The Moneychanger
Daily Commentary
Wednesday, 19 April a.d. 2017 Browse the commentary archive

I reckon by now y'all are catching onto the idea that when a market breaks significant support, a price level or a moving average or a trendline, it might rally a bit, but the clock is ticking for follow-through. So stocks 5 days ago broke their uptrend line & plunged through their 50 day moving average, then yesterday followed through with a 113.64 point loss (for the Dow) and today another 188.79 points, to leave the Dow at 20,404.49. This comes after a 183 point rise on Tuesday.

S&P500 today closed 2,338.17, 4.02 (0.17%) lower. The Dow actually suffered the greater loss, 0.58% to 0.17%, and made a new low close for the downmove that began on March 1st. Lo, volume also buildeth, suggesting lower prices to come.

A catalyst for today's fainting spell in stocks was the nearly 4% fall in the oil price. Chart's right here,

Little explanation is needed. Oil simply fell off a cliff, slicing through the 50 & 20 day moving averages. Because April's peak was lower than February's, this chart suggests significantly lower prices a-comin'.

US dollar index rallied 23 basis points (0.24%) to 99.64. Here's the chart,

Today's little rise changes nothing. Test comes at the last low 98.67, but probably before that at the 200 DMA now at 98.87, about congruent with the neckline at 99.

How d'y'all like this roller coaster? Trump came into office, & stocks & the buck took off a-runnin' & gold a-fallin,' and volatility is now the name of the game. Maybe the Millennium hasn't arrived yet after all.

I am left somewhat nervous by today's gold chart,

Gold has been building into a rising wedge and today fell down out of that wedge. I wouldn't be much concerned save for the lethargy gold & silver have both shown in the past two months. Also premiums on all gold coins, including American Eagles, continue to fall. Small but significant.

Today gold on Comex fell $10.30 or 08% to $1,281.40. Silver gave up another 11.5 to 1813.6¢.

Gold has weak support at $1,276, but stronger still at $1,265.

Silver chart is found here,

After double (or triple) tops near 1850¢, silver today poked into its 200 DMA, not running together with the 20 DMA about 1812¢. Should fall further, but how far? I'm' still leaning on that neckline about 1730¢, but the 50 DMA at 1789¢ might catch it, too.

On 19 April 1764 the British Parliament forbade the American colonies to print any more paper money. Odd as it sounds because they had been printing paper money since about 1690 with uniformly ruinous consequences, the colonies resented this prohibition. It became one of the grievances culminating in the American Revolution. It would take another 25 years ruinous experience, and the catastrophic collapse of the Continental currency, to convince the die-hard friends of paper money.

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
19-Apr-17 Price Change % Change
Gold, $/oz 1,281.40 -10.30 -0.80%
Silver, $/oz 18.14 -0.12 -0.63%
Gold/Silver Ratio 70.655 -0.119 -0.17%
Silver/Gold Ratio 0.0142 0.0000 0.17%
Platinum 967.50 -8.30 -0.85%
Palladium 775.45 4.60 0.60%
S&P 500 2,338.17 -12.65 -0.54%
Dow 20,404.49 -118.79 -0.58%
Dow in GOLD $s 329.17 0.72 0.22%
Dow in GOLD oz 15.92 0.04 0.22%
Dow in SILVER oz 1,125.08 0.58 0.05%
US Dollar Index 99.64 0.23 0.23%
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: 1,279.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,298.49 1,320.88 1,320.88
1/2 AE 0.50 651.93 674.83 1,349.66
1/4 AE 0.25 329.16 343.17 1,372.69
1/10 AE 0.10 131.66 139.83 1,398.27
Aust. 100 corona 0.98 1,242.68 1,251.68 1,276.97
British sovereign 0.24 303.41 316.41 1,344.12
French 20 franc 0.19 238.85 244.85 1,311.44
Krugerrand 1.00 1,288.26 1,298.26 1,298.26
Maple Leaf 1.00 1,289.30 1,302.30 1,302.30
1/2 Maple Leaf 0.50 735.60 671.63 1,343.27
1/4 Maple Leaf 0.25 326.22 342.21 1,368.85
1/10 Maple Leaf 0.10 135.61 139.44 1,394.44
Mexican 50 peso 1.21 1,528.44 1,539.44 1,276.80
.9999 bar 1.00 1,279.30 1,291.30 1,291.30
SPOT SILVER: 18.10      
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 12,548.25 12,905.75 18.05
US 40% silver 1/2s 0.30 5,147.75 5,297.75 17.96
100 oz .999 bar 100.00 1,800.00 1,825.00 18.25
10 oz .999 bar 10.00 182.50 187.50 18.75
1 oz .999 round 1.00 18.35 18.65 18.65
Am Eagle, 200 oz Min 1.00 19.60 20.25 20.25
SPOT PLATINUM: 967.50      
Plat. Platypus 1.00 962.50 1,007.50 1,007.50
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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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