The Moneychanger
Weekly Commentary
Friday, 1 December a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  22-Nov-17 1-Dec-17 Change % Change
Silver, cents/oz. 1,710.10 1,629.70 -80.40 -4.7
Gold, dollars/oz. 1,291.60 1,278.80 -12.80 -1.0
Gold/silver ratio 75.528 78.468 2.941 3.9
Silver/gold ratio 0.0132 0.0127 -0.0005 -3.7
Dow in Gold Dollars (DIG$) 376.53 391.70 15.17 4.0
Dow in gold ounces 18.21 18.95 0.73 4.0
Dow in Silver ounces 1,375.72 1,486.87 111.15 8.1
Dow Industrials 23,526.18 24,231.59 705.41 3.0
S&P500 2,597.08 2,642.22 45.14 1.7
US dollar index 93.14 92.84 -0.30 -0.3
Platinum 937.60 939.40 1.80 0.2
Palladium 1,003.35 1,020.05 16.70 1.7

Since the Friday after Thanksgiving is a thin unreliable trading day, I'm comparing this Friday's prices to the day before thanksgiving.

It was a big week for stocks, and a rotten week for gold & silver. Bitcoin may have broken this week, but that remains to be proven. Stocks are just a-hummin', straight up. (That's a warning, not a compliment).

Here's a Bitcoin chart for one month, http://bit.ly/2i7nnHx Without everybody going all frothy on me, Let's look at it objectively. On 29 November it surged to $11,155.20, a new intraday high, but collapsed and closed lower that the previous day at $10,600.27. On 30 November it closed lower again at $10,567.80. Today it is trading around $10,800.

Three possibilities:

1. It was a key reversal and it will immediately fall further.

2. It was not a key reversal and it will close above the 29 November high to prove it.

3. It was that break in a market that produces a double top as a peak, with the second top either slightly lower or slightly higher than the first, followed by a sharp collapse.

Remember, Bitcoin is in a parabolic rise bubble, so no one can predict where this blow off paroxysm will reach.

Pillars in the arguments for Bitcoin seem crumbling. It's supposed to offer safety, but since 2010 26 hacks have stolen $640 million worth of Bitcoin. I'm guessing the FDIC didn't cover those losses, nor the exchanges they were hacked from. Then on 28 November in California a federal court rendered a decision in the case of US v. Coinbase, a Bitcoin exchange. The IRS had summoned Bitcoin customer records from Coinbase and Coinbase refused. In this decision the court ordered Coinbase to turn over 14,355 customer records to the IRS. I reckon that knocks a hole in Bitcoin's "anonymity."

Here's my unofficial survey for my readers who want to answer. Send me an email BRIEFLY listing your reasons for buying Bitcoin, if you have done so. Send it to franklin@the-moneychanger.com.

The US dollar index, foul vampire on the world's economy, ain't doing so hot. Look, http://schrts.co/w7L2HH After spending half of July, August, September, and October tracing an upside-down head & shoulders, it broke out upside in late October with a target of 97. However, it stalled after the breakout, and tumbled back to the level of the shoulders. Dollar index can't be ruled down for the count until it closes below the head, but for now it appears even weaker than I thought it was.

Last three days have relentlessly fallen. Today it lost another 12 basis points (0.13%) to 92.84.

Stocks exploded to a new all-time high yesterday. Dow rose 331.67 to 24,272.35, but today fell back 40.76 (0.13%) to 24,231.59.

Look at the S&P500 chart, http://schrts.co/vtdPMb Yesterday the S&P500 gobbled up 21.51 (0.82%) to 2,647.58, but today gave back 5.36 (0.2%) to close at 2,642.22. Looks a little odd that in today's trading at the intraday low, the S&P500 had given up the gains of the previous three days. Still, a breakout is a breakout unless it is unequivocally reversed. S&P500 would have to close below the 20 day moving average (2,597) even to think about reversing. Yet look at how overbought the RSI (above) is. But no proof yet even of an intention to reverse.

Interest rates are trying to break out of the line that has held them captive since May, the purple one on this chart, http://schrts.co/NyR7c4 After yesterday's upside breakdown they were knocked back. Next time they will penetrate.

