The Moneychanger
Weekly Commentary
Friday, 6 October a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  29-Sep-17 6-Oct-17 Change % Change
Silver, cents/oz. 1,660.70 1,673.40 12.70 0.8
Gold, dollars/oz. 1,281.50 1,271.60 -9.90 -0.8
Gold/silver ratio 77.166 75.989 -1.177 -1.5
Silver/gold ratio 0.0130 0.0132 0.0002 1.5
Dow in Gold Dollars (DIG$) 361.42 370.22 8.81 2.4
Dow in gold ounces 17.48 17.91 0.43 2.4
Dow in Silver ounces 1,349.14 1,360.92 11.79 0.9
Dow Industrials 22,405.09 22,773.67 368.58 1.6
S&P500 2,519.36 2,549.33 29.97 1.2
US dollar index 92.92 93.62 0.70 0.8
Platinum 910.30 912.90 2.60 0.3
Palladium 937.95 920.10 -17.85 -1.9

Okay, that's more like it. Silver gained a little this week while gold lost, but I'll explain in a minute why that is much better than it looks. Stocks went muscular this week, but if they didn't make their peak this week, it is near. US dollar index has begun a countertrend upward rally, but can't seem to find much traction.

US dollar index keeps on spinning its wheels, up one day, down the next, grinding upward toward the barrier at 94. May exceed that and even trade to 95.50, but the long uptrend has been smashed, and the next large move will be toward the earth's molten core. Today the dollar index backed off 16 basis points (02%) to 93.62. Chart right here Shows why I believe the long dollar uptrend has ended. Dollar Index recently broke below the May 2016 low. That looks fatal.

I am repeating what I wrote yesterday about the stock market and those six and eight day winning streaks that almost never happen. When they do, they usually picture a move's exhaustion. But first --- today the Dow shaved off 1.72 (0.01%) to 22,773.67. S&P500 lost 2.74 (0.11%) to 2,549.33.

Here's the Dow Industrials chart, With red arrows I have marked the severely overbought RSI above, the 7-day upstreak, and the declining volume of that move.

Lo, the S&P500 chart, I have also red-arrowed the overbought RSI, 8-day winning streak, flat volume attending the rise, and the overbought MACD.

For your viewing & comprehending pleasure, here is Gold from 1 July 2011 through 15 September 2011 when it was topping toward $1,917.00. Notice the painfully overbought RSI, the 6-day wining streak, and the rising but relative puny volume of the winning streak. For predictive purposes, mark that gold's 6-day hot streak ended in a Key Reversal when it traded to a new intraday high at $1,917.90 but closed that day lower, followed by a lower close the next day. From intraday high to intraday low, gold lost 11% in three days.

See what I mean?

Nay, I cannot say that stocks have also definitely topped. Today they merely stopped rising and scraped a few points off. Watch next week. Watch for a Key Reversal. Hide, and watch.

By the way this latest stock market jump combined with gold's slump has taken the Dow in Gold to a new high. We'll look at that next week.

Today was a much better day for silver & gold. Comex silver leapt 15.2¢ (0.9%) to 1673.4¢. Gold added only $1.70 to $1,271.60, but it looked better than yesterday's lowest close for the move, $1,269.90.

Gold's one day chart shows a cascade from $1,278 about 10:00 down to a low at $1,260.50 about noon. Off that low gold EXPLODED upward in a series of rapid fire gaps that reached $1,276. Now what do you call this? Right! A Key Reversal, breaking to new low ground but closing the day higher than the previous day. Here's the daily chart, Observe that gold retreated today to that support around $1,265, actually hit $1,260.50, then immediately recovered and closed higher, all on high volume. To qualify as a full Key Reversal gold must also close higher on Monday, too, and for certainty's sake, ought to close higher Tuesday as well.

Silver's one day chart shows a similar success story. Flat till 11:00, cascading down to a 1630¢ low, then pulling the Jupiter Rocket move from the low to 1685¢. First step of a Key Reversal. Best news we've had in a month. Go look for yourself,

I'm always a mite impatient, but provided we see gold and silver close again higher on Monday, we have seen the low for this correction. That doesn't mean both metals will take off skyward at once next week, only that the low is most likely behind us.

Higher closes on Monday would make me buy both gold and silver.

I had to drive to the propane distributor today to get them to fill my tank. Susan always took care of all that household economy business, and I couldn't get them on the phone so I went in my own person. When the lady there found out who I had been married to, she said, "She was a wonderful lady. I always loved to talk to her." I think I told y'all about her first meeting with Susan 17 years ago. Susan came in while she was frantically sorting through the garbage looking for $200 in cash she had mislaid. Susan quieted and soothed her and got down there in the floor with her, sorting & looking.

But it wasn't only that. There WAS something in the timbre and tone of Susan's voice that welcomed and embraced you. Simply made you certain everything was going to be all right.

Anniversary of Susan's passing into Jesus' arms is next Wednesday, 11 October. We are going to celebrate with Holy Communion at Church and afterwards share supper & Susan stories. We'll have a bodacious worship service, and a bodacious good time.

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
6-Oct-17 Price Change % Change
Gold, $/oz 1,271.60 1.70 0.1
Silver, $/oz 16.73 0.15 0.9
Gold/Silver Ratio 75.989 0.095 0.1
Silver/Gold Ratio 0.0132 0.0001 0.9
Platinum 912.90 -1.60 -0.2
Palladium 920.10 -17.50 -1.9
S&P 500 2,549.33 -5.74 -0.2
Dow 22,773.67 -1.72 -0.0
Dow in GOLD $s 370.22 -0.49 -0.1
Dow in GOLD oz 17.91 -0.02 -0.1
Dow in SILVER oz 1,360.92 -12.58 -0.9
US Dollar Index 93.62 -0.16 -0.2
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: 1,274.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,293.21 1,303.21 1,303.21
1/2 AE 0.50 642.92 654.67 1,309.33
1/4 AE 0.25 324.64 331.29 1,325.16
1/10 AE 0.10 131.13 135.13 1,351.29
Aust. 100 corona 0.98 1,236.38 1,248.87 1,274.10
British sovereign 0.24 297.97 303.47 1,289.18
French 20 franc 0.19 235.50 240.50 1,288.14
Krugerrand 1.00 1,284.10 1,292.10 1,292.10
Maple Leaf 1.00 1,274.10 1,284.10 1,284.10
1/2 Maple Leaf 0.50 646.61 659.01 1,318.01
1/4 Maple Leaf 0.25 324.64 331.29 1,325.16
1/10 Maple Leaf 0.10 131.55 135.90 1,359.01
Mexican 50 peso 1.21 1,520.82 1,531.82 1,270.48
.9999 bar 1.00 1,276.10 1,288.10 1,288.10
SPOT SILVER: 16.76      
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 11,661.65 11,947.65 16.71
US 40% silver 1/2s 0.30 4,767.20 4,915.20 16.66
100 oz .999 bar 100.00 1,651.00 1,704.00 17.04
10 oz .999 bar 10.00 166.10 171.10 17.11
1 oz .999 round 1.00 16.71 17.26 17.26
Am Eagle, 200 oz Min 1.00 18.31 18.71 18.71
SPOT PLATINUM: 912.90      
Platinum Platypus 1.00 910.90 957.90 957.90
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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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