the neckline of that Head & Shoulders top formation, which now is back in play. Will the dollar index stop at the neckline again this time? It's almost running together with the 200 dma (98.85) so the dollar index better catch there or 'twill sink to 97.5.

Comex silver slid 24.2¢ (1.3%) to 1825.1¢; Gold gained $2.30 (0.2%) to close at $1,291.70, a new high for the move.

That's as nasty a non-confirmation as you'll see, Gold makes a new high but silver fails again at 1850¢. Why? Most obvious answer to silver's lagging is that geopolitical crisis is driving gold, but that's really too superficial.

The dollar is tumbling and that buoys gold -- but why not silver?

Remember also that silver tends to move in the same direction as stocks, which right now are NOT moving up.

The retail market is awash in inventory. Even premiums on gold coins are dropping. Wholesale sell side of US 90% is 5¢ an ounce under spot.

And it's always possible that the Nice Government Men are selling silver to drive gold down & make their manipulation dollars stretch. I have no idea that really is happening, but it has before.

But I keep recurring to silver's repeated weakness at 1850¢, & can't shake that out of my mind. Also, I look at the gold chart, & see that wonderfully fatal rising wedge that usually resolves toward gravity. Long & short is that I keep coming back to that weak dollar index plus the wars Trump is trying to start, and that seems to account for gold strength & silver weakness.

I drove over tp Chattanoga yesterday to see my foot surgeon today. I am probably mildly radioactive from all the x-rays, but he discharged me and told me the bones were healing nicely. Inside of my foot looks like the screw department in a hardware store.

I am inexpressibly grateful for your prayers for my recovery. I have a ways to go yet, but the foot ought improve with use & three months time. Thank you, thank you.

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
18-Apr-17 Price Change % Change
Gold, $/oz 1,291.70 2.30 0.18%
Silver, $/oz 18.25 -0.24 -1.31%
Gold/Silver Ratio 70.774 1.051 1.51%
Silver/Gold Ratio 0.0141 -0.0002 -1.48%
Platinum 975.80 -1.00 -0.10%
Palladium 770.85 -6.80 -0.87%
S&P 500 2,349.01 -12.65 -0.54%
Dow 20,523.20 -113.64 -0.55%
Dow in GOLD $s 328.44 -2.41 -0.73%
Dow in GOLD oz 15.89 -0.12 -0.73%
Dow in SILVER oz 1,124.50 8.57 0.77%
US Dollar Index 99.42 -0.77 -0.77%
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: 1,288.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,310.71 1,330.69 1,330.69
1/2 AE 0.50 656.78 679.84 1,359.68
1/4 AE 0.25 331.61 345.72 1,382.88
1/10 AE 0.10 132.64 140.87 1,408.66
Aust. 100 corona 0.98 1,251.91 1,260.91 1,286.38
British sovereign 0.24 305.66 318.66 1,353.69
French 20 franc 0.19 240.62 246.62 1,320.94
Krugerrand 1.00 1,297.82 1,307.82 1,307.82
Maple Leaf 1.00 1,298.80 1,311.80 1,311.80
1/2 Maple Leaf 0.50 741.06 676.62 1,353.24
1/4 Maple Leaf 0.25 328.64 344.75 1,379.02
1/10 Maple Leaf 0.10 136.61 140.48 1,404.79
Mexican 50 peso 1.21 1,539.79 1,550.79 1,286.22
.9999 bar 1.00 1,288.80 1,300.80 1,300.80
SPOT SILVER: 18.26      
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 12,659.08 13,016.58 18.21
US 40% silver 1/2s 0.30 5,193.48 5,343.48 18.11
100 oz .999 bar 100.00 1,815.50 1,840.50 18.41
10 oz .999 bar 10.00 184.05 189.05 18.91
1 oz .999 round 1.00 18.51 18.81 18.81
Am Eagle, 200 oz Min 1.00 19.76 20.41 20.41
SPOT PLATINUM: 975.80      
Plat. Platypus 1.00 970.80 1,015.80 1,015.80
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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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