The Moneychanger
Daily Commentary
Tuesday, 17 October a.d. 2017 Browse the commentary archive

Dow reached 23,000 today but did not close above it, ending up 40.48 (0.18%) at 22,997.44. S&P500 rose 1.72 (0.07%) to 2,559.36. Y'all should have been expecting this. Stocks are topping, little as y'all may believe it.

US dollar index is filling out that right shoulder, seen here, It rallied today 23 basis points (0.25%) to 93.38. Nothing new to add here. Assuming that is indeed an upside-down head and shoulders and that it pierces the neckline at 94, it should rally to 97 or about the 200 day moving average before it throws a rod and reverses. Right now betters seem to be hoping that the Fed will get a new member who will favor raising rates. Four of 7 board members must be appointed. Seems doubtful to me that the always chicken-livered Fed will raise interest rates in November. Remains to be seen also what will happen as the Fed attempts to shrink its balance sheet, an operation never before tried by any central bank in history. Good luck.

Silver & gold followed yesterday's busts with by sinking further. Gold had its worst day in a month, peeling off $16.90 (1.3%, owch!) and closing at $1,283.00 on Comex, near enough the $1,282.80 low to scare it to death. Silver tumbled worse, sliding 32.8¢ (1.9%) to 1698.7¢. Low was 1693.5¢.

Gold's daily chart is right here,

I feel like I'm looking at a bleeding Gold up on a pool table after a shootout saying, "Gold, how many times you been hit?" Maybe gold is simply filling that gap it left behind when it broke out of that falling wedge, but it looks weaker than that. It has fallen below that support from $1,295 - $1,305, which now transmogrifies into resistance above. Logical target becomes the 200 day moving average around $1,256 today or maybe support just above $1,260. 20 & 50 day moving averages are lined up bearishly, that is, with the 20 below the 50 now. RSI points down, MACD is rolling over downward, volume rose with today's fall. All that adds up to lower prices coming.

Silver's end of day chart hides here,

Silver's chart differs from gold in that it has now fallen to the uptrend line from the December 2015 low. If it falls through that, it will move much lower, maybe back to 1600¢. As with gold, the indicators all point down and volume rose on today's fall. Pretty much a recipe for cheaper silver.

Long term nothing has changed. We're just waiting for a bargain buy a little lower.

Bitcoin closed today at $5591.15, up from $1938.34 on 16 July 2017. Here's a chart from 2010 to today,

This is a parabolic rise. If you own Bitcoin, you'd better set some sell stops, even if only mental sell stops, and keep on pulling them up as it rises.

I wish I could trust this. I've tried, but it's simply too ethereal, too ungrounded, for me to love. Sorry -- I will crawl back into the cave where I dwell, where the most advanced technology is fire. Well, we do have flint knives, too.

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
17-Oct-17 Price Change % Change
Gold, $/oz 1,283.00 -16.90 -1.30%
Silver, $/oz 16.99 -0.33 -1.89%
Gold/Silver Ratio 75.528 0.455 0.61%
Silver/Gold Ratio 0.0132 -0.0001 -0.60%
Platinum 932.10 -7.30 -0.78%
Palladium 977.50 -0.35 -0.04%
S&P 500 2,559.36 1.74 0.07%
Dow 22,997.44 40.48 0.18%
Dow in GOLD $s 370.54 5.46 1.50%
Dow in GOLD oz 17.92 0.26 1.50%
Dow in SILVER oz 1,353.83 27.98 2.11%
US Dollar Index 93.38 0.23 0.25%
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: 1,283.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,306.91 1,315.90 1,315.90
1/2 AE 0.50 647.81 659.56 1,319.13
1/4 AE 0.25 327.11 333.76 1,335.06
1/10 AE 0.10 132.13 136.13 1,361.28
Aust. 100 corona 0.98 1,248.94 1,258.38 1,283.80
British sovereign 0.24 300.24 305.74 1,298.82
French 20 franc 0.19 237.29 242.29 1,297.74
Krugerrand 1.00 1,293.80 1,301.80 1,301.80
Maple Leaf 1.00 1,285.80 1,295.80 1,295.80
1/2 Maple Leaf 0.50 651.53 663.93 1,327.86
1/4 Maple Leaf 0.25 327.11 333.76 1,335.06
1/10 Maple Leaf 0.10 132.55 136.90 1,369.02
Mexican 50 peso 1.21 1,536.27 1,548.88 1,284.63
.9999 bar 1.00 1,285.80 1,297.80 1,297.80
SPOT SILVER: 17.00      
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 11,829.68 12,115.68 16.95
US 40% silver 1/2s 0.30 4,836.53 4,984.53 16.90
100 oz .999 bar 100.00 1,674.50 1,727.50 17.28
10 oz .999 bar 10.00 168.45 173.45 17.35
1 oz .999 round 1.00 16.95 17.50 17.50
Am Eagle, 200 oz Min 1.00 18.55 18.95 18.95
SPOT PLATINUM: 932.10      
Plat. Platypus 1.00 930.10 977.10 977.10
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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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