The Moneychanger
Daily Commentary
Monday, 22 January a.d. 2018 Browse the commentary archive

If I'uz runnin' that yankee gummit, I'd stay right shy of them gummint shutdowns. Might be they shut the gummint down a few days, and ever'body might look around and say, "Wait a minute. Things are going jes fine. What do we need that blamed gummint for anyway?"

Stocks took news the government would not be shutting down as last half of the day good news Dow shot up 142.88 (0.5%) to a new all time high at 26,214.60. Nor did the S&P500 lag, but soared even higher, up 22.67 (0.81%) to 2,832.97. Forgive me, I repeat myself, but this is a bubble & there's no naming where it will stop. Look at the Dow Industrials' chart,

Musing thereupon, I looked at the Dow in Gold chart, From that post-2011 correction high at 19.73 oz on 12 December (same day gold price-bottomed) the Dow in Gold plunged to the 50 day moving average at 18.86, then began to rally again. At 19.68 oz today, it has almost made a double high with that December high. If it doesn't stop here, it will likely climb to 20.67 oz where it would complete a 38.2% correction of the 1999-2011 rise.

After closing Friday at 90.48, the dollar index fell out of bed again today. Lost 34 basis points (0.45) to close at 90.14. Making new lows lately and chart here, suggests it will make lower lows still. A rise above 91 would temporarily gainsay that.

Ten year T-note yield right here, shows that interest rates are still rising. It made a fresh 3 year high today. Rising rates are wounding the US 30 Year T-bond, and ain't helping junk bonds,

CBOE Bitcoin Futures lost $1,05.00 (9%) to $10,170.00. currently shows Bitcoin down $1,140.04 or 9.9% to $10,382.82. Maybe it will stage a rally, but as is it has traded below its December low to create a series of lower lows and lower highs. Chart's here,

Comex gold backed off $1,000 to $1,330.90 while Silver shaved off 4.4¢ to 1693.1¢.

Nothing in the sideways travel on the five day charts suggests that silver and gold are preparing to rise. In fact, the longer anything hovers, the more likely it is to drop. Gravity never takes a holiday.

Chart shows gold trampling on the uptrend line and today closing beneath it, That's not immediately fatal, but doesn't promise happy days ahead, either. Gold must labor & travail to get through that $1,360 resistance above.

Silver has done trampled clean through the uptrend line and is sliding along its 200 day moving average. Look for yourself, Can't see why it wouldn't drop toward that 50 DMA about 1670¢, given that it can't stay over 1700¢ like a man. Understand, a silver and gold correction here would STRENGTHEN them, and set the platform of the next leg up.

Here in Tennessee we just ain't set up for terribly cold weather. Last Tuesday night about 10 I got in my car and it was seven degrees. When it gets cold like that you can hear pipes bursting all over town. And my three Hereford sows were miserable. Laid up someplace in the holler in a pig pile to keep warm, they wouldn't even come up to eat when I called. I don't know how they survive, but they do. They were there right on time this morning, though. Weather flip-flopped and was nearly 60 degrees yesterday, warm and rainy today. I reckon its that global warming that's causing all these deep freezes. Ain't that right, Al Gore? (I hate to say it, but I ain't just rip-roaring' proud of everybody who comes from Tennessee.)

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 0.44%
Silver, $/oz 16.98 0.08 0.49%
Gold/Silver Ratio 78.462 -0.032 -0.04%
Silver/Gold Ratio 0.0127 0.0000 0.04%
Platinum 1,016.20 -21.90 -2.11%
Palladium 1,101.05 -6.10 -0.55%
S&P 500 2,810.30 12.27 0.44%
Dow 26,071.72 53.91 0.21%
Dow in GOLD $s 404.65 -0.96 -0.24%
Dow in GOLD oz 19.57 -0.05 -0.24%
Dow in SILVER oz 1,535.89 -4.26 -0.28%
US Dollar Index 90.48 0.18 0.20%
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: 1,329.90      
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      
Plat. 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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