The Moneychanger
Weekly Commentary
Friday, 29 September a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  22-Sep-17 29-Sep-17 Change % Change
Silver, cents/oz. 1,690.30 1,660.70 -29.60 -1.8
Gold, dollars/oz. 1,293.30 1,281.50 -11.80 -0.9
Gold/silver ratio 76.513 77.166 0.653 0.9
Silver/gold ratio 0.0131 0.0130 -0.0001 -0.8
Dow in Gold Dollars (DIG$) 357.23 361.42 4.18 1.2
Dow in gold ounces 17.28 17.48 0.20 1.2
Dow in Silver ounces 1,322.23 1,349.14 26.91 2.0
Dow Industrials 22,349.59 22,405.09 55.50 0.2
S&P500 2,502.22 2,519.36 17.14 0.7
US dollar index 91.97 92.92 0.95 1.0
Platinum 931.80 910.30 -21.50 -2.3
Palladium 920.50 937.95 17.45 1.9

September was a down month for silver, gold, platinum, & palladium, but a good month for stocks and the US dollar index. Nor was this week kind to metals.

US dollar index continues to limp higher, like a drunk swinging from one lamppost to another. Today it sank 8 basis points (0.09%) to 92.92. Y'all can see it here, Oh, it's trending up: MACD is rising as is the RSI, and it's above its 20 & 50 day moving averages. But it sure is limping. On that chart you'll see a descending red downtrend line from the January 2017 high. Today that hits about 96, next week about 95.75. next week 96.50. IF -- a big if -- the dollar index can poke through 94 resistance, it might rally toward that downtrend line, but when it draweth nigh that line, it will wilt like Superman juggling Kryptonite.

Might as well consider the euro chart: Bear in mind that the euro is almost 57% of the US dollar index. It collapsed through the bottom of that rising blue trading channel, fell to its 62 day moving average, and grabbed hold. It has turned up from there the last two days, but remains below its 50 DMA. Operating on the assumption the dollar has turned its long term trend down, the euro should be the big gainer.

Might as well address the last of the tapewormish fiat currencies, the yen. Lo, how are the mighty fallen, Now the yen has sunk beneath the surface of its 200 DMA and nears longstanding support about 87.50. Not much cheer in that chart.

Before we turn to stocks, ponder interest rates, specifically, the bellwether US 10 year treasury note yield. Lo, the chart, For all the hogwash sloshed over us about the Federal Reserve controlling interest rates, here you see the REAL controller, the market, raising rates. Think: the yield has risen ABOVE the downtrend line from the 2007 high, right before the Era of Negative Rates & Central Bank Rats. See, mark, the struggle to stay above that line, and how every time it slips below it climbs back again. After this new low for the move in September, the yield raced to the upper channel line and in the last three days has GAPPED through it and run to its 200 day moving average. No doubt some of this rise comes from folks dumping bonds to hop into the stock market. US 30 year treasury bond is really suffering, Could that be a head and shoulders on that chart? If so, the bond's breakdown will officially mark the end of the Charade of Negative Interest Rates.

Stocks keep right on rising, although that nagging little non-confirmation I mentioned was repeated today: S&P500 making new all time highs but the Dow refusing to follow suit. Dow today eked out 23.89 points (0.11%) to 22,405.09. S&P500 jumped 9.3 (0.37%) to 2,519.36.

When a market is topping, it can stretch out painfully. All the same, stocks are in for a big skid soon. (interesting stat: Since 31 Dec 2015 the S&P is up 23% while gold is 21% higher. Fact.)

Palladium remained above platinum today, $937.95 to $910.30. Hasn't happened since 2001. Here's a 27 year chart comparison,

Today on Comex gold lost $4.00 (0.3%) to 41,281.50. Silver backed off 16.6¢ (1.0%) to 1660.7¢. That's in addition to both metals having down weeks and a down month.

As the cliché says, it's always darkest just before the bottom falls out. Wait. Did I say that right? I don't really expect the bottom to fall out (just kiddin'!) but I do expect weakness for the next couple of weeks.

Gold keeps cleaving to the 50% retracement level ($1,283). I know watching this is as much fun as having your moustache pulled out one hair at a time, but I don't expect it will drop much lower. Here's the chart, Nothing to indicate an upward reversal so far.

Silver's hovering like gold, Just guessing that 1650¢ to 1625¢ will hold it tight.

Gold/Silver ratio went against us today and rose.

Y'all remain calm and patient. This will resolve to silver & gold's favor, & they will yet shine, sparkle, and glimmer before the year endeth.

What kind of person was my late beloved wife Susan? Yesterday I went to the optometrist where we'd both gone for several years. I went through the exams, paid my fees, and walked downstairs to my car. I was fiddling with my cell phone when my optometrist appeared at my window. He had run downstairs to catch me.

"I didn't know your wife had died! I'm sorry. She was the kind of person everybody was always glad to see. She was special."

I told him the reason: The love of God overflowed from her to everyone around her. You couldn't miss that something extraordinary was going on with Susan.

Wow. Wouldn't you rather be remembered THAT way than as the "old grouch who got mad & stormed out." I'm cleaning up my act -- for Susan.

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
29-Sep-17 Price Change % Change
Gold, $/oz 1,281.50 -4.00 -0.3
Silver, $/oz 16.61 0.17 1.0
Gold/Silver Ratio 77.166 -0.249 -0.3
Silver/Gold Ratio 0.0130 0.0001 1.0
Platinum 910.30 -10.70 -1.2
Palladium 937.95 9.00 1.0
S&P 500 2,519.36 9.30 0.4
Dow 22,405.09 23.89 0.1
Dow in GOLD $s 361.42 1.55 0.4
Dow in GOLD oz 17.48 0.07 0.4
Dow in SILVER oz 1,349.14 -12.17 -0.9
US Dollar Index 92.92 -0.08 -0.1
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: 1,279.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,296.03 1,306.03 1,306.03
1/2 AE 0.50 645.59 657.34 1,314.68
1/4 AE 0.25 325.99 332.64 1,330.57
1/10 AE 0.10 131.68 135.68 1,356.75
Aust. 100 corona 0.98 1,241.53 1,254.07 1,279.40
British sovereign 0.24 299.21 304.71 1,294.45
French 20 franc 0.19 236.48 241.48 1,293.39
Krugerrand 1.00 1,289.40 1,297.40 1,297.40
Maple Leaf 1.00 1,279.40 1,289.40 1,289.40
1/2 Maple Leaf 0.50 649.30 661.70 1,323.39
1/4 Maple Leaf 0.25 325.99 332.64 1,330.57
1/10 Maple Leaf 0.10 132.10 136.45 1,364.48
Mexican 50 peso 1.21 1,527.15 1,538.15 1,275.73
.9999 bar 1.00 1,281.40 1,293.40 1,293.40
SPOT SILVER: 16.61      
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 11,622.33 11,908.33 16.66
US 40% silver 1/2s 0.30 4,721.48 4,869.48 16.51
100 oz .999 bar 100.00 1,635.50 1,688.50 16.89
10 oz .999 bar 10.00 164.55 169.55 16.96
1 oz .999 round 1.00 16.56 17.11 17.11
Am Eagle, 200 oz Min 1.00 18.16 18.56 18.56
SPOT PLATINUM: 910.30      
Platinum Platypus 1.00 908.30 955.30 955.30
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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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