The Moneychanger
Daily Commentary
Thursday, 20 July a.d. 2017 Browse the commentary archive

Lawsie, lawsie! I wouldn't trade currencies with YOUR money, let alone mine.

Mario Draghi, head criminal at the European Central Bank, mumbled something today about a strong euro being good and the euro shot up 1% to $1.1631. Chart's here,

Here's that perennial conundrum: when a market experiences a strong, very strong, day, does it mark the top of the move or a continuation? Durned if I know. The euro struck the top boundary of its trading channel and punched through its top Bollinger Band (a measure that ought to capture 95% of expected moves -- in other words, when you're hitting the Band, you're working on borrowed time). Looks awfully overbought. Will it remain vigorous?

Likewise the US dollar tanked 58 basis points (0.6%) to 94.25. Look at the mess here,

Y'all can see the dollar index (scrofulous parasite on the global carotid artery) hitting its lower Bollinger band. Today'94.25 low matches day before yesterday's low, so might it be a double bottom that arks a turnaround? Might, or might be the day before it launches into the sewer. Might force Pasty Janet to do something to slow the fall.

Broadening tops are uniquely frustrating. They act like they mean to break out upside, then faint. Here's the Dow, and here's the S&P500,

For all their differences, y'all can see the same megaphone formation, the same piercing the top boundary, the same hesitation & failure. All typical of a broadening top, which buildeth patience like a case of poison ivy. Here's the 2000 Dow top, also a megaphone,

Dow fell 28.97 today (0.13%) to 21,611.78. S&P500 shaved off 0.38 point to end at 2473.45. No resolution yet.

Silver & gold temporized today. Comex gold gained $3.60 (0.3%) to $1,244.80 & silver gained 48¢ (0.3%) to 1629.9¢. Their feet are tangled in resistance. Some extra burst of energy is needed to push them through the brambles here.

Think today about the gold/silver ratio, here

Remember that because silver is more volatile than gold & usually outperforms in rallies, we want to see that ratio dropping. It has been dropping since the July 7 washout lows, and has now three days been below the 20 day moving average. A close below the 50 DMA, not at 75.01, will break the uptrend line & speed things along.

On 20 July 1944 a plot to assassinate Adolf Hitler failed. Claus Shenk, Count von Stauffenberg, plated a bomb in Hitler's Rastenberg eastern headquarters, but a heavy table support between Hitler and the bomb deflected the blast so that Hitler survived. The plotters risked everything to save their country, and they lost everything, men of whom it can justly be said, Dulce et decorum est, pro patria mori.

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
20-Jul-17 Price Change % Change
Gold, $/oz 1,244.80 3.60 0.29%
Silver, $/oz 16.30 0.05 0.30%
Gold/Silver Ratio 76.373 -0.004 -0.01%
Silver/Gold Ratio 0.0131 0.0000 0.01%
Platinum 930.50 8.50 0.92%
Palladium 852.60 -11.55 -1.34%
S&P 500 2,473.45 -0.38 -0.02%
Dow 21,611.78 -28.97 -0.13%
Dow in GOLD $s 358.90 -1.52 -0.42%
Dow in GOLD oz 17.36 -0.07 -0.42%
Dow in SILVER oz 1,325.96 -5.70 -0.43%
US Dollar Index 94.25 -0.58 -0.61%
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: 1,242.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 2,467.79 1,284.54 1,284.54
1/2 AE 0.50 652.62 643.20 1,286.40
1/4 AE 0.25 319.79 329.37 1,317.47
1/10 AE 0.10 131.64 134.85 1,348.55
Aust. 100 corona 0.98 1,207.33 1,216.33 1,240.90
British sovereign 0.24 294.77 307.77 1,307.45
French 20 franc 0.19 229.73 233.73 1,251.90
Krugerrand 1.00 1,250.36 1,260.36 1,260.36
Maple Leaf 1.00 1,249.11 1,259.11 1,259.11
1/2 Maple Leaf 0.50 714.67 652.52 1,305.05
1/4 Maple Leaf 0.25 316.94 332.48 1,329.90
1/10 Maple Leaf 0.10 131.75 135.48 1,354.76
Mexican 50 peso 1.21 1,484.95 1,495.95 1,240.74
.9999 bar 1.00 1,244.90 1,252.90 1,252.90
SPOT SILVER: 16.26      
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 11,372.08 11,658.08 16.31
US 40% silver 1/2s 0.30 4,618.23 4,766.23 16.16
100 oz .999 bar 100.00 1,575.50 1,650.50 16.51
10 oz .999 bar 10.00 161.55 165.05 16.51
1 oz .999 round 1.00 16.21 16.61 16.61
Am Eagle, 200 oz Min 1.00 17.01 18.31 18.31
SPOT PLATINUM: 930.50      
Plat. Platypus 1.00 945.50 975.50 975.50
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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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