The Moneychanger
Daily Commentary
Thursday, 12 October a.d. 2017 Browse the commentary archive

Building on Friday/Monday's Key Reversals, silver & gold resumed their alpine march today.

Not so the US dollar index, although it did rise 14 basis points (0.15%) to 92.96. Dollar index hit 94 resistance and suffered three down days. That send it crashing through the sharp uptrend line back to a visit its (nearly simultaneous) 50 & 20 day moving averages. That's not fatal, and today it bounced up. The uptrend remains in force, but the MACD & RSI look right moth-eaten.

Stocks shaved of a few points today. Dow lost 31.88 (0.14%) to 22,841.01. S&P500 gave back 4.31 (0.17%) to 2,550.93. My opinion the Dow will spike to 2,000 before it quits abideth still, but any downside surprise is possible. Both indices are now striking the top boundary of a rising wedge. RSI at 71.62 is right strongly overbought, MACD (below) wants to turn down. No point in getting anxious, stocks will break soon enough.

Silver & gold started stepping back up in the right direction today. Comex gold rose $7.50 (0.6%) to $1,293.30 and silver escalated 13¢ (0.76%) to 1721.1¢. Where does that leave us?

Put your eye on the Gold chart,

Gold is still head-butting that overhead resistance at $1,300. Stopped today at a high of $1,299.80. It has stopped dead on its 50 day moving average, so it's important gold pushes that little barrier aside and climbs once again above that downtrend line from 2011. Above that the purple line through $1,362.40 marks a trend line that has been stopping gold since mid 2013. Anybody who has a ruler and a pencil to draw a line on a chart will know, when gold breaks that line, that far higher prices are in the cards. Gold continues to march toward that line, as it has all year.

Silver chart may be seen here,

All year long silver has been trying unsuccessfully to beat 1865¢. Now once again it has climbed above 1725¢ resistance (barely, barely), the 20, 50, & 200 day moving averages. MACD (below) has also trend up, RSI is climbing. Only fly in this ointment is that volume dribbling off.

Uptrend that began in December 2015 continues, slowly, of course, as market moves always are after a long (5 year) correction. However, both metals are reaching toward line-crossings that will attract buyers like politicians attract bribes.

"Fairness" is nothing anyone will ever accuse the US media of They were all hand-springs & clapping when Bernard Obama used presidential orders to install Marxism economic & cultural. Their outrage knows no bounds when Trump uses the same power to roll back Obamacare. I'm no Trump partisan, but you'd have to be hog blind, deaf, and dumb not to notice this bias.

Last night we celebrated the first anniversary of my wife Susan's death with a worship service followed by supper. All but one of my 7 children were there, 14 grandchildren, and several friends. After supper everybody told Susan Stories, at least one I had never heard.

In 1999 we were expanding our log house, The Shoe. Susan was Overall Boss of Construction. Somehow or other she got snookered into hiring a plumber, Richard P., who not only was a sorry plumber but also a drunk. Came one Friday Susan was paying everybody out of her tin box, out in the driveway. I wasn't there. Richard P. pulled up in a car with three friends, drunk in earnest & desiring to be paid for the 20 minutes he had worked that week.

Susan's mother was visiting, standing behind her as she paid everyone. Richard sidled up and held out his hand as if to say, "Pay me!"

Susan snapped shut the lid of her tin box and fixed, as only she could, the Glare of Imminent Death on Richard. "Richard," she said, "you're drunk, and you're embarrassing me in front of my mother."

Richard wilted, tucked his tail between his legs, slunk back to his friends waiting in the car, and was never seen again.

Most of the time Susan was especially nice, but you did NOT want her mad at you, ever.

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
12-Oct-17 Price Change % Change
Gold, $/oz 1,293.30 7.50 0.58%
Silver, $/oz 17.21 0.13 0.76%
Gold/Silver Ratio 75.144 -0.133 -0.18%
Silver/Gold Ratio 0.0133 0.0000 0.18%
Platinum 939.10 8.70 0.94%
Palladium 974.80 14.75 1.54%
S&P 500 2,550.93 -4.31 -0.17%
Dow 22,841.01 -31.88 -0.14%
Dow in GOLD $s 365.09 -2.64 -0.72%
Dow in GOLD oz 17.66 -0.13 -0.72%
Dow in SILVER oz 1,327.12 -11.97 -0.89%
US Dollar Index 92.96 0.14 0.15%
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: 1,293.85      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,313.26 1,326.20 1,326.20
1/2 AE 0.50 652.89 664.64 1,329.28
1/4 AE 0.25 329.68 336.33 1,345.31
1/10 AE 0.10 133.16 137.16 1,371.64
Aust. 100 corona 0.98 1,255.55 1,268.23 1,293.85
British sovereign 0.24 302.59 308.09 1,308.80
French 20 franc 0.19 239.15 244.15 1,307.69
Krugerrand 1.00 1,303.85 1,311.85 1,311.85
Maple Leaf 1.00 1,295.85 1,308.85 1,308.85
1/2 Maple Leaf 0.50 656.63 669.03 1,338.06
1/4 Maple Leaf 0.25 329.68 336.33 1,345.31
1/10 Maple Leaf 0.10 133.59 137.94 1,379.40
Mexican 50 peso 1.21 1,548.29 1,560.99 1,294.68
.9999 bar 1.00 1,295.85 1,307.85 1,307.85
SPOT SILVER: 17.25      
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 12,083.50 12,369.50 17.30
US 40% silver 1/2s 0.30 4,911.75 5,059.75 17.15
100 oz .999 bar 100.00 1,700.00 1,753.00 17.53
10 oz .999 bar 10.00 171.00 176.00 17.60
1 oz .999 round 1.00 17.20 17.75 17.75
Am Eagle, 200 oz Min 1.00 18.80 19.20 19.20
SPOT PLATINUM: 939.10      
Plat. Platypus 1.00 937.10 984.10 984.10
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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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