The Moneychanger
Daily Commentary
Wednesday, 3 May a.d. 2017 Browse the commentary archive

The outrageous stupidity of the ruling monetary & financial system makes me so mad sometimes I can't do anything but spit and splutter. Just the words "Federal Reserve" or "Pudgy Wicked Witch of the East" sets my nerves to itchin'. Pray explain to me how the droolings & dribblings of a clot of academics who have never even successfully run a hot dog stand could instantly change the price, let alone the value, of a bond or stock or gold or silver.

It all just goes against nature, not to mention common sense.

But that's what happened anyway. The FOMC -- Federal Open Mouth Committee - announced at 2:00 they would not be raising interest rates this meeting. That sent the dollar from 99.1 to 99.4, a big step. But wait -- by what screwy logic will NOT raising interest rates make the US dollar MORE valuable? Go ahead, just try to figure it out.

It doesn't, it's just a trigger for speculators to dance between currencies.

So the US dollar index closed up 25 basis points at 99.08, & now is trading at 99.37. Gold closed Comex at 12:30 Eastern at $1,246.4, down $8.70 (0.7%) to $1,246.40. However, the FOMC & the dollar index caught up with gold which shucked ANOTHER $10 in the aftermarket to $1,236.40, down 1.5% from yesterday's Comex close.

Having already had the snot slapped out of it -- 28.2¢ (1.7%) lower at 1648.7¢ on Comex -- sank only about seven cents in the aftermarket, to 1642¢.

Enough of this splenetic fun. Let us think about the charts. Stocks, by the way, barely moved so there's no point talking about them. Still look like they're trying to paint island reversals.

Gold chart may be found right here,

This chart doesn't show the later drop in the aftermarket, but if it did you would see that gold closed below its 50 DMA and then spiked down to the green uptrend line off the December 2016 low. Friends, it's time for SOME rally, even if only a little doomed one. Gold is $10 below its 50% correction point and below its 50 DMA and has hit that uptrend line. It's like my friend Tyrone said about putting down fertilizer, "You put out enough of it and hit'll SOMETHIN' come up." That much support ought to do something

Behold, the silver chart,

Mark how oversold the RSI is! And mark that silver has now touched the red downtrend line from the April 2011 high which it broke up through back when February opened. Lower than the March low. About time to turn around.

It's just a straw in the wind, but the premium on US 90% stiffened just a little today.

This feels like riding one of those insane roller coasters: once you get on, you can't do anything but hold on till the ride ends.

On 3 May 1916 Padraic Pearse and two others were executed for their roles in the Easter Rising to free Ireland from British rule. Three years later, Ireland was independent and those executed as traitors became patriot martyrs.

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
3-May-17 Price Change % Change
Gold, $/oz 1,246.40 -8.70 -0.69%
Silver, $/oz 16.49 -0.28 -1.68%
Gold/Silver Ratio 75.599 0.753 1.01%
Silver/Gold Ratio 0.0132 -0.0001 -1.00%
Platinum 902.00 -21.60 -2.34%
Palladium 799.15 -14.30 -1.76%
S&P 500 2,388.13 -3.04 -0.13%
Dow 20,957.90 8.01 0.04%
Dow in GOLD $s 347.59 2.54 0.74%
Dow in GOLD oz 16.81 0.12 0.74%
Dow in SILVER oz 1,271.18 21.85 1.75%
US Dollar Index 99.08 0.25 0.25%
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: 1,236.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,252.47 1,262.47 1,262.47
1/2 AE 0.50 623.88 652.20 1,304.40
1/4 AE 0.25 311.94 331.66 1,326.66
1/10 AE 0.10 124.78 135.14 1,351.39
Aust. 100 corona 0.98 1,201.01 1,210.01 1,234.45
British sovereign 0.24 291.05 296.05 1,257.64
French 20 franc 0.19 230.84 234.84 1,257.82
Krugerrand 1.00 1,242.58 1,252.58 1,252.58
Maple Leaf 1.00 1,246.40 1,257.40 1,257.40
1/2 Maple Leaf 0.50 710.93 649.11 1,298.22
1/4 Maple Leaf 0.25 315.28 330.74 1,322.95
1/10 Maple Leaf 0.10 131.06 134.77 1,347.68
Mexican 50 peso 1.21 1,477.19 1,488.19 1,234.29
.9999 bar 1.00 1,234.40 1,247.40 1,247.40
SPOT SILVER: 16.42      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 25.50 33.33
VG+ Peace dollar 0.77 15.00 18.00 23.53
90% silver coin bags 0.72 11,490.05 11,847.55 16.57
US 40% silver 1/2s 0.30 4,652.15 4,802.15 16.28
100 oz .999 bar 100.00 1,622.00 1,667.00 16.67
10 oz .999 bar 10.00 162.20 167.70 16.77
1 oz .999 round 1.00 16.22 16.82 16.82
Am Eagle, 200 oz Min 1.00 17.57 18.57 18.57
SPOT PLATINUM: 902.00      
Plat. Platypus 1.00 912.00 925.00 925.00
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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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