The Moneychanger
Weekly Commentary
Friday, 30 June a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  23-Jun-17 30-Jun-17 Change % Change
Silver, cents/oz. 1,662.80 1,656.80 -6.00 -0.4
Gold, dollars/oz. 1,256.20 1,240.70 -15.50 -1.2
Gold/silver ratio 75.547 74.885 -0.662 -0.9
Silver/gold ratio 0.0132 0.0134 0.0001 0.9
Dow in Gold Dollars (DIG$) 352.07 355.73 3.66 1.0
Dow in gold ounces 17.03 17.21 0.18 1.0
Dow in Silver ounces 1,286.67 1,288.66 1.99 0.2
Dow Industrials 21,394.76 21,350.59 -44.17 -0.2
S&P500 2,438.30 2,423.43 -14.87 -0.6
US dollar index 96.94 95.39 -1.55 -1.6
Platinum 928.50 923.70 -4.80 -0.5
Palladium 874.55 849.00 -25.55 -2.9

WHEW! What a relief! Speaking in London on 27 June Federal Reserve Chairthing Janet Yellen sad, "Would I say there will never, ever be another financial crisis? You know probably that would be going too far, but I do think we are much safer, and I hope that it will not be in our lifetimes and I don't believe it will be."

This is exactly the sort of sound, sober forecast economist Irving Fisher made on 3 September 1929 when he wrote in the New York Times, "Stocks have reached what looks like a permanently high plateau."

I suspect history & mankind will rank Janet's forecast history right up there with Irving Fisher's. After all, it's different this time.

For all the sound and fury and big jumps & falls, every thing ended the week little changed. Gold closed the week 1.2% lower, but remains in its range, just at the bottom. Don't know what in the world is happening with backwardated palladium. July contract is $849, September $836.65. Big shortage of palladium for immediate delivery.

Tea leaf readers and other seers into criminal central bankers' inscrutable ways are suspecting rate rises in other currencies. Heads of the European, Canadian, and UK central banks lately made comments the seers interpreted as foretelling higher rates in those currencies. Central bank lingo calls that "normalizing interest rates" versus suppressing them as they have so long done. Since March the spread between US Treasuries and German and British treasuries has been sliding, & since 26 June, Monday, they've fallen off a cliff.

Y'all will recall that the interest rate spread or difference is the go-wheel of currency exchange rates: higher the rate, higher the currency (gin'rly). As the spread narrows & the dollar offers a relatively lower interest rate, it weakens.

US dollar index has fallen sharply the last four days, and broken through the 96.30 bottom boundary of its trading range. Today the dollar index rose two basis points to 95.39. Y'all can view the chart right here, It appears that head & shoulders top was genuine after all. The red arrow under the neckline shows where it broke done from the H&S, now it has broken recent support. MACD & RSI both point down a while longer.

Take a gander at the 10 year treasury yield chart, Over the last week it has gapped and leapt to the top of the trading channel. Note that this trading channel is lodged over the downtrend line from 2007. Yes, trading above that line IS significan, working toward reversing a 37 year downtrend in interest rates.

Stocks staged two whipsaw hissy fits this week, vaulting one day & puking it all back the next. Look at the S&P500 chart right here,

Today the Dow gained 63.56 (0.03%) to 21,350.59, after losing 158 the day before, and gaining 168 the day before that. Today the S&P500 rose 3.73 (0.15%) to 2,423.43 -- after falling 21 Thursday & rising 21.3 on Wednesday. Whipsaw!

Look at the S&P500 chart. Notice the RSI below 50, very weak, and the downward signaling MACD. Oooo -- look at yesterdays action when it fell clean through support and all the way to the 50 day moving average before it recovered. This nervous whipsawing and breaks like yesterday's promise supremely painful days for stocks, coming soon. (But don't pay no 'tenshun to me -- I sure ain't no Wall Street smarty. Shucks, where I live we don't even have streets, jes' dirt roads.)

Silver & gold posted tiny whipsaws themselves this week, but in such small ranges I can hardly call 'em whipsaws -- just range trading. Today Comex gold skidded $3.50 (0.3%) to $1,240.70. Comex silver gave up a token 1.8¢ (0.1%) to 1656.8¢.

