The Moneychanger
Weekly Commentary
Thursday, 18 May a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  12-May-17 18-May-17 Change % Change
Silver, cents/oz. 1,634.60 1,662.10 27.50 1.7
Gold, dollars/oz. 1,226.20 1,251.70 25.50 2.1
Gold/silver ratio 75.015 75.308 0.293 0.4
Silver/gold ratio 0.0133 0.0133 -0.0001 -0.4
Dow in Gold Dollars (DIG$) 352.28 341.25 -11.03 -3.1
Dow in gold ounces 17.04 16.51 -0.53 -3.1
Dow in Silver ounces 1,278.39 1,243.19 -35.21 -2.8
Dow Industrials 20,896.61 20,663.02 -233.59 -1.1
S&P500 2,390.90 2,365.72 -25.18 -1.1
US dollar index 99.19 97.92 -1.27 -1.3
Platinum 915.00 934.30 19.30 2.1
Palladium 803.35 765.30 -38.05 -4.7

I won't be in the office tomorrow so offer y'all a weekly summary a day early.

It was one hard week for stocks & the scrofulous US dollar, and a fine week for silver & gold. Platinum is advancing, but palladium is falling off a cliff.

After losing 373 points yesterday, the Dow predictably bounced up today, 56.09 (0.27%) to 20,663.02. S&P500also recovered a little, up 8.69 (0.37%) to 2,365.72. Chart,

The fall ain't over by a long shot, but much as it may surprise y'all to hear it, I still anticipate later in the year to see stocks make one last gasp rally. This fall, however, should reach that uprising trendline about 2,325 or could even fall to the 200 Day Moving Average, now at 2,256. Market proverb says of stocks, "Sell in May and go away." Looks like this is one of those years.

Just to keep it in your mind, it appears that the long-suffering Dow in Gold has at last made good on so many threats and turned down. Please look at the chart,

That peak in December 2016 twinned with a peak in December 2017, but the Trump rally in stocks and gold's weakness kept teasing us with lower highs in the Dow in Gold. Now thrice ("Thrice is the charm") hath the DiG bounced off that upper range line. Now it is below the 20 & 500 DMAs, so momentum has turned down, but it really must drop through that bottom range boundary and the 200 DMA (15.70) to confirm sure, certain, & unarguably.

For reasons known only to, whose service is usually impeccable, the dollar index chart is not updating until after 6:00 p.m. my time, and I flat ain't willing to wait that long today. My grandson Arthur Miles Sanders is one year old today, and I have to attend his birthday supper.

Anyway, this dollar index chart here, shows only trading through yesterday. Dollar index rose 46 basis points (0.47%) today to 97.92, so just fill today's trading in with your mind's eye (or write on your computer screen with a Sharpie). What I want y'all to note is that the dollar index has broken that bottom support line for what-might-be a bullish pennant. Today it traded back up to that line, but 'twill make no meaningful progress until it crosses ABOVE that line. Point is, the dollar index, Parasite Upon The Nations, is on the chasm's edge of breaking down.

Comex gold backed off $5.80 (0.5%) to $1,251.70. Comex silver lurched 23.1¢ (1.4%) to close down at 1662.1¢.

That ain't nearabout all the story. Gold hit $1,285 about 9:00 and kept on falling the rest of the day. It lost another $5 in the aftermarket. Gold may have shot its wad, but I don't think so. The five day chart makes me think we have seen only the first leg up and will witness a correction for two or three days. That conclusion is predicated on the expectation gold does not sink much below its 50 DMA ($1,248.75). Chart's here,

Five day silver chart here, makes plain silver's move up peaked just above 1700¢ and we will see a correction there for a few days, too. The daily chart here, shows that silver caught at the green uptrend line from the December 2015 low. That would be a good stopping point.

Before I go, look at the platinum chart,

Platinum had a rotten day today and wast urned back at the 50 DMA and the downtrend line, BUT notice that it broke the main uptrend line but managed to scrabble and scramble back up over that line. Probably has made its low.

Palladium, on the other hand, is sinking, as this chart illustrates, It made a nine-nmonth rising wedge and fell out of that three days ago. Now it has stopped at the lower trading channel (and uptrend) line, but I don't reckon that will hld it. Should trade down at least to the 200 DMA at $730 if not to $680.

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
18-May-17 Price Change % Change
Gold, $/oz 1,251.70 -5.80 -0.5
Silver, $/oz 16.62 -0.23 -1.4
Gold/Silver Ratio 75.308 -0.338 -0.4
Silver/Gold Ratio 0.0133 -0.0002 -1.4
Platinum 934.30 -9.30 -1.0
Palladium 765.30 -20.85 -2.7
S&P 500 2,365.72 8.69 0.4
Dow 20,663.02 56.09 0.3
Dow in GOLD $s 341.25 2.53 0.7
Dow in GOLD oz 16.51 0.12 0.7
Dow in SILVER oz 1,243.19 20.37 1.7
US Dollar Index 97.92 0.46 0.5
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SPOT GOLD: 1,246.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,261.56 1,271.56 1,271.56
1/2 AE 0.50 629.03 657.58 1,315.16
1/4 AE 0.25 314.51 334.40 1,337.60
1/10 AE 0.10 125.81 136.25 1,362.53
Aust. 100 corona 0.98 1,210.92 1,219.92 1,244.56
British sovereign 0.24 293.45 298.45 1,267.84
French 20 franc 0.19 232.74 236.74 1,268.02
Krugerrand 1.00 1,254.08 1,264.08 1,264.08
Maple Leaf 1.00 1,256.60 1,267.60 1,267.60
1/2 Maple Leaf 0.50 716.80 654.47 1,308.93
1/4 Maple Leaf 0.25 317.88 333.47 1,333.86
1/10 Maple Leaf 0.10 132.14 135.88 1,358.79
Mexican 50 peso 1.21 1,489.37 1,500.37 1,244.40
.9999 bar 1.00 1,244.60 1,257.60 1,257.60
SPOT SILVER: 16.54      
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 11,754.60 12,040.60 16.84
US 40% silver 1/2s 0.30 4,687.55 4,837.55 16.40
100 oz .999 bar 100.00 1,634.00 1,679.00 16.79
10 oz .999 bar 10.00 163.40 168.90 16.89
1 oz .999 round 1.00 16.34 16.94 16.94
Am Eagle, 200 oz Min 1.00 17.69 18.69 18.69
SPOT PLATINUM: 934.30      
Platinum Platypus 1.00 944.30 957.30 957.30
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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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