The Moneychanger
Daily Commentary
Tuesday, 9 May a.d. 2017 Browse the commentary archive

Today the US 10 year Treasury yield bumped up 1.30% to 2.407%. Chart's here, http://schrts.co/jJukkJ

What do it say? Back in December the 10 year yield punched up through the downtrend line from the 2007 high -- portentous. It range-traded (green boundaries) until early April when it broke down out of the range and even fell through that previously conquered downtrend line. But mid-April it caught hold and has rallied vigorously ever since. Today it close well above its 50 day moving average (2.387%). Other things being equal, rising interest rates will drive the US dollar higher and make it more expensive to hold gold or silver, in terms of lost interest income.

Yea, stocks also shall feel the sting of higher rates, made worse by their long addiction to the Fed's bogus suppressed interest rates. Of course, most of this is driven by speculation about the Fed's next move to raise its discount rate. And we all know how predictable that batch of economic midgets is.

Stocks kept spinning wheels today. Dow Industrials lost 36.5 (0.17%) to close at 20,975.78. S&P500 backed off 2.46 (0.1%) to 2,396.92. Helps to see it on a chart, http://schrts.co/vtdPMb

A new all time high yesterday and Friday wrought no followthrough. In fact, the S&P500 broke to a new high for the move, then closed lower. Right, first half of a key reversal. A lower close tomorrow signals lower prices.

Silver reached my target today with a Comex close at 1600.8¢, 19.1¢ (1.2%) lower than yesterday. Gold skidded $11.00 (0.9%) to $1,214.30. After market showed both trading sharply higher, gold at $1,219.50 and silver at 1612.5¢.

Silver's 15 day losing streak has now waxed to 16. The one-day chart shows a little bowl or V-bottom -- possibly, possibly, but it must climb through 1620¢ tomorrow and not drop below that. Here's a daily chart, http://schrts.co/dTkum9

So far silver has managed to stomp its way through every level of support from 1866¢ down. It has now reached the uptrend line from the December 2015 & 2016 lows, and another lateral support at 1564¢. If it doesn't stop at 1600¢, that's the next logical target.

Gold has acted more phlegmatically, but took a knock today. It has reached lateral support from that old bowl lip. Should it breach that, hello $1,184.

I scanned the one day chart. See if this link works, http://bit.ly/2q1vAly

This highlights the low at Comex close & rise in the aftermarket, a sort of blow. But notice it has only climbed roughly to the breakdown point, which I will call $1,224. If today's trading really is a bottom, gold will keep climbing through $1,224 & never fall beneath it again. Otherwise this long downtrend hasn't ended.

Premium on US 90% silver coin is still strengthening -- good. Gold coin premiums remain puny. Not good.

On 9 May 1429 Joan of Arc, the maid, the despised girl with the crazy visions, leading a French army defeated the besieging English at Orleans.

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
9-May-17 Price Change % Change
Gold, $/oz 1,214.30 -11.00 -0.90%
Silver, $/oz 16.01 -0.01 -0.07%
Gold/Silver Ratio 75.856 -0.635 -0.83%
Silver/Gold Ratio 0.0132 0.0001 0.84%
Platinum 898.40 -18.70 -2.04%
Palladium 793.45 -11.95 -1.48%
S&P 500 2,396.92 -2.46 -0.10%
Dow 20,975.78 -36.50 -0.17%
Dow in GOLD $s 357.08 2.59 0.73%
Dow in GOLD oz 17.27 0.13 0.73%
Dow in SILVER oz 1,310.33 -1.38 -0.11%
US Dollar Index 99.44 0.50 0.51%
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: 1,219.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,234.74 1,244.74 1,244.74
1/2 AE 0.50 615.34 643.29 1,286.57
1/4 AE 0.25 307.67 327.13 1,308.52
1/10 AE 0.10 123.07 133.29 1,332.91
Aust. 100 corona 0.98 1,184.60 1,193.60 1,217.71
British sovereign 0.24 287.07 292.07 1,240.74
French 20 franc 0.19 227.68 231.68 1,240.92
Krugerrand 1.00 1,228.04 1,238.04 1,238.04
Maple Leaf 1.00 1,229.50 1,240.50 1,240.50
1/2 Maple Leaf 0.50 701.21 640.24 1,280.48
1/4 Maple Leaf 0.25 310.97 326.22 1,304.87
1/10 Maple Leaf 0.10 129.27 132.93 1,329.26
Mexican 50 peso 1.21 1,457.00 1,468.00 1,217.55
.9999 bar 1.00 1,217.50 1,230.50 1,230.50
SPOT SILVER: 16.13      
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 11,422.13 11,779.63 16.48
US 40% silver 1/2s 0.30 4,565.13 4,715.13 15.98
100 oz .999 bar 100.00 1,592.50 1,637.50 16.38
10 oz .999 bar 10.00 159.25 164.75 16.48
1 oz .999 round 1.00 15.93 16.53 16.53
Am Eagle, 200 oz Min 1.00 17.28 18.28 18.28
SPOT PLATINUM: 898.40      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 908.40 921.40 921.40
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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.
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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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