Think about silver first of all. Here's the 4 month chart,

Since May silver has been wheel-spinning up and down. It slid down that downtrend line from the July 2016 high, fell through the uptrend line from the December 2015 low (green), and today reached for the 20 DMA. MACD is turning up, but don't expect any big moves from silver over this seasonal low period. It's possible, just not likely.

On the monthly chart silver is trapped between its 200 Month MA below & 50 Month MA above, but it broke in April up through the downtrend from the 2011 high yet remains below the 200 week moving average (now 1764¢). In other words, silver is making slow but steady progress.

The daily gold chart shown here, depicts gold bouncing up off its 200 day moving average, Indicators suggest sidewise to lower prices. Range today was a measly, soporific $9.00. All this typifies the low interest at seasonal lows. One of the most frustrating parts of my business is human nature: Everybody wants to buy a rising market. When prices are low, nobody wants to buy. I reckon that's one reason so few people make money investing.

On 30 June 1936 Margaret Mitchell's classic novel Gone With The Wind was published. That was before the days when ethnic cleansing began on the South, before the historically ignorant Marxists took over. I grieve as much for the ignorance of the perpetrators of monument removal's ignorance as for the South. They remove the monuments of those most determined to help black slaves. Long before the war at his Mississippi plantations Jefferson Davis set up slave courts and juries for the slaves to learn to govern themselves. During the war Mrs. Davis found an orphaned black boy being beaten in the street by a black woman. She stopped it and adopted the boy, whose name was Jim Limber. When Davis was arrested in 1865, Jim Limber was with the family but Yankee soldiers tore him away screaming and the Davises never saw him again. Robert E. Lee was personally opposed to slavery and freed all his slaves before the war.

Tthe truth of history is disappearing with the monuments, and soon the US will have a nice, clean Stalinized version: without Washington or Jefferson or anybody else.

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
30-Jun-17 Price Change % Change
Gold, $/oz 1,240.70 -3.50 -0.3
Silver, $/oz 16.57 -0.02 -0.1
Gold/Silver Ratio 74.885 -0.210 -0.3
Silver/Gold Ratio 0.0134 -0.0000 -0.1
Platinum 923.70 4.70 0.5
Palladium 871.50 9.45 1.1
S&P 500 2,423.43 3.73 0.2
Dow 21,350.59 63.56 0.3
Dow in GOLD $s 355.73 2.09 0.6
Dow in GOLD oz 17.21 0.10 0.6
Dow in SILVER oz 1,288.66 5.23 0.4
US Dollar Index 95.39 0.02 0.0
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: 1,240.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,252.80 1,281.95 1,281.95
1/2 AE 0.50 651.30 641.91 1,283.81
1/4 AE 0.25 319.15 328.71 1,314.82
1/10 AE 0.10 131.38 134.58 1,345.83
Aust. 100 corona 0.98 1,204.90 1,213.90 1,238.42
British sovereign 0.24 294.18 307.18 1,304.93
French 20 franc 0.19 229.27 233.27 1,249.42
Krugerrand 1.00 1,247.84 1,257.84 1,257.84
Maple Leaf 1.00 1,245.36 1,255.36 1,255.36
1/2 Maple Leaf 0.50 713.23 651.21 1,302.42
1/4 Maple Leaf 0.25 316.30 331.81 1,327.23
1/10 Maple Leaf 0.10 131.48 135.20 1,352.04
Mexican 50 peso 1.21 1,481.97 1,492.97 1,238.26
.9999 bar 1.00 1,242.40 1,250.40 1,250.40
SPOT SILVER: 16.58      
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 11,708.13 16.38
US 40% silver 1/2s 0.30 4,712.63 4,860.63 16.48
100 oz .999 bar 100.00 1,607.50 1,682.50 16.83
10 oz .999 bar 10.00 164.75 168.25 16.83
1 oz .999 round 1.00 16.53 16.93 16.93
Am Eagle, 200 oz Min 1.00 18.23 18.63 18.63
SPOT PLATINUM: 923.70      
Platinum Platypus 1.00 938.70 968.70 968.70
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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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