The Moneychanger
Daily Commentary
Monday, 7 August a.d. 2017 Browse the commentary archive

Well, if y'all were expecting to see the US dollar index shine and gambol today, face your disappointment. Friday the dollar index leapt up 79 basis points to 93.50, not enough to change the technical picture but a start at least on a rally. Today the buck gave back 19 basis points (0.2.%) & closed at 93.31.

Here's the dollar index chart through last Friday, I've drawn a horizontal resistance line about 94. Dollar index accomplishes naught till it clears that line -- aww, call it 94.5 for good measure.

Stocks are on the same page where we left them on Friday: all in death-dealing rising wedges except the Dow, which has thrown-over the top rising wedge boundary. Behold and compare, Dow at and S&P500 at

Dow Industrials alone made a new high again today, I believe the 9th day in a row. Meanwhile the other indices refrain from making new lows, stubbornly gainsaying the Dow. In Fact, the Russell 2000 has fallen below it 50 DMA and is trying to bust thru the wedge's bottom side.

Specifically, the Dow Industrials rose 25.61 (0.12%) & closed 22,118.42. S&P500 added 4.08 (0.16%) to 2,480.91.

Which brings us to the weird and goofy metals' closes. On Comex Gold lost ten whole cents to $1,258.20. Silver dropped 8/10 of one cent to 1622.1¢.

Targets, targets, targets? Look at gold first,

Today's low came at $1,256.15, and the 50 day moving average lies near at $1,253.81. Downtrend line from the July 2016 high meets gold just about the selfsame point. That confluence of support ought to contain gold's fall.

Now silver,

Look out below! Where's a handhold? The downtrend line from the July 2016 high, roughly 1575¢. But wait, before that comes the May low at 1607¢, which may exert some influence. Lower than 1575¢ expect I not.

Ponder also the gold/silver ratio,

It formed a bearish rising wedge, but threw over that at the price lows on 7 July. This is an end of day chart, and the ratio shows much jumpier on this chart than on a Comex chart. All the same, last week's metals weakness took it no higher than the top boundary of the rising wedge -- lower lows, lower highs equals a downtrend, and a rally in metals requires a falling gold/silver ratio. Ratio must still confirm its turnaround by falling out of the wedge, but it is turned that way.

Here's a laugh: Greenspan the Evil seems to be turning honest since he left the Federal Reserve. Lately he is warning of bonds plunging after a nine-year interest rate suppression by central banks. I couldn't agree more, and that's what makes me nervous -- being on the same side of anything as the perennially wrong and evil Greenspan.

Today all US paper money is six inches long, a handy ruler if you need one. However, until 7 August 1923 US bills were nine inches long. A philosopher or prophet might suspect the government was secretly warning the public what they were planning to do to the dollar's value. Nahhh, just a cosmic joke. Dollar back then was valued at 0.048375 troy ounce of gold. Today it buys 0.0008 troy ounce, 98.3% less.

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
3-Aug-17 Price Change % Change
Gold, $/oz 1,267.80 -4.00 -0.31%
Silver, $/oz 16.59 -0.10 -0.62%
Gold/Silver Ratio 76.401 0.232 0.30%
Silver/Gold Ratio 0.0131 -0.0000 -0.30%
Platinum 961.60 2.60 0.27%
Palladium 897.20 10.70 1.21%
S&P 500 2,472.16 5.41 0.22%
Dow 22,026.10 9.86 0.04%
Dow in GOLD $s 359.14 1.29 0.36%
Dow in GOLD oz 17.37 0.06 0.36%
Dow in SILVER oz 1,327.35 8.78 0.67%
US Dollar Index 92.77 -0.18 -0.19%
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SPOT GOLD: 1,267.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,277.21 1,310.17 1,310.17
1/2 AE 0.50 639.68 652.87 1,305.73
1/4 AE 0.25 324.59 331.19 1,324.75
1/10 AE 0.10 134.90 137.55 1,375.45
Aust. 100 corona 0.98 1,231.42 1,240.42 1,265.47
British sovereign 0.24 300.65 313.65 1,332.43
French 20 franc 0.19 234.31 238.31 1,276.45
Krugerrand 1.00 1,275.31 1,285.31 1,285.31
Maple Leaf 1.00 1,272.77 1,282.77 1,282.77
1/2 Maple Leaf 0.50 728.93 665.54 1,331.09
1/4 Maple Leaf 0.25 323.26 339.11 1,356.44
1/10 Maple Leaf 0.10 134.38 138.18 1,381.79
Mexican 50 peso 1.21 1,514.58 1,525.58 1,265.31
.9999 bar 1.00 1,265.70 1,277.70 1,277.70
SPOT SILVER: 16.59      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 20.50 24.50 32.03
VG+ Peace dollar 0.77 14.50 17.50 22.88
90% silver coin bags 0.72 11,643.78 11,929.78 16.69
US 40% silver 1/2s 0.30 4,715.58 4,863.58 16.49
100 oz .999 bar 100.00 1,648.50 1,688.50 16.89
10 oz .999 bar 10.00 164.85 284.23 28.42
1 oz .999 round 1.00 16.54 16.97 16.97
Am Eagle, 200 oz Min 1.00 17.34 18.59 18.59
SPOT PLATINUM: 961.60      
Plat. Platypus 1.00 979.60 1,001.60 1,001.60
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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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