The Moneychanger
Daily Commentary
Wednesday, 24 January a.d. 2018 Browse the commentary archive

Secretary Munchkin lit the fireworks today for the US Dollar Index when he said at the Davos Establishment Talky-talk that he welcomed the dollar's weakness. Naturally markets interpreted that as meaning "We've been letting it fall & will let it fall more," and promptly sold more dollars, driving the dollar index lower like a miner entering the bowels of the earth. It lost 83 bps (0.92%) to 89.04, and has not stopped yet.

But look at this 6 month dollar index chart, http://schrts.co/ubAEGL Did anybody need Munchkin to point out the dollar has broken down? Or look at a 3-year chart, where you see the dollar index has fallen out of the crocodile jaws, http://schrts.co/cVHQbh Twill sank to the muck at the bottom of the swamp..

Meanwhile the Euro has posted two runaway gaps and leapt 0.89% today to $1.2410. Chart is instructive, http://schrts.co/cVHQbh Nor has the yen failed to profit from the dollar's woes, http://schrts.co/UuqBFa

And obvious at it may be, I point out that when the dollar falls, the price of everything in dollars must be re-rated upward: gold, silver, oil, commodities. Ponder. Weigh. Meditate. Extend. Apply.

Stocks, however, were bewildered & gainsaid each other. Dow Industrials rose 41.31 (0.16%) to 26,252.12, but the S&P500 fell 1.59 (0.06%) to 2,837.54. Nasdaq fell 0.61%, Nasdaq 100 lost 0.63%, Russell 2000 lost 0.69%.

CME Bitcoin futures were strangely quiet today, up $20 (0.18%) to $11,150. Coindesk.com right now shows $11,106.64, up $266.81 or 2.46%.

My bright foreboding about gold and silver yesterday was revealed to be true today. Upward they burst their bounds like a mighty kangaroo, or leaping lark, or some high springing thing. Comex gold bounded $20.20 (1.5%) to $1,355.90 and silver added a gargantuan 3.4% or 57¢ to 1742.5¢. Both burst thru resistance.

Now gold, http://schrts.co/bCv6RU Gold hit a high at $1,360.90, nearly though that resistance, but then backed off a little bit. I remind y'all, that purple line of resistance about $1,360 stretches back to 2,013. It has stopped gold for five years, and now 'tis about to crack. Look at the RSI and the MACD, pointing up. And today's rise went hand in hand with huge volume. Nothing fake about this move.

Ahh, silver, http://schrts.co/o96FnV RSI Jumped up as did the MACD & volume. Look at that stretch silver made, nearly from the 200 DMA, through 1725¢ -1735¢ resistance! Now we have silver in synch with gold, and gold ready to smash five year resistance.

Y'all, it don't get much better than this. Thank you, Secretary Munchkin, for the catalytic words.

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
24-Jan-18 Price Change % Change
Gold, $/oz 1,355.90 20.20 1.51%
Silver, $/oz 17.43 0.57 3.38%
Gold/Silver Ratio 77.813 -1.433 -1.81%
Silver/Gold Ratio 0.0129 0.0002 1.84%
Platinum 1,013.30 8.00 0.80%
Palladium 1,109.00 22.10 2.03%
S&P 500 2,837.54 -1.59 -0.06%
Dow 26,252.12 41.31 0.16%
Dow in GOLD $s 400.23 -5.41 -1.33%
Dow in GOLD oz 19.36 -0.26 -1.33%
Dow in SILVER oz 1,506.58 -48.50 -3.12%
US Dollar Index 89.04 -0.83 -0.92%
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: 1,356.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,360.87 1,372.87 1,372.87
1/2 AE 0.50 691.46 715.71 1,431.42
1/4 AE 0.25 349.12 364.64 1,458.56
1/10 AE 0.10 142.36 148.57 1,485.70
Aust. 100 corona 0.98 1,316.64 1,327.64 1,354.45
British sovereign 0.24 321.79 334.79 1,422.20
French 20 franc 0.19 250.78 254.78 1,364.66
Krugerrand 1.00 1,360.87 1,371.87 1,371.87
Maple Leaf 1.00 1,364.80 1,380.80 1,380.80
1/2 Maple Leaf 0.50 780.16 712.32 1,424.64
1/4 Maple Leaf 0.25 345.98 362.94 1,451.78
1/10 Maple Leaf 0.10 143.82 147.89 1,478.91
Mexican 50 peso 1.21 1,619.40 1,631.40 1,353.07
.9999 bar 1.00 1,351.80 1,369.80 1,369.80
SPOT SILVER: 17.50      
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 11,976.25 12,262.25 17.15
US 40% silver 1/2s 0.30 4,970.75 5,117.75 17.35
100 oz .999 bar 100.00 1,730.00 1,765.00 17.65
10 oz .999 bar 10.00 176.50 181.50 18.15
1 oz .999 round 1.00 17.30 17.90 17.90
Am Eagle, 200 oz Min 1.00 18.75 19.50 19.50
SPOT PLATINUM: 1,013.30      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,028.30 1,058.30 1,058.30
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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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