The Moneychanger
Daily Commentary
Tuesday, 10 October a.d. 2017 Browse the commentary archive

ALL RIGHT, for the second day gold closed higher after Friday's Key Reversal first step. Now gold & silver are WORKING.

US dollar index continues to slump, affrighted by the specter of actually crashing through resistance at 94. Fell 52 basis points today (0.56%) to 93.04. Ahh, dollar index is still trending up, just correcting that first step up.

Tomorrow marks the 10th anniversary of the 2007 stock market top. It is instructive and eye-catching for the inquiring mind to ponder the similarities of the 1 August 2007 through 31 October 2007 Dow Industrials chart, right here, and the 1 August 2017 - 10 Oct 2017 chart here, Because I am no more'n a nat'ral born durn fool from Tennessee, I make no statement. Y'all tell me what it means..

Today stocks did rise. Dow Industrials climbed 69.61 (0.31%) to a new all-time high, etc., at 22,830.68. S&P500 also gained, 5.91 (0.23%) to 2,550.64.

Lest ye forget, here is the Dow in Gold, this 2-1/4 year chart shows the Dec 2015 peak, following breakdown, and rally to a new high (17.621 oz) in December 2017. Latest rally in stocks combined with correction in gold eked out a bare new high at 17.888 oz. That has hooked down the last three days, but has not yet confirmed a reversal.

Dow in silver warrants a look as well, Here you meet lows and highs simultaneous to the Dow in Gold's, but also breaking to a new high in July, with another rally (but to a lower high) recently. Both Dow in gold & Dow in silver sport broadening top formations, but both need to confirm that they have reversed. Look at the RSI: it has already turned down from overboughtness.

US interest rates keep rising, driving bonds down. The 30 year US treasury bond has broken down from its trading channel and sunk beneath it 200 day moving average. Looky, looky,

Glance at the gold/silver ratio (gold price divided by silver price), After what -- so far -- appears to be a false upside breakout during the gold & silver correction, the ratio has now flopped back into the trading channel & dived below the intertwined 20 & 50 DMAs. I will give my eyes no rest until I see it below that 200 DMA once again. Closing Comex ratio today was 75.241.

On Comex where they take no prisoners gold jumped $8.80 (0.7%) to $1,290.80. Silver doubled that performance, up 23.9¢ or 1.41% to 1715.5¢.

First, the gold chart, On this end-of-day chart gold gapped up out of a falling wedge until it bumped into the entwined 50 & 20 DMAs. This is unequivocally positive trading. Gappiness shows nervous shorts & resolute longs. MACD & RSI have turned up. Volume is strong, but could have been stronger today.

Silver shines even brighter,

Behold, the same picture, a gap up through resistance, and in silver's case, through the 20 & 50 DMAs. That green line silver jumped through is the uptrend line from the December 2015 low. You will recall that in July and recently silver used that to scare the pants off those not accustomed to silver's manic volatility - including sometimes me. Silver, "Excess" is thy middle name!

Next technical target for silver is that last high at 1829¢. Given the gaps today, I expect both metals to rise strongly another couple of days.

If y'all were holding off buying until you got PROOF the correction has ended, I reckon you've got all the proof you can carry now.

On 10 October 732 Charles "the Hammer" Martel defeated the invading Ummayad Moslem army from Spain at the Battle of Tours in France. It marked the high water mark of the Islamic invasion of Europe. An estimated 15-20,000 Frankish and Burgundian troops defeated 20 - 25,000 Arabs and Berbers.

Tomorrow we celebrate the death of my beloved wife Susan exactly one year ago. We were married 49 years, and I still thank God for her love and life every day.

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
10-Oct-17 Price Change % Change
Gold, $/oz 1,290.80 8.80 0.69%
Silver, $/oz 17.16 0.24 1.41%
Gold/Silver Ratio 75.243 -0.543 -0.72%
Silver/Gold Ratio 0.0133 0.0001 0.72%
Platinum 933.60 18.70 2.04%
Palladium 934.75 5.65 0.61%
S&P 500 2,550.64 5.91 0.23%
Dow 22,830.68 69.61 0.31%
Dow in GOLD $s 365.63 -1.39 -0.38%
Dow in GOLD oz 17.69 -0.07 -0.38%
Dow in SILVER oz 1,330.85 -14.69 -1.09%
US Dollar Index 93.04 -0.52 -0.56%
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: 1,288.45      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,307.78 1,320.66 1,320.66
1/2 AE 0.50 650.16 661.91 1,323.82
1/4 AE 0.25 328.30 334.95 1,339.80
1/10 AE 0.10 132.61 136.61 1,366.07
Aust. 100 corona 0.98 1,250.31 1,262.94 1,288.45
British sovereign 0.24 301.33 306.83 1,303.44
French 20 franc 0.19 238.15 243.15 1,302.35
Krugerrand 1.00 1,298.45 1,306.45 1,306.45
Maple Leaf 1.00 1,290.45 1,303.45 1,303.45
1/2 Maple Leaf 0.50 653.89 666.29 1,332.58
1/4 Maple Leaf 0.25 328.30 334.95 1,339.80
1/10 Maple Leaf 0.10 133.03 137.38 1,373.82
Mexican 50 peso 1.21 1,541.83 1,554.48 1,289.28
.9999 bar 1.00 1,290.45 1,302.45 1,302.45
SPOT SILVER: 17.14      
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 12,004.85 12,290.85 17.19
US 40% silver 1/2s 0.30 4,879.30 5,027.30 17.04
100 oz .999 bar 100.00 1,689.00 1,742.00 17.42
10 oz .999 bar 10.00 169.90 174.90 17.49
1 oz .999 round 1.00 17.09 17.64 17.64
Am Eagle, 200 oz Min 1.00 18.69 19.09 19.09
SPOT PLATINUM: 933.60      
Plat. Platypus 1.00 931.60 978.60 978.60
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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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