The Moneychanger
Daily Commentary
Monday, 1 May a.d. 2017 Browse the commentary archive

Mercy, mercy! If this ain't about where gold & silver stop a-fallin', they may plunge plumb thru the earth's crust down to the golf ball center at the earth's core!

US dollar index doesn't tell us a blessed thing, just sits there smug & fat right below the 200 DMA (98.98) Rose today a microscopic 3 basis points to 98.93. No explanation there.

Stocks were too busy gainsaying each other to offer information. Dow fell 27.05 (0.13%) to 20,913.46 but the S&P500 rose 4.13 (0.17%) to 2,388.33. Both make me think of island reversal formations, but 'tis to early to tell. Chart,

Silver crashed 41.1¢ or 2.4% to 1678¢ on Comex. Gold skidded $12.80 (1%) to $1,253.30.

Before I talk about them individually I want to massage this gold/silver ratio chart,

The arrow at today's trading points to a gap. Either that is an exhaustion gap or a runaway gap that means the ratio will trade much higher, to 77 from today's 74.690, or higher. Yet it comes awfully late in the move for a runaway gap. Does anything argue that this might be a peak?

Well, the RSI above is as high as it was at the March 2016 peak. Down under the chart the MACD has exceeded any reading since that March 2016 peak, and the Rate of Change is about the same. All those suggest that if this move should continue, it won't continue much longer.

I don't say that any of this makes any fundamental sense, but the teenagers trading the market herd like lemmings & follow trends, not fundamentals.

Gold. Yes, gold. The five day chart could be construed as a V-bottom based on today's buzzard drop, but too early to say. Daily chart's here,

Daily chart charms my mind & calms my fears, gazing upon that rising uptrend line from the December -- but it only meets the gold graph rising from $1,240 to $1,250 over the next two weeks. Yet it sets a lower limit for any decline.

Now silver, Fractured the uptrend line from Dec. 2016.

RSI (above) has reached oversold, so the decline ought to end soon.

And, like the old line, "At least he don't smell too bad for a country boy" said by one girl about her blind date, the volume on today's decline did not increase. Sold out? MACD could be reaching an oversold limit as well. Five day chart shows today's big decline which MIGHT be the left half of a V, but might not. Can't tell yet.

Bottom line of all this is: This had BETTER be about the end of the metals' decline, or we've got much more pain coming.

Now I don't know nothing about nothing, but I reckon it's an interesting coincidence that April 30 is Walpurgis Night, the night of the witches' big meeting on the Brocken in the Harz Mountains, and dawns on the day international socialism chose to make its yearly celebration, May 1. Oh, watch out now! I am not saying the devil was the first communist, much as it appears that way, given the murder, lies, mayhem, havoc & sorrow communism/socialism has caused. Naw, I'm not saying that. Maybe it was just bad luck & coincidence.

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
1-May-17 Price Change % Change
Gold, $/oz 1,253.30 -12.80 -1.01%
Silver, $/oz 16.78 -0.41 -2.39%
Gold/Silver Ratio 74.690 1.041 1.41%
Silver/Gold Ratio 0.0134 -0.0002 -1.39%
Platinum 929.80 -16.50 -1.74%
Palladium 814.30 -12.25 -1.48%
S&P 500 2,388.33 4.13 0.17%
Dow 20,913.46 -27.05 -0.13%
Dow in GOLD $s 344.94 3.05 0.89%
Dow in GOLD oz 16.69 0.15 0.89%
Dow in SILVER oz 1,246.33 28.22 2.32%
US Dollar Index 98.93 0.03 0.03%
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SPOT GOLD: 1,255.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,271.52 1,281.52 1,281.52
1/2 AE 0.50 633.37 662.12 1,324.24
1/4 AE 0.25 316.69 336.71 1,346.83
1/10 AE 0.10 126.67 137.19 1,371.93
Aust. 100 corona 0.98 1,219.27 1,228.27 1,253.08
British sovereign 0.24 295.47 300.47 1,276.44
French 20 franc 0.19 234.35 238.35 1,276.62
Krugerrand 1.00 1,261.48 1,271.48 1,271.48
Maple Leaf 1.00 1,265.20 1,276.20 1,276.20
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1/10 Maple Leaf 0.10 133.05 136.82 1,368.17
Mexican 50 peso 1.21 1,499.65 1,510.65 1,252.92
.9999 bar 1.00 1,253.20 1,266.20 1,266.20
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SILVER Fine Tr.Oz. BID ASK $/oz
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VG+ Peace dollar 0.77 15.00 18.00 23.53
90% silver coin bags 0.72 11,726.00 12,083.50 16.90
US 40% silver 1/2s 0.30 4,764.25 4,914.25 16.66
100 oz .999 bar 100.00 1,660.00 1,705.00 17.05
10 oz .999 bar 10.00 166.00 171.50 17.15
1 oz .999 round 1.00 16.60 17.20 17.20
Am Eagle, 200 oz Min 1.00 17.95 18.95 18.95
SPOT PLATINUM: 929.80      
Plat. Platypus 1.00 939.80 952.80 952.80
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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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