The Moneychanger
Weekly Commentary
Friday, 9 June a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  2-Jun-17 9-Jun-17 Change % Change
Silver, cents/oz. 1,748.70 1,719.30 -29.40 -1.7
Gold, dollars/oz. 1,276.80 1,268.50 -8.30 -0.7
Gold/silver ratio 73.014 73.780 0.766 1.0
Silver/gold ratio 0.0137 0.0136 -0.0001 -1.0
Dow in Gold Dollars (DIG$) 343.34 346.65 3.32 1.0
Dow in gold ounces 16.61 16.77 0.16 1.0
Dow in Silver ounces 1,212.69 1,237.25 24.56 2.0
Dow Industrials 21,206.29 21,271.97 65.68 0.3
S&P500 2,439.07 2,431.77 -7.30 -0.3
US dollar index 96.67 97.27 0.60 0.6
Platinum 951.70 939.10 -12.60 -1.3
Palladium 837.95 864.60 26.65 3.2

'Twas a right good week for the twisted, stunted, scrofulous, wizened, nasty US dollar, at least it didn't slip all the way down the skids into the nether world. A self-gainsaying week for stocks, and a rotten week for gold and silver.

Y'all go look at the US dollar index chart,

Behold a double bottom (arrows) behold the MACD turned up, and the RSI. Behold resistance at 97.70. Once that's pierced the dollar will scoot upward. Should the dollar index NOT pierce it, should it fail there, OH! How great the pain in Dollarville!

Before we talk about stocks, look at the Dow Industrials chart, and the S&P500,

Somethin' ain't right. Dow Industrials make a new all time high while the S&P500 sinks? Suppose you have a choir, and half the folks are singing one song while the other half sing another? That ain't music. Same way, markets ought to agree with each other, and when they don't, well, maybe the whole choir is about to be fired. Stocks keep struggling to eke out new highs by pointlets, then make jumpy down moves as the S&P500 did today. I may be the only nat'ral born durn Tennessee fool in the world saying it, but a giant crevice, yea, an abyss, stands before stocks. Y'all just wait.

Gold on Comex lost $7.80 (0.6%) to close at $1,268.50. Silver, Metal of the Moon, dropped 19.1¢ (1.1%) to 1719.3¢.

Now were y'all really surprised when gold, knocking on that $1,300 door, got knocked back? Or silver, trying to climb that 1750¢ fence, wouldn't kit the barbed wire at the top? I'm not being a smart aleck, it's just predictable that when a market hits milestone resistance, it will take more than one run at it before it breaks through. Not fatal, just uncomfortable. Pinches. Disappoints.

Let it roll off your back like raindrops off a duck.

Silver's trickier, lets look there first. Chart's here,

Silver hit the 20 Day Moving Average today but will likely move lower. Why, why? RSI broke 50 today (49.30), headed town. MACD is rolling over. Rate of change has been eroding for nearly 2 weeks. All that should pull silver to 1700¢, maybe lower.

Now ponder the gold chart,

If I had to say, and I reckon I do if I' gonna finish this, I'd say gold might drop to $1,250, about the place it will wall into that downtrend line from the July 2016 high. It tunneled up through that line before, and it will be support now.

OK, I'm out here on this limb, hand me the saw. What I see is gold and silver in a stubborn rally, slugging their way through a swamp of tough resistance, and when their feet hit solid ground, they're gonna run like Superman running away from Kryptonite. Sooner, not later. This week's decline is not a major reaction, not a change of trend, just a backing up to take another run at resistance.

Take every cent lower as a better opportunity to buy more silver & gold.

You bald folks better be glad you don't live in Mozambique. Word got out there that bald men's heads are filled with gold, and five of 'em have been hunted down and killed. Y'all wear a hat or a beret or something.

This week I drove down to the other side of Atlanta, east past Stone Mountain. Two years ago on our vacation we stopped at Stone Mountain. Susan and I have driven that road -- here to Chattanooga to Atlanta & past -- so many times I couldn't count. Every bend in the road, every sweep of mountains, every flowing river, every sight is filled with memories of Susan. Mercy, it's so easy to turn away joy and fun by simply staying at the workbench, but Susan wouldn't let me do that. She was forever cooking up some sort of fun, some trip, some excursion, and I don't regret saying YES to a single one of them.

Husbands, rejoice with your wives! Drink the cup, drink every drop of joy, and thank God for it.

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
9-Jun-17 Price Change % Change
Gold, $/oz 1,268.50 -7.80 -0.6
Silver, $/oz 17.19 -0.19 -1.1
Gold/Silver Ratio 73.780 -0.445 -0.6
Silver/Gold Ratio 0.0136 -0.0001 -1.1
Platinum 939.00 2.20 0.2
Palladium 864.60 9.70 1.1
S&P 500 2,431.77 -2.02 -0.1
Dow 21,271.97 89.44 0.4
Dow in GOLD $s 346.65 3.60 1.1
Dow in GOLD oz 16.77 0.17 1.1
Dow in SILVER oz 1,237.25 18.74 1.5
US Dollar Index 97.25 0.36 0.4
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: 1,265.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,275.12 1,307.38 1,307.38
1/2 AE 0.50 644.64 667.29 1,334.58
1/4 AE 0.25 325.48 339.97 1,359.88
1/10 AE 0.10 132.72 138.52 1,385.18
Aust. 100 corona 0.98 1,228.79 1,237.79 1,262.80
British sovereign 0.24 300.01 313.01 1,329.71
French 20 franc 0.19 233.81 237.81 1,273.77
Krugerrand 1.00 1,270.06 1,280.06 1,280.06
Maple Leaf 1.00 1,273.00 1,289.00 1,289.00
1/2 Maple Leaf 0.50 727.38 664.13 1,328.25
1/4 Maple Leaf 0.25 322.58 338.39 1,353.55
1/10 Maple Leaf 0.10 134.09 137.89 1,378.85
Mexican 50 peso 1.21 1,511.36 1,522.36 1,262.63
.9999 bar 1.00 1,269.43 1,277.00 1,277.00
SPOT SILVER: 17.15      
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 11,936.93 12,222.93 17.10
US 40% silver 1/2s 0.30 4,866.03 5,016.03 17.00
100 oz .999 bar 100.00 1,694.50 1,729.50 17.30
10 oz .999 bar 10.00 172.95 177.95 17.80
1 oz .999 round 1.00 16.95 17.55 17.55
Am Eagle, 200 oz Min 1.00 18.65 20.15 20.15
SPOT PLATINUM: 939.00      
Platinum Platypus 1.00 954.00 984.00 984.00
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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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