The Moneychanger
Weekly Commentary
Friday, 5 May a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  28-Apr-17 5-May-17 Change % Change
Silver, cents/oz. 1,719.10 1,621.50 -97.60 -5.7
Gold, dollars/oz. 1,266.10 1,224.80 -41.30 -3.3
Gold/silver ratio 73.649 75.535 1.886 2.6
Silver/gold ratio 0.0136 0.0132 -0.0003 -2.5
Dow in Gold Dollars (DIG$) 341.90 354.55 12.65 3.7
Dow in gold ounces 16.54 17.15 0.61 3.7
Dow in Silver ounces 1,218.11 1,295.53 77.42 6.4
Dow Industrials 20,940.51 21,006.94 66.43 0.3
S&P500 2,384.20 2,399.29 15.09 0.6
US dollar index 98.90 98.44 -0.46 -0.5
Platinum 946.30 907.70 -38.60 -4.1
Palladium 826.55 812.90 -13.65 -1.7

Silver & gold took about as bad a whipping this week as they ever have. Stocks trod water, but the S&P500 finished today with a new all-time high. US dollar index wants to trade lower. Oil seems to have turned up, as have interest rates.

The West Texas Intermediate Crude chart lurks right here,

WTIC today fell through support at $46.50, traded today to a new low, but then closed higher -- first half of a key reversal -- on strong volume. Should bring on at least a brief rally.

Look at the chart on the 10 year US Treasury note yield,

The 10 year note yield escaped through the ceiling of a downtrend line from 2007 back November 2016, and has traded rangebound ever since. Mid-April it nearly fell through that line, but caught and reversed upward. Now it has traded up to the 50 DMA and today closed just under that mark at 2.352%. Have to say that for now, the market expects higher interest rates. That, of course, ain't great news for gold, but, other things being equal (they never are), it should help the US dollar. So far it hasn't.

Euro closed 41.0996 today, up 0.13%. The French elect a president this weekend. Should the cardboard cutout apparatchik Macron win, the euro will rise along with European shares, but not by much. Should Marine Le Pen win, oh, my! The globalists & Eurocrats will fall into full tailspin, benefitting the US Dollar and gold. Don't amount to a hill of beans because against the entrenched bureaucracy & welfare state in France, how big a change could Le Pen make? Will she eat them or will they eat her?

S&P500 today made a new all time high, rising 9.77 s(0.41%) to 2,399.29. Dow added 55.47 (0.26%) to close at 21,006.94, NOT a new high. S&P chart is right here,

Today's trading wasn't that awe-inspiring really. Made a new intraday high by point-lets. Could be the start of another rise, or could be the completion of that island reversal I've been musing about. Not particularly heartening for stocks that the Dow didn't make a new high, too, but missed by over 100 points.

Conquer your gag reflex 7 consider the US dollar index, fiat money parasite on the world,

It traded through support at 99 and under its 200 day moving average, but as still refused to collapse. Should resolve with a big break, but if Le Pen is elected the dollar will get a new lease on its wretched life.

Gold lost $1.70 to $1,224.80 on Comex while silver lost 2.9¢ to 1621.5¢. These numbers contrast to an aftermarket now higher than when I posted the prices belwo, $1,229.60 & 1638¢. Smart traders who made money shorting silver & gold this week closed out those positions today. Even if this is not the ultimate low of the post July 2016 correction, silver & gold ought to rally from $1,224 & 1620¢. No, that doesn't guarantee that they won't make lower lows this month before they begin moving up in earnest, but I don't expect gold to dip below $1,220 or silver below 1600¢. Maybe the market will hand me my head on a platter, but it won't be the first time.

Look at this Dow in Gold chart,

I have long been thinking it double topped in December 2015 & December 2016, but have begun to suspect it will take one more leg up. That's where my question marks are on the chart. If the Dow in Gold fails at that green resistance line drawn across those descending top, & confirms by falling to a new low, then my suspicions will be foiled. Whatever happens at that green line, though, will clear things up.

I would love to write more to y'all, but have been invited to a movie, Guardians of the Galaxy 2. As y'all might suspect, I would just about as soon go to a ballet (to me incomprehensible) but the folks I am going with, grandchildren all 14 or younger and my son, believe this will be great entertainment. Me, I'm just going for the socializing. And the popcorn.

Y'all enjoy your weekend.

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
5-May-17 Price Change % Change
Gold, $/oz 1,224.80 -1.70 -0.1
Silver, $/oz 16.22 -0.03 -0.2
Gold/Silver Ratio 75.535 -0.103 -0.1
Silver/Gold Ratio 0.0132 -0.0000 -0.2
Platinum 907.70 2.40 0.3
Palladium 812.90 12.40 1.5
S&P 500 2,399.29 9.77 0.4
Dow 21,006.94 55.47 0.3
Dow in GOLD $s 354.55 1.46 0.4
Dow in GOLD oz 17.15 0.07 0.4
Dow in SILVER oz 1,295.53 5.73 0.4
US Dollar Index 98.44 -0.20 -0.2
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SPOT GOLD: 1,227.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,242.95 1,252.95 1,252.95
1/2 AE 0.50 619.43 647.56 1,295.12
1/4 AE 0.25 309.72 329.30 1,317.21
1/10 AE 0.10 123.89 134.18 1,341.77
Aust. 100 corona 0.98 1,192.46 1,201.46 1,225.73
British sovereign 0.24 288.98 293.98 1,248.84
French 20 franc 0.19 229.19 233.19 1,249.02
Krugerrand 1.00 1,233.74 1,243.74 1,243.74
Maple Leaf 1.00 1,237.60 1,248.60 1,248.60
1/2 Maple Leaf 0.50 705.87 644.49 1,288.98
1/4 Maple Leaf 0.25 313.04 328.38 1,313.53
1/10 Maple Leaf 0.10 130.13 133.81 1,338.08
Mexican 50 peso 1.21 1,466.67 1,477.67 1,225.57
.9999 bar 1.00 1,225.60 1,238.60 1,238.60
SPOT SILVER: 16.31      
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 11,590.15 11,947.65 16.71
US 40% silver 1/2s 0.30 4,619.70 4,769.70 16.17
100 oz .999 bar 100.00 1,611.00 1,656.00 16.56
10 oz .999 bar 10.00 161.10 166.60 16.66
1 oz .999 round 1.00 16.11 16.71 16.71
Am Eagle, 200 oz Min 1.00 17.46 18.46 18.46
SPOT PLATINUM: 907.70      
Platinum Platypus 1.00 917.70 930.70 930.70
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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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