The Moneychanger
Daily Commentary
Thursday, 2 November a.d. 2017 Browse the commentary archive

BEWARE! WARNING! The numismatic boiler rooms are hungry for sales and they are burning up the phone lines with sales pitches. Remember that every sales pitch is designed to make you salivate so yu will buy without thinking.

STOP! Think! Research! Call us and ask.

Calculate the premium on what they are trying to sell you. Generally they quote things in furlongs per fortnight so it's tough to figure out what it really costs. Remember this rule: divide the COST by the NET GOLD CONTENT. So if they are offering a 1/10 ounce coin to you for a cheap $250, it means you are paying ($250/0.1000 =) $2,500 per ounce -- not really a great buy.

Not long ago some salesman called a long-time customer of ours and he checked the prices with us for MS63 US $20 gold pieces (0.9675 oz gold content). By comparing what they were charging to wholesale prices, it was easy to see they were charging a 64% mark-up, versus the 3.5% to 1.5% we charge.

Coins they were selling for $2,187 we could sell for $1,451. Mmmmm.

See what I mean about doing your research? Pretty expensive to omit it.

HEADLINE INDICATOR: It's notorious in markets that whenever you begin seeing headlines about a market breaking to new highs, higher highs expected, etc., that the market isn't far from a top. Yesterday I got an email from Casey Research headlined, "Why Bitcoin could hit $10,000 by January." As my old first sergeant used to say, "A word to the wise is suffice."

Subjective assessments are always perilous, but that dollar index sure seems slothful in rising. After all, it broke out above 94 neckline resistance, ran to the downtrend line, but hath since stalled dead. Subjectively, that feels weak to me, as if buyers are scarce. Look at the chart, though this one is from yesterday, right here, Today it came to work late and clocked out early again, losing 17 basis points (0.18%) to 94.53 (today's bar not shown). Five day chart shows the dollar index range locked between about 94.80 and 94.40.

Breadth keeps shrinking in stocks, that is, fewer and fewer stocks are participating in the rise. The blue chip Dow Industrials rose 81.25 (0.35%) to 23,516.26 but the S&P500 added only a microscopic 0.49 (0.02%) to 2,579.82. Meanwhile the Nasdaq was 0.02% lower and the Nasdaq 100 0.2% lower. Even for the Dow volume is falling. Look here,

Did I leave something out? Oh, yes, shrinking breadth signalleth a top nigh.

I was interrupted yesterday as I was finishing the commentary so didn't coherently close that thought. I was saying that I had my expectations for silver & gold neatly sewn up, expecting a higher dollar and lower silver & gold into mid-November, then yesterday knocked that in the head. Yet look at the 5 day chart and you'll see that $1,280 and 1720¢ stand like a stone wall.

Today Comex gold rose -- wait, wait -- eighty cents, to $1,274.90. Silver razored off 3.8¢ to end at 1709.4¢. Gold silver ratio rose slightly from 74.437 to 74.582.

Alas, this action telleth naught, revealeth naught, save that we are stuck in a trading range, and underneath $1,280 and 1720¢. Silver & gold are blowing hot & cold out of both sides of their mouth, like the parricide who threw himself on the mercy of the court because he was an orphan.

Not enough to act on here. Just have to watch & cultivate patience.

I was thinking today about one of Susan's favorite pastimes. The Shoe, our three story log house -- basement, first, and second floors -- has a screened porch on every floor. Since the ground drops sharply away from the front of the house, the first floor back deck is up in the trees. Early Evenings before I got home, Susan used to love to sit there and write letters to God. She literally wrote out her prayers as she prayed. Unfortunately, she wasn't very conscientious about keeping them in one book, so after she died I found pages scattered everywhere.

But I tell the story with a point in mind. You can't imagine a person who kept busier than Susan. Yet she had the good sense to know she had to stop and spend time with God, and she made time to do that, with gusto and joy.

I wish I had her good habits.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
2-Nov-17 Price Change % Change
Gold, $/oz 1,274.90 0.80 0.06%
Silver, $/oz 17.09 -0.04 -0.22%
Gold/Silver Ratio 74.582 0.212 0.29%
Silver/Gold Ratio 0.0134 -0.0000 -0.28%
Platinum 924.10 -8.90 -0.95%
Palladium 995.40 -4.15 -0.42%
S&P 500 2,579.82 0.49 0.02%
Dow 23,516.26 81.25 0.35%
Dow in GOLD $s 381.30 1.08 0.28%
Dow in GOLD oz 18.45 0.05 0.28%
Dow in SILVER oz 1,375.70 7.79 0.57%
US Dollar Index 94.53 -0.17 -0.18%
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: 1,276.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,294.47 1,305.96 1,305.96
1/2 AE 0.50 644.18 657.45 1,314.90
1/4 AE 0.25 328.47 342.29 1,369.15
1/10 AE 0.10 137.76 139.47 1,394.69
Aust. 100 corona 0.98 1,241.94 1,251.32 1,276.60
British sovereign 0.24 298.56 305.46 1,297.63
French 20 franc 0.19 235.96 239.09 1,280.62
Krugerrand 1.00 1,286.60 1,294.60 1,294.60
Maple Leaf 1.00 1,280.60 1,290.60 1,290.60
1/2 Maple Leaf 0.50 647.87 660.27 1,320.55
1/4 Maple Leaf 0.25 325.28 331.93 1,327.71
1/10 Maple Leaf 0.10 131.81 136.16 1,361.59
Mexican 50 peso 1.21 1,527.65 1,540.20 1,277.43
.9999 bar 1.00 1,278.60 1,290.60 1,290.60
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 11,969.10 12,326.60 17.24
US 40% silver 1/2s 0.30 4,879.30 5,027.30 17.04
100 oz .999 bar 100.00 1,704.00 1,742.00 17.42
10 oz .999 bar 10.00 169.90 177.90 17.79
1 oz .999 round 1.00 17.14 17.64 17.64
Am Eagle, 200 oz Min 1.00 18.74 19.09 19.09
SPOT PLATINUM: 924.10      
Plat. Platypus 1.00 922.10 969.10 969.10
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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.

Other Important Information

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