Silver's weakness this week shoved the gold/silver ratio up to 78.468 today. See http://schrts.co/yVax7E The higher ratio calls for lower gold and silver prices and may also signal they are reaching the wash out phase of their decline. If the ratio rises above 80, we would again look for gold to swap for silver, targeting a swap back into gold when the ratio falls below 32:1.

Today Comex gold rose 0.4% or $5.60 to $1,278.80. Silver lost 8.5¢ (0.5%) to 1629.7¢ & made another new low for the move.

Y'all ponder silver first, http://schrts.co/o96FnV That breach of the lower (yellow) range boundary sent silver sinking like your wife's wedding ring over the side of the Queen Mary. That diagonal red line stretches back to the July 2016 high. I remind y'all that silver this year broke through that line UPward, although instead of making good that escape, it has since slid down that line. That leads me to expect this line will catch silver's fall about 1610¢, although it might, as in early October, spike briefly through that line. Otherwise, it will revisit 1568¢.

Now y'all turn to gold, http://schrts.co/zzdHS3

Since gold crossed above its 200 DMA in July the 200 DMA has acted as a safety net, catching gold every time it fell. Right now it stands at $1,268. If the 200 DMA doesn't catch gold this time, it's most likely resting place is $1,210-1,220 where the green uptrend line from the December 2015 low will catch it.

Face it: until the bubbles in stocks & Bitcoin burst, there will be little interest in silver & gold. Unrealistic gains in these markets have charmed investors like a snake charmer mesmerizes a cobra. Be patient, be patient. All shall be well.

On 1 December 1824 the House of Representatives voted to end the deadlocked electoral collage. They gave the presidency to John Quincy Adams and shut out Andrew Jackson.

Y'all enjoy your weekend.

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
1-Dec-17 Price Change % Change
Gold, $/oz 1,278.80 5.60 0.4
Silver, $/oz 16.30 -0.09 -0.5
Gold/Silver Ratio 78.468 0.348 0.4
Silver/Gold Ratio 0.0127 -0.0001 -0.5
Platinum 939.40 -1.90 -0.2
Palladium 1,020.05 14.00 1.4
S&P 500 2,642.22 -5.36 -0.2
Dow 24,231.59 -40.76 -0.2
Dow in GOLD $s 391.70 -2.34 -0.6
Dow in GOLD oz 18.95 -0.11 -0.6
Dow in SILVER oz 1,486.87 5.23 0.4
US Dollar Index 92.84 -0.12 -0.1
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: 1,279.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,299.87 1,322.26 1,322.26
1/2 AE 0.50 651.98 674.88 1,349.77
1/4 AE 0.25 329.19 343.84 1,375.36
1/10 AE 0.10 134.23 140.09 1,400.94
Aust. 100 corona 0.98 1,241.53 1,254.07 1,279.40
British sovereign 0.24 303.43 316.43 1,344.22
French 20 franc 0.19 236.48 240.48 1,288.03
Krugerrand 1.00 1,283.24 1,293.24 1,293.24
Maple Leaf 1.00 1,287.40 1,303.40 1,303.40
1/2 Maple Leaf 0.50 735.66 671.69 1,343.37
1/4 Maple Leaf 0.25 326.25 342.24 1,368.96
1/10 Maple Leaf 0.10 135.62 139.45 1,394.55
Mexican 50 peso 1.21 1,527.02 1,538.02 1,275.62
.9999 bar 1.00 1,283.88 1,291.40 1,291.40
SPOT SILVER: 16.38      
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 11,279.13 11,565.13 16.18
US 40% silver 1/2s 0.30 4,638.88 4,788.88 16.23
100 oz .999 bar 100.00 1,617.50 1,652.50 16.53
10 oz .999 bar 10.00 165.25 170.25 17.03
1 oz .999 round 1.00 16.18 16.78 16.78
Am Eagle, 200 oz Min 1.00 17.88 19.38 19.38
SPOT PLATINUM: 939.40      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 954.40 984.40 984.40
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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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