The Moneychanger
Weekly Commentary
Friday, 14 July a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  7-Jul-17 14-Jul-17 Change % Change
Silver, cents/oz. 1,537.10 1,588.40 51.30 3.3
Gold, dollars/oz. 1,208.60 1,226.60 18.00 1.5
Gold/silver ratio 78.629 77.222 -1.406 -1.8
Silver/gold ratio 0.0127 0.0129 0.0002 1.8
Dow in Gold Dollars (DIG$) 366.27 364.66 -1.61 -0.4
Dow in gold ounces 17.72 17.64 -0.08 -0.4
Dow in Silver ounces 1,393.17 1,362.23 -30.93 -2.2
Dow Industrials 21,414.34 21,637.74 223.40 1.0
S&P500 2,425.18 2,459.27 34.09 1.4
US dollar index 95.79 95.12 -0.67 -0.7
Platinum 901.10 920.90 19.80 2.2
Palladium 843.25 865.75 22.50 2.7

'Twas a hard week on the scabby US dollar index, but a good week for stocks and a better week still for silver (up 3.3%) and gold (up 1.5%).

Here's the US dollar index chart, but only through yesterday. For some reason StockCharts.com is adding the current day too late in the day for me to sit here and wait on. http://schrts.co/OkJ5UT

Makes no difference because y'all have a great imagination, and can easily picture that with today's 64 basis point tumble the dollar ended at 95.12, a new low for the move. Dollar looking sicker.

Interest rates fell based on changed expectations about the Fed raising rates in September. I get so sick of this, the whole world pretending that central bank meddling can help when all of history shows central banks kill economies. Here's the 10 year treasury yield, http://schrts.co/vUJO4G

Yes, it sank today, but notice that it stands above the downtrend line from 2007, & above all three moving averges. All that screames that rates will move higher.

Euro continues to profit from the dollar's malaise. Chart's here, http://schrts.co/HcRUv0 Now the Yen is getting in on the act, and has broken upwards out of its downtrend, http://schrts.co/UuqBFa

The thought that keeps creeping into my mind is, "People are so complacent, so smug!" Some few are making money, while the working class & middle class are sinking out of sight. Absolutely no apprehension that everybody does not make loads of money & live fat, dumb, & happy for most of mankind's history.

Stocks witnessed that complacency, feeding on complacency, when the Dow & S&P500 rose to new all-time highs. Dow rose 84.64 (0.4%) to 21,637.74. Told yall yesterday to expect surprises. This chart, http://schrts.co/Q6KUW0 shows that the Dow broke out upwards through the boundary of the broadening top. S&P500 did not, so it's not clear whether it's a genuine breakout of a one day fluke of entusaism.

Gold on Comex rose $10.40 (0.9%) to $1,226.60 while silver vaulted 24.2¢ (1.6%) to 1588.4¢.

About 10:30 Eastern Time gold gapped up from $1,222 to $1,232 but backed dow to $1,228. Wasn't really the collapse in the US dollar that did it, since that happened two hours earlier. Silver gehaved the same way, gapping from 1580¢ to 1605¢, then bakcing down.

Y'all may wonder why I emphasize gaps so much. It's because a gap, up or down, marks where the market literally runs out of sellers (up) or buyers (down). Nobody is willing to trade at those prices so the market gaps. Geneerally gaps signal great strength (up) or weakness (down).

Today's leap in silver s& gold strengthens the case for calling the 7 July prices the low. Of course, to confirm that silver & gold will have to pass milestones above: 1600¢ & 1625¢ for silver and $1,245 & $1265 for gold.

Here's the daily gold chart, http://schrts.co/jDa8Xy Note that gold early reached its 200 DMA as it broke out upside through the downtrend line.

Right here is silver, http://schrts.co/jDa8Xy Silver punghed into the overhead downtrend line from the 2011 high. So far, so good.

Bottom line? Silver & gold are following their usual seasonal pattern with lows in June or July. Given the longer term uptrend since December 2015, the market is offerig you a very favorable oppportunity to buy metals.

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
14-Jul-17 Price Change % Change
Gold, $/oz 1,226.60 10.40 0.9
Silver, $/oz 15.88 0.24 1.5
Gold/Silver Ratio 77.222 0.643 0.8
Silver/Gold Ratio 0.0129 0.0002 1.5
Platinum 920.90 16.40 1.8
Palladium 865.75 -0.10 -0.0
S&P 500 2,459.27 11.44 0.5
Dow 21,637.74 84.65 0.4
Dow in GOLD $s 364.66 -1.64 -0.4
Dow in GOLD oz 17.64 -0.08 -0.4
Dow in SILVER oz 1,362.23 -15.66 -1.1
US Dollar Index 95.12 -0.64 -0.7
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SPOT GOLD: 1,228.65      
GOLD Fine Tr.Oz. BID ASK $/oz
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British sovereign 0.24 291.39 304.39 1,293.09
French 20 franc 0.19 227.10 231.10 1,237.79
Krugerrand 1.00 1,237.25 1,247.25 1,247.25
Maple Leaf 1.00 1,234.79 1,244.79 1,244.79
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SILVER Fine Tr.Oz. BID ASK $/oz
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VG+ Peace dollar 0.77 15.00 18.00 23.53
90% silver coin bags 0.72 11,146.85 11,432.85 15.99
US 40% silver 1/2s 0.30 4,540.05 4,688.05 15.89
100 oz .999 bar 100.00 1,549.00 1,624.00 16.24
10 oz .999 bar 10.00 158.90 162.40 16.24
1 oz .999 round 1.00 15.94 16.34 16.34
Am Eagle, 200 oz Min 1.00 17.64 18.04 18.04
SPOT PLATINUM: 920.90      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 935.90 965.90 965.90
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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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