The Moneychanger
Daily Commentary
Wednesday, 21 June a.d. 2017 Browse the commentary archive

I erred yesterday showing y'all the Nasdaq Comp chart instead of the Nasdaq 100 since I was talking about the break in "tech stocks," but truth to tell, the charts look about the same. Y'all will see that looking here, and comparing that chart to this one, Both are candidates for a train wreck.

Stocks backed up again today. Dow lost 57.11 (0.27%) to close at 21,410.03. S&P500 was more lethargic, down 1.42 (0.06%) to 2,435.61.

Here's an mind-tweaking fact-let: the Federal Reserve raised interest rates but it helped not the US dollar index. Today the dollar tucked tail & ran again, scared of that 97.75 hedge. Dollar index lost 20 basis points (0.2%) & settled at 97.22. Despite the dollar's failure to get its motor going, the euro & yen both look like they've topped.

Here's the chart I'm watching most closely, the gold/silver ratio,

Why? Because if it bursts through resistance at 76.5 - 77 it's liable to run up to 84, & that would mean more, lots more, plunging for silver & gold. HOWEVER, I do not expect to see that. Right now I expect the ratio is forming a double top. How can I be so confident? Seasonality, mainly. June-July is the time of the year when silver & gold usually make lows, based on the average of 30 years trading. That implies we are watching the end of the metals' decline, which in turn whispers that this chart must be a double top and not a continuation. Right, right, I'm still biting my nails to the quick, but I'm a worrier.

Behold, the gold chart,

Note that it is bouncing off the 200 day moving average. That would be a fine, fitting place for gold to turn around. Oh, not to run away skyward, merely to settle down, move sideways a while, building steam for a rally beginning in August.

Silver (chart's right here, ) is skidding & sliding down that downtrend line from the July 2016 high. This would be time to stop falling & turn up.

May get my head handed to me on a platter, but I believe silver & gold have virtually no downside left. I have started buying with one and a half hands, saving half a hand for buying more, in case I'm wrong.

A reminder: lowest premium silver right now is my very favorite, US 90% silver coin, most recognizable, most divisible form of silver. Gold coin premiums, even those on American eagles and buffalos, have fallen to the level of Krugerrands, 0.6% - 0.9% over melt at wholesale buy. That makes it cheaper still for y'all to buy gold.

On 21 June 1404 Owain Glyndwr established a Welsh parliament at Machynlleth and was crowned prince of Wales. Y'all know why there's a chronic vowel shortage in Wales & Serbia? Hundreds of years ago a comet passed by the earth causing a frightful wobble. During that wobbling all the consonants slid to Wales & Serbia, and all the vowels to Finland. Fact.

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
21-Jun-17 Price Change % Change
Gold, $/oz 1,243.40 2.40 0.19%
Silver, $/oz 16.36 -0.04 -0.26%
Gold/Silver Ratio 76.026 0.346 0.46%
Silver/Gold Ratio 0.0132 -0.0001 -0.45%
Platinum 926.10 5.50 0.60%
Palladium 894.45 9.30 1.05%
S&P 500 2,435.61 -1.42 -0.06%
Dow 21,410.03 -57.11 -0.27%
Dow in GOLD $s 355.95 -1.64 -0.46%
Dow in GOLD oz 17.22 -0.08 -0.46%
Dow in SILVER oz 1,309.08 -0.05 -0.00%
US Dollar Index 97.22 -0.20 -0.21%
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: 1,245.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,255.06 1,286.81 1,286.81
1/2 AE 0.50 634.49 656.79 1,313.58
1/4 AE 0.25 320.36 334.62 1,338.48
1/10 AE 0.10 130.63 136.34 1,363.38
Aust. 100 corona 0.98 1,209.46 1,218.46 1,243.08
British sovereign 0.24 295.29 308.29 1,309.66
French 20 franc 0.19 230.14 234.14 1,254.07
Krugerrand 1.00 1,252.57 1,262.57 1,262.57
Maple Leaf 1.00 1,250.08 1,269.10 1,269.10
1/2 Maple Leaf 0.50 715.93 653.68 1,307.36
1/4 Maple Leaf 0.25 317.50 333.06 1,332.26
1/10 Maple Leaf 0.10 131.98 135.72 1,357.16
Mexican 50 peso 1.21 1,487.58 1,498.58 1,242.92
.9999 bar 1.00 1,249.46 1,257.10 1,257.10
SPOT SILVER: 16.41      
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 11,479.33 11,765.33 16.46
US 40% silver 1/2s 0.30 4,662.48 4,817.48 16.33
100 oz .999 bar 100.00 1,620.50 1,655.50 16.56
10 oz .999 bar 10.00 165.55 170.55 17.06
1 oz .999 round 1.00 16.21 16.81 16.81
Am Eagle, 200 oz Min 1.00 17.91 19.41 19.41
SPOT PLATINUM: 926.10      
Plat. Platypus 1.00 941.10 971.10 971.10
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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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