The Moneychanger
Weekly Commentary
Friday, 25 August a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  18-Aug-17 25-Aug-17 Change % Change
Silver, cents/oz. 1,698.00 1,704.90 6.90 0.4
Gold, dollars/oz. 1,285.70 1,292.50 6.80 0.5
Gold/silver ratio 75.718 75.811 0.092 0.1
Silver/gold ratio 0.0132 0.0132 -0.0000 -0.1
Dow in Gold Dollars (DIG$) 348.49 348.88 0.39 0.1
Dow in gold ounces 16.86 16.88 0.02 0.1
Dow in Silver ounces 1,276.47 1,279.47 3.00 0.2
Dow Industrials 21,674.51 21,813.67 139.16 0.6
S&P500 2,455.25 2,443.07 -12.18 -0.5
US dollar index 93.36 92.68 -0.68 -0.7
Platinum 979.60 976.30 -3.30 -0.3
Palladium 929.50 931.05 1.55 0.2

'Twas a week that, if it didn't solve anything, left a few hints behind. Silver & gold refused to follow through with another down week, but didn't make any new highs. Stocks are blowing hot and cold out of both sides of their mouth, Dow up a little, S&P500 down a little, but both hovering over a deep canyon. US dollar index collapsed today -- might be a bottom?

Anyway you slice this US dollar index chart, it looks like rotten meat. Well, that's not precisely accurate. Today's low was 92.35, right about the early August low at 92.39, close enough to qualify as a double bottom. Yet now the dollar is like a man held over a cliff by his suspenders: one step through 92 and the suspenders break.

No surprise, the Euro today hit a new high for the move that began in April, but it was marginal, $1.1942 against $1.1909 on 2 August. Up 1.09% to $1.1931.Yen wasn't as enthusiastic, but appears to have broken out heavenward. Up 0.15% to 91.43 today.

I think the US Ten Year Treasury yield, proxy for interest rates generally, is painting a falling wedge, which should resolve into much higher interest rates. Look here,

Copper is going crazy, and has tunneled up through the downtrend line from the 2011 high.

Dow Jones Industrials added a modest 30.27 (0.14%) today and closed at 21,813.67. s&P500 rose 4.08 (0.17%) to 2,443.07. Dow can be seen at this link, and the S&P500 here,

Both indices remain within well defined downward trading channels. So far the 20 day moving average has blocked any Dow rise, the 50 DMA has stopped S&P500 rises. Unless they punch through that top channel like & rise like your child's helium balloon let loose, they will keep on rolling downslope.

The tedious, vexing rollover of stocks downward and gold upward may be spied in this Dow in Gold chart right here, Notice that the DiG is hovering above its 200 day moving average. Since it has already cracked two uptrend lines, this will be the final confirmation the DiG has turned down.

Dow in silver, is similar but not as advanced in it breakdown. Poised to break down through resistance from the 2016 & 2015 tops. When it cracks 1,250 oz. it will plunge.

Today Comex gold gained $6.00 (0.5%) to $1,292.50 while silver scraped up 8.6¢ to 1704.9¢.

Durned if that solves anything, but it shore does look good on a chart. Look at gold,

Y'all see where it stabbed through that uptrend line and 20 DMA?? That's strong trading, & the first half of a key reversal (break to new low with a higher close). Gold fell to $1,278.50 and got ambushed by buyers waiting in the shrubs. Yes, yes, high only reached $1,301.40, but the day closed at $1,297.90.

This screams, "Higher!" But gold has no place to go higher except to bust through that long-standing resistance at $1,300. Next week? Looks like it.

Now compare silver,

Wednesday I pointed out that rising wedge, outlined in purple. Ahh, yesterday and today silver staged a fake out, a false breakdown with the first half of a key reversal. Today is sliced through the 20 DMA and into the uptrend line, then turned round and closed at the 200 DMA. Well, falling wedges don't ALWAYS break out downward. One more upday and silver proves a key reversal upward.

Soon, soon, silver & gold will break through this stubborn resistance at $1,300 & 1700¢. Only thing y'all will hear is the sonic boom as they break away.

On 25 August 1718 hundreds of French colonists landed in New Orleans and founded the city. Given August's blistering heat in Louisiana and New Orleans' landscape (half swamp), you have to wonder why the French chose to stay there.

On 25 August 325 the Council of Nicaea ended, adopting the Nicene Creed.

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
25-Aug-17 Price Change % Change
Gold, $/oz 1,292.50 6.00 0.5
Silver, $/oz 17.05 0.09 0.5
Gold/Silver Ratio 75.811 0.348 0.5
Silver/Gold Ratio 0.0132 0.0001 0.5
Platinum 976.30 -3.50 -0.4
Palladium 931.05 -5.10 -0.5
S&P 500 2,443.07 4.08 0.2
Dow 21,813.67 30.27 0.1
Dow in GOLD $s 348.88 -1.10 -0.3
Dow in GOLD oz 16.88 -0.05 -0.3
Dow in SILVER oz 1,279.47 -4.70 -0.4
US Dollar Index 92.68 -0.53 -0.6
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: 1,291.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,299.05 1,309.05 1,309.05
1/2 AE 0.50 651.60 665.02 1,330.04
1/4 AE 0.25 330.64 337.35 1,349.41
1/10 AE 0.10 137.42 140.11 1,401.06
Aust. 100 corona 0.98 1,254.34 1,263.34 1,288.86
British sovereign 0.24 306.25 319.25 1,356.21
French 20 franc 0.19 238.67 242.67 1,299.81
Krugerrand 1.00 1,295.17 1,305.17 1,305.17
Maple Leaf 1.00 1,295.17 1,305.17 1,305.17
1/2 Maple Leaf 0.50 742.50 677.93 1,355.87
1/4 Maple Leaf 0.25 329.28 345.42 1,381.69
1/10 Maple Leaf 0.10 136.88 140.75 1,407.52
Mexican 50 peso 1.21 1,542.78 1,553.78 1,288.70
.9999 bar 1.00 1,289.30 1,301.30 1,301.30
SPOT SILVER: 17.04      
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 11,929.78 12,215.78 17.09
US 40% silver 1/2s 0.30 4,848.33 4,996.33 16.94
100 oz .999 bar 100.00 1,693.50 1,733.50 17.34
10 oz .999 bar 10.00 169.35 299.34 29.93
1 oz .999 round 1.00 16.99 17.42 17.42
Am Eagle, 200 oz Min 1.00 17.79 19.04 19.04
SPOT PLATINUM: 976.30      
Platinum Platypus 1.00 994.30 1,016.30 1,016.30
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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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