The Moneychanger
Daily Commentary
Wednesday, 8 November a.d. 2017 Browse the commentary archive

Talk about seesaws! Silver & gold did it again today. Since mid-October the gold/silver ratio has five times tried to break through the intertwined 20 & 50 day moving averages, but each time has been beaten back. At some point you have to confess that the ratio's trend is DOWN. Chart's here,

Stocks are edging up by the tiniest margins. Dow rose 6.13 or 0.03% to 23,563.36. S&P500 rose 3.74 (0.14%) to 2,594.38. Look at the chart,

Dow Industrials average has been painfully overbought - RSI reached highest level in 20 years -- it threw over a rising wedge's upper boundary, the advance has continued on dwindling volume, and the MACD has turned down. None of that sounds like a recipe for continuing gains, but what do I now? Maybe it IS different this time? Maybe frogs will grow wings so they won't bump their little butts when they hop.

Dollar index remains clustered & congested below 95. Lost 7 basis points today 90.07%) to 94.75. Want to see the chart?

The falling 10 year Treasury note yield, proxy for interest rates, fell from lat October back to its 200 DMA yesterday. Mark: that came after it broke out upside through resistance from 2007 and through lateral resistance holding since May. I mention this because it is in a rising trend, and today's turnaround at the 200 DMA might mark the correction turnaround.

For what it's worth to all those folks convinced that cryptocurrencies are just as good a hedge as silver & gold, I note that today a "vulnerability" turned up in the wallet service Parity that has frozen hundreds of million dollars worth of Ethereum, second largest crypto currency. Whoops. Second "vulnerability" to appear in 4 months. Last one in July led to around $30 million worth being stolen. I'm so durned ignorant that'ud scare me to death, but I don't know nothinng about technology, cept it seems to speed up stealing mightily.

Platinum & palladium are running crazier than silver. Platinum today vaulted $12.50 to $934.60 but crazy palladium busted through $1,000, adding $21.70 to close at $1,017.20. Wow.

Down 30¢, up 40.1¢, down 29¢, up 20.1¢ -- that describes silver's last 4 days, ending today above 1700¢ again at 1710.6¢. Here's a daily EOD chart,

Within this 1725¢ - 1660¢ range silver has managed to draw out a little uptrend, but today couldn't close above the 200 DMA. Muddled trading. I have to travel to Richmond tomorrow and Friday, so will leave y'all these guidelines: If silver closes below 1660¢, stand back and let it fall. If silver closed through 1727¢ for 2 days, buy that breakout. Should silver shoot past 1750¢ any one day, buy that.

Wow. Gold is no longer trapped beneath its 20 DMA. Looky, looky, Look at the MADC just below the volume: it has turned up. Rate of Change has barely pushed through 0 upwards, and RSI is just above the 50 midline at 50.4. All those are in positive territory, although you have to read them with a microscope.

Here are guidelines. Gold will remain trapped in the $1,300 - $1,662 range unless it breaks down below $1,262 or up through $1,300. Stand aside from the breakdown waiting a few days for gold to establish a bottom. If it closes above $1,300 two days, buy that breakout.

A friend of mine is being ordained in Richmond on Saturday and I am driving up there. It's a 13 hour trip from here, so I am leaving tomorrow. Just can't stand flying. I will return on Monday so will not publish commentaries tomorrow, Friday, or Monday. I'll miss y'all.

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
8-Nov-17 Price Change % Change
Gold, $/oz 1,281.80 8.10 0.64%
Silver, $/oz 17.11 0.20 1.19%
Gold/Silver Ratio 74.933 -0.412 -0.55%
Silver/Gold Ratio 0.0133 0.0001 0.55%
Platinum 934.60 12.50 1.36%
Palladium 1,017.20 21.70 2.18%
S&P 500 2,594.38 3.74 0.14%
Dow 23,563.36 6.13 0.03%
Dow in GOLD $s 380.01 -2.32 -0.61%
Dow in GOLD oz 18.38 -0.11 -0.61%
Dow in SILVER oz 1,377.49 -16.02 -1.15%
US Dollar Index 94.75 -0.07 -0.07%
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: 1,279.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,302.94 1,309.34 1,309.34
1/2 AE 0.50 645.84 659.15 1,318.30
1/4 AE 0.25 329.32 343.17 1,372.69
1/10 AE 0.10 138.12 139.83 1,398.29
Aust. 100 corona 0.98 1,245.15 1,254.56 1,279.90
British sovereign 0.24 299.33 306.24 1,300.93
French 20 franc 0.19 236.57 239.71 1,283.92
Krugerrand 1.00 1,289.90 1,297.90 1,297.90
Maple Leaf 1.00 1,283.90 1,293.90 1,293.90
1/2 Maple Leaf 0.50 649.55 661.95 1,323.90
1/4 Maple Leaf 0.25 326.12 332.77 1,331.08
1/10 Maple Leaf 0.10 132.15 136.50 1,365.00
Mexican 50 peso 1.21 1,531.60 1,544.18 1,280.73
.9999 bar 1.00 1,281.90 1,293.90 1,293.90
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 11,758.18 12,044.18 16.85
US 40% silver 1/2s 0.30 4,836.53 4,984.53 16.90
100 oz .999 bar 100.00 1,689.50 1,727.50 17.28
10 oz .999 bar 10.00 168.45 176.45 17.65
1 oz .999 round 1.00 17.00 17.50 17.50
Am Eagle, 200 oz Min 1.00 18.60 18.95 18.95
SPOT PLATINUM: 934.60      
Plat. Platypus 1.00 932.60 979.60 979.60
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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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