The Moneychanger
Daily Commentary
Thursday, 16 November a.d. 2017 Browse the commentary archive

A reader asks, "Do you think the hyperactivity in cryptocurrencies is having a negative effect on precious metals?"

Can a duck swim? Is a pig's little rear pork? Do politicians lie?

I checked at coinmarketcap.com this afternoon and find that the total market cap for 1,289 cryptocurrencies is $228,351,009,910, a.k.a. $228 billion. Back in the spring it was maybe $100 million. Cryptocurrencies, like the stock market bubble, are sucking in capital like a black hole suckseverything from planets to space dust. I have no doubt this is the case, since I also have head stories of people cashing in silver & gold to buy cryptocurrencies.

One thing that teaches you a lesson you will never forget is losing money. I bought my knowledge the expensive way. In January 1980 I got into the gold and silver scrap buying business. After about a week I figured on the back of an envelope that if this kept up a year, I'd be a millionaire. Whoops. I didn't become a millionaire, because silver & gold were making peaks on parabolic charts. What do I mean? Well, look at this Bitcoin chart, http://bit.ly/2jwGj6w

THAT is a parabolic chart. Now go look at gold 1970-1980, or silver 1970-1980, or stocks 1982-2000, or gold and silver in 2011. Parabolic charts end in tears and breakdown. And both stocks and Bitcoin are in that parabolic move. Hard to predict at what price it ends, but absolutely certain that it ends in weeping, wailing, and wipe-out.

I'm mean enough to fight a circle saw, but I won't fight e'er a parabolic chart.

Today was simply one more agonizing seesaw that resolves nothing, except to say that the stock blow off and gold and silver lethargy are still alive.

US dollar index gained 15 basis points to 93.86, but at its 93.31 low nearly touched the 50 DMA (93.25). Thus today's gain can be attributed to a mere bounce off that line. Dollar's not yet spoiled its chance to rally to 97, but a couple more really bad days will do the job.

Stocks recovered all they lost yesterday and more, and closed above their 20 Day Moving Average. Dow Industrials closed 23,458.36, up 187.08 or 0.8%. S&P500 climbed 21.02 (0.82%) to 2,572.95. Stocks remain the in drawn out process of rolling over earthward.

Ridiculous: gold rose 90¢ to $1,277.40 and silver snatched back 10.6¢ from yesterday's jaws and closed Comex at 1705.6¢.

Gold is locked in the same old range, but closed barely above the 20 DMA. Squeezing down from above -- and squeezing toward some resolution -- is the 50 DMA at $1,292.55. Silver, even higher, offers no change from yesterday. Gold/Silver ratio dropped to 74.894, below the 50 & 20 DMA's, so that's the right direction, but settles no arguments.

Be patient, watch the parade, don't get sucked in. Cryptocurrency & stock bubbles will crack and fugitive money will run to silver and gold for safety.

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
16-Nov-17 Price Change % Change
Gold, $/oz 1,277.40 0.90 0.07%
Silver, $/oz 17.06 0.11 0.63%
Gold/Silver Ratio 74.894 -0.415 -0.55%
Silver/Gold Ratio 0.0134 0.0001 0.55%
Platinum 933.00 3.10 0.33%
Palladium 986.25 0.25 0.03%
S&P 500 2,572.95 21.02 0.82%
Dow 23,458.36 187.08 0.80%
Dow in GOLD $s 379.62 2.76 0.73%
Dow in GOLD oz 18.36 0.13 0.73%
Dow in SILVER oz 1,375.37 2.44 0.18%
US Dollar Index 93.86 0.15 0.16%
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: 1,277.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,297.94 1,320.30 1,320.30
1/2 AE 0.50 651.02 673.88 1,347.76
1/4 AE 0.25 328.70 343.33 1,373.31
1/10 AE 0.10 134.03 139.89 1,398.86
Aust. 100 corona 0.98 1,239.68 1,252.21 1,277.50
British sovereign 0.24 302.98 315.98 1,342.31
French 20 franc 0.19 236.12 240.12 1,286.15
Krugerrand 1.00 1,282.61 1,292.61 1,292.61
Maple Leaf 1.00 1,285.50 1,301.50 1,301.50
1/2 Maple Leaf 0.50 734.56 670.69 1,341.38
1/4 Maple Leaf 0.25 325.76 341.73 1,366.93
1/10 Maple Leaf 0.10 135.42 139.25 1,392.48
Mexican 50 peso 1.21 1,524.75 1,535.75 1,273.74
.9999 bar 1.00 1,281.97 1,289.50 1,289.50
SPOT SILVER: 17.06      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 25.50 33.33
VG+ Peace dollar 0.77 15.00 18.00 23.53
90% silver coin bags 0.72 11,768.90 12,054.90 16.86
US 40% silver 1/2s 0.30 4,840.95 4,990.95 16.92
100 oz .999 bar 100.00 1,686.00 1,721.00 17.21
10 oz .999 bar 10.00 172.10 177.10 17.71
1 oz .999 round 1.00 16.86 17.46 17.46
Am Eagle, 200 oz Min 1.00 18.56 20.06 20.06
SPOT PLATINUM: 933.00      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 948.00 978.00 978.00
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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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