The Moneychanger
Daily Commentary
Monday, 2 October a.d. 2017 Browse the commentary archive

Grab the merry go round & ride around again!

US dollar index, robber of widows & orphans, enemy of industry, enemy of justice, killer of capital and savings, rose 54 basis points (0.6%) today to 93.46, top of the recent range:

Mark: this is a countertrend rally, which (if I am correct about the dollar index' primary trend turning down with the September low) should not pass 95.50. Yet it can last some time still, maybe two months. Don't torture yourself about it, it's doomed.

Stocks today finally set about improving their September breakout. Dow jumped 152.51 (0.7%) to 22,557.60 & the S&P500 added 9.76 (0.45) to 2,529.12.

Y'all go look at the charts: and Both show rising wedges which have been forming since early 2016 and are now reaching their point. Dow & S&P500 are approaching the upper boundaries. Dow could touch 23,000, yet y'all will witness a decline of 10% or more in the next two quarters.

Yield on the US 10 year Treasury note, proxy for interest rates generally, today made good a close above its 200 day moving average. No doubt headed much higher. Behold the chart,

Gold crumpled $8.80 (0.7%) today and landed on Comex at $1,272.70. Silver remained steady, losing only 2.2¢ (0.13%) to 1658.5¢.

When a market gets depressing like this, that very thought -- "This is depressing" -- ought to alert you the decline is nearing its end. Gold's chart, offers no hint of turning up, except that the MACD is waxing more oversold, as is the RSI. Next support pops up about $1,265.

Down here around 1650¢ is where silver partisans ought to start coming out of the woods, emboldened by the drop.

Patience, patience. Time, government, & central banking are on our side.

I am so stupid, so dull, so wanting in insight. Hugh Hefner, Playboy publisher, died a few days ago and until I listened to the radio, specifically National Proletarian Radio, I never knew he was a pioneer, a knight-crusader for free speech, a pathbreaker of the cultural revolution, a demi-god of taste & art.

Such a clod am I! I thought he just got rich publishing pictures of naked women, and published more of 'em because that made him richer still. I never realized he was doing it for art's sake and freedom's sake & a whole slush-pot of higher values.

I am such a bourgeois philistine. Forgive me, oh ye true arbiters of taste & culture!

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
2-Oct-17 Price Change % Change
Gold, $/oz 1,272.70 -8.80 -0.69%
Silver, $/oz 16.59 -0.02 -0.13%
Gold/Silver Ratio 76.738 -0.428 -0.55%
Silver/Gold Ratio 0.0130 0.0001 0.56%
Platinum 911.60 1.30 0.14%
Palladium 912.40 -25.95 -2.77%
S&P 500 2,529.12 9.76 0.39%
Dow 22,557.60 152.51 0.68%
Dow in GOLD $s 366.39 4.98 1.38%
Dow in GOLD oz 17.72 0.24 1.38%
Dow in SILVER oz 1,360.12 10.99 0.81%
US Dollar Index 93.46 0.54 0.58%
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SPOT GOLD: 1,270.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,288.19 1,298.19 1,298.19
1/2 AE 0.50 641.05 652.80 1,305.59
1/4 AE 0.25 323.70 330.35 1,321.39
1/10 AE 0.10 130.75 134.75 1,347.48
Aust. 100 corona 0.98 1,232.79 1,245.25 1,270.40
British sovereign 0.24 297.11 302.61 1,285.51
French 20 franc 0.19 234.81 239.81 1,284.48
Krugerrand 1.00 1,280.40 1,288.40 1,288.40
Maple Leaf 1.00 1,270.40 1,280.40 1,280.40
1/2 Maple Leaf 0.50 644.73 657.13 1,314.26
1/4 Maple Leaf 0.25 323.70 330.35 1,321.39
1/10 Maple Leaf 0.10 131.17 135.52 1,355.19
Mexican 50 peso 1.21 1,516.40 1,527.40 1,266.82
.9999 bar 1.00 1,272.40 1,284.40 1,284.40
SPOT SILVER: 16.53      
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 11,532.95 11,818.95 16.53
US 40% silver 1/2s 0.30 4,699.35 4,847.35 16.43
100 oz .999 bar 100.00 1,628.00 1,681.00 16.81
10 oz .999 bar 10.00 163.80 168.80 16.88
1 oz .999 round 1.00 16.48 17.03 17.03
Am Eagle, 200 oz Min 1.00 18.08 18.48 18.48
SPOT PLATINUM: 911.60      
Plat. Platypus 1.00 909.60 956.60 956.60
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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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