The Moneychanger
Weekly Commentary
Wednesday, 17 January a.d. 2018 Browse the commentary archive
Here's the weekly scorecard:
  12-Jan-18 17-Jan-18 Change % Change
Silver, cents/oz. 1,706.90 1,697.50 -9.40 -0.6
Gold, dollars/oz. 1,333.40 1,331.90 -1.50 -0.1
Gold/silver ratio 78.118 78.462 0.344 0.4
Silver/gold ratio 0.0128 0.0127 -0.0001 -0.4
Dow in Gold Dollars (DIG$) 400.03 404.65 4.62 1.2
Dow in gold ounces 19.35 19.57 0.22 1.2
Dow in Silver ounces 1,511.70 1,535.89 24.19 1.6
Dow Industrials 25,803.19 26,071.72 268.53 1.0
S&P500 2,786.24 2,810.30 24.06 0.9
US dollar index 90.59 90.48 -0.11 -0.1
Platinum 991.20 1,016.20 25.00 2.5
Palladium 1,108.00 1,101.05 -6.95 -0.6

'Twas a good week for stocks but not so good for silver & gold, until you think about it twice. Dollar index ended down for the week, but that's not quite as bad as it looks. Platinum closed at its highest price since September, and palladium is just running hog wild -- hit a new all time high this week. Bitcoin ain't thriving so well.

CME Bitcoin futures closed $11,360.00, down today $455 or 3.9%. shows Bitcoin at $11,244.79, off $5.86 (?) or 0.05%. For the week Bitcoin CME futures skidded $2,585.00 or 18.5%. Chart says all,

US dollar index, scrofulous spawn of the Federal Reserve, has found feet at 90, so a little rally is due, followed by more tumbling. 2018 doesn't look to be a great year for the dollar. Chart:

Yen has broken out of a downtrend from last April. Look, Euro is also rarin' and pitching' and tearing up the sod: Merciful heavens! That euro chart looks as overbought as the Dollar index is oversold. More evidence for a coming countertrend correction in both.

10 year US T-note yield hit a three year high today. Go look, Y'all are going to get tired of hearing me say, This is a big deal affecting every asset in the economy as well as the operation thereof. Junk bonds are starting to crack, too: Rising interest rates will be the big story of 2018.

After a rough day yesterday, silver & gold bounced back today. Comex silver rose 8.2¢ to 1697.5¢. Gold added $5.90 to $1,331.90. Gold/Silver ratio ended at 78.462.Yesterday silver had plunged 21.2¢ and gold $12.00.

Yea, that's rotten that both finished the week lower, but also worth noting that they couldn't be broken. Yes, yes, this is a half-hearted compliment like, "He don't run too bad for a three-legged mule," but look at the charts.

Gold first:

See where gold tripped yesterday, but didn't really break that green uptrend line? Not bad. And on the five day chart gold has double bottomed Wednesday and Thursday just about $1,325. However, the MACD indicator is trying to turn down, so gold probably isn't out of the woods yet. And there's always the objection that "It didn't close over $1,340." (I ought to have been a PROFESSIONAL worrier.)

Silver's chart breached the uptrend line and the MACD has turned down (black line under red line). On the other hand, silver has bounced up off its 200 day moving average (1694¢) and volume is shrinking as it declines. Five day chart shows two lows/double bottom about 1689¢. I'd feel easier if they both simply dropped to their 50 DMAs and cleared the stage for another leg up, but unfortunately I am not the choreographer for this musical.

Back away from the picture and look at the long term. Since December 2015 silver & gold have been slogging, tramping, and laboring higher. Both are nearing critical levels ($1,360 & 2100¢) where they will prove a rally beyond all dispute. Both will rise much higher in 2018.

Lat night I was down north of Montgomery speaking. My son has been looking for a Great Pyrenees dog to leave with our sheep because Minnie, our present dog, lost a leg a couple of years ago. Much as I love her, a 3-legged sheepdog ain't much good in a coyote fight. These dogs bond to whatever they're raised around in the first few months, and will protect that to the death the rest of their lives. Unfortunately, the many dogs we have tried have all bonded to my grandchildren. They remain hale and hearty, but the sheep ain't doing so well.

So Justin found a 6 month old Pyrenees who had never been with anything but sheep, and since I was going to be roughly in the same state anyway, asked me to pick up the pup. She was only a short 2-1/2 hour drive. Not quite in Georgia, but you could see it from her farm.

Fastidious about my 2011 Honda Ridgeline Pickup (leather seats), I covered the back seat with a pet tarp after putting down a shower curtain on the floor. Somewhat unadvisedly, the seller fed the pup this morning. That really didn't create any problem, as she had no problem at all puking it all up onto my seat, & I discovered that puppy puke hardly smells at all. Fortunately she didn't vomit until after we had been in the car two hours of a four hour leg.

Clearly, this dog, sweet as she is, has a problem with carsickness. I just hope she ain't allergic to sheep.

Y'all enjoy your weekend.

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
19-Jan-18 Price Change % Change
Gold, $/oz 1,331.90 5.90 0.4
Silver, $/oz 16.98 0.08 0.5
Gold/Silver Ratio 78.462 0.344 0.4
Silver/Gold Ratio 0.0127 0.0001 0.5
Platinum 1,016.20 11.20 1.1
Palladium 1,101.05 5.00 0.5
S&P 500 2,810.30 12.27 0.4
Dow 26,071.72 53.91 0.2
Dow in GOLD $s 404.65 -0.92 -0.2
Dow in GOLD oz 19.57 -0.04 -0.2
Dow in SILVER oz 1,535.89 -4.26 -0.3
US Dollar Index 90.48 0.18 0.2
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SPOT GOLD: 1,329.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,335.22 1,374.45 1,374.45
1/2 AE 0.50 677.74 701.52 1,403.04
1/4 AE 0.25 342.19 357.41 1,429.64
1/10 AE 0.10 139.53 145.62 1,456.24
Aust. 100 corona 0.98 1,290.53 1,303.57 1,329.90
British sovereign 0.24 315.41 328.41 1,395.10
French 20 franc 0.19 245.81 249.81 1,338.03
Krugerrand 1.00 1,336.55 1,346.55 1,346.55
Maple Leaf 1.00 1,337.90 1,353.90 1,353.90
1/2 Maple Leaf 0.50 764.69 698.20 1,396.40
1/4 Maple Leaf 0.25 339.12 355.75 1,422.99
1/10 Maple Leaf 0.10 140.97 144.96 1,449.59
Mexican 50 peso 1.21 1,587.29 1,598.29 1,325.62
.9999 bar 1.00 1,324.90 1,342.90 1,342.90
SPOT SILVER: 16.96      
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 11,625.90 11,911.90 16.66
US 40% silver 1/2s 0.30 4,811.45 4,958.45 16.81
100 oz .999 bar 100.00 1,676.00 1,711.00 17.11
10 oz .999 bar 10.00 171.10 176.10 17.61
1 oz .999 round 1.00 16.76 17.36 17.36
Am Eagle, 200 oz Min 1.00 18.21 18.96 18.96
SPOT PLATINUM: 1,016.20      
Platinum Platypus 1.00 1,031.20 1,061.20 1,061.20
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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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