The Moneychanger
Daily Commentary
Wednesday, 27 September a.d. 2017 Browse the commentary archive

Dollar index slapped the metals' jaws today. Nasty US dollar index rose 47 basis points (0.5%) to 93.26. Here's the chart -- I've drawn in today's missing bar,

The long decline & widely bearish outlook account for a sharp rally. That's typical of oversold markets: scared shorts run fast.

Euro has broken, cascading out of its upward trading channel/rising wedge and now rolling below its 50 day moving average. Looky here,

Yen hath collapsed, and today busted the 200 DMA. Dropped 0.5% today to 88.65. Dollar's on a roll.

Stocks found some source of optimism today. Dow rose 56.39 (0.25%) to 22,340.71 and the S&P500 climbed 10.2 (0.41%) to 2,507.04. Dow chart's here,

For the first time since a rogue Swiss trader jimmied palladium back in 2000 - 2001, palladium closed higher than platinum today, $925.20 against $921.50. This 22 year chart will show you what I mean, Can't say I know what it means, but it is odd.

Silver & gold continued to tumble today. Comex silver dropped 5.6¢ (0.33%) to 1674.8¢ and gold surrendered $13.60 (1.05%) to $1,283.40

Let us think about corrections & targets. Gold climbed from $1,204 in July to $1,362 in September. If it gave back 50% of that rise, which frequently happens in corrections, it would land at $1,283.20. That's where Comex gold closed today. Mmmm. A larger correction, 62%, would carry gold to $1,264.20. Expect the weakness to last, lower or sideways, for two weeks.

Silver held up better than gold, but is tangled in that uptrend line from the December 2015 low, which is bound to lend some support. Same 50% correction test applied to silver yields a possible target of 1632¢. Obligingly, the end of day gold/silver ratio fell back today.

Dollar strength is driving this.

On 27 September 1964 the Warren Commission released its finding that Lee Harvey Oswald, who began keeping a diary before he allegedly shot President Kennedy, was a lone assassin. Oddly enough, Arthur Bremer who tried to assassinate George Wallace in 1972 was found to be also a diary-keeping lone assassin. As was John Hinckley, Jr. who tried to kill Ronald Reagan in 1981, also a diary-keeping lone assassin. One imagines they all wrote the same thing in that diary: "Dear Diary, Hi! I'm a lone assassin, and I've decided to kill xxxxx. Remember, I am ALL alone. I am all alone. I am all alone." That's as convenient as that terrorist's passport they found floating down from the World Trade Tower on 9/11.

That same day in 1964 Bigfoot was sighted numerous times in Washington state, and Santa Claus was spied making an untimely autumn flight near the Empire State Building.

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
27-Sep-17 Price Change % Change
Gold, $/oz 1,283.40 -13.60 -1.05%
Silver, $/oz 16.75 -0.06 -0.33%
Gold/Silver Ratio 76.630 -0.554 -0.72%
Silver/Gold Ratio 0.0130 0.0001 0.72%
Platinum 921.50 -3.20 -0.35%
Palladium 925.20 10.50 1.15%
S&P 500 2,507.04 10.20 0.41%
Dow 22,340.71 56.39 0.25%
Dow in GOLD $s 359.84 4.67 1.32%
Dow in GOLD oz 17.41 0.23 1.32%
Dow in SILVER oz 1,333.93 7.80 0.59%
US Dollar Index 93.26 0.47 0.51%
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: 1,280.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,293.61 1,303.61 1,303.61
1/2 AE 0.50 646.30 658.05 1,316.10
1/4 AE 0.25 326.35 333.00 1,332.00
1/10 AE 0.10 131.82 135.82 1,358.19
Aust. 100 corona 0.98 1,246.02 1,255.44 1,280.80
British sovereign 0.24 299.54 305.04 1,295.84
French 20 franc 0.19 236.73 241.73 1,294.77
Krugerrand 1.00 1,290.80 1,298.80 1,298.80
Maple Leaf 1.00 1,280.80 1,290.80 1,290.80
1/2 Maple Leaf 0.50 650.01 662.41 1,324.81
1/4 Maple Leaf 0.25 326.35 333.00 1,332.00
1/10 Maple Leaf 0.10 132.24 136.59 1,365.93
Mexican 50 peso 1.21 1,528.82 1,539.82 1,277.12
.9999 bar 1.00 1,282.80 1,294.80 1,294.80
SPOT SILVER: 16.70      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 21.00 24.00 31.37
VG+ Peace dollar 0.77 14.50 17.50 22.88
90% silver coin bags 0.72 11,690.25 11,976.25 16.75
US 40% silver 1/2s 0.30 4,749.50 4,897.50 16.60
100 oz .999 bar 100.00 1,645.00 1,698.00 16.98
10 oz .999 bar 10.00 165.50 170.50 17.05
1 oz .999 round 1.00 16.65 17.20 17.20
Am Eagle, 200 oz Min 1.00 18.25 18.65 18.65
SPOT PLATINUM: 921.50      
Plat. Platypus 1.00 919.50 966.50 966.50
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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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