Friday, October 21, 2016

Silver and Gold Prices are Firmly Pointed Skyward

Here's the weekly scorecard:
14-Oct-1621-Oct-16Change% Change
Silver Price, cents/oz.1,739.301,744.805.500.3
Gold Price, dollars/oz.1,253.101,265.9012.801.0
Gold/silver ratio72.04672.5530.5070.7
Silver/gold ratio0.01390.0138-0.0001-0.7
Dow in Gold Dollars (DIG$)299.22296.31-2.91-1.0
Dow in gold ounces14.4714.33-0.14-1.0
Dow in Silver ounces1,042.861,039.99-2.87-0.3
Dow Industrials18,138.3818,145.717.330.0
US dollar index98.0098.600.600.6
Platinum Price935.90928.60-7.30-0.8
Palladium Price647.25619.70-27.55-4.3
21-Oct-16PriceChange% Change
Gold Price, $/oz1,265.900.300.0
Silver Price, $/oz17.45-0.05-0.3
Gold/Silver Ratio72.5530.0190.0
Silver/Gold Ratio0.0138-0.0000-0.3
Platinum Price928.60-2.60-0.3
Palladium Price619.70-12.10-1.9
S&P 5002,141.16-0.18-0.0
Dow in GOLD $s296.31-0.31-0.1
Dow in GOLD oz14.33-0.02-0.1
Dow in SILVER oz1,039.992.260.2
US Dollar Index98.600.370.4
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:1,265.00
American Eagle1.001,299.161,307.381,307.38
1/2 AE0.50644.64667.291,334.58
1/4 AE0.25325.48339.971,359.88
1/10 AE0.10132.72138.521,385.18
Aust. 100 corona0.981,232.511,241.511,266.59
British sovereign0.24300.01313.011,329.71
French 20 franc0.19233.81237.811,273.77
Maple Leaf1.001,275.001,289.001,289.00
1/2 Maple Leaf0.50727.38664.131,328.25
1/4 Maple Leaf0.25322.58338.391,353.55
1/10 Maple Leaf0.10134.09137.891,378.85
Mexican 50 peso1.211,515.931,526.931,266.43
.9999 bar1.001,269.431,277.001,277.00
VG+ Morgan $B4 19050.7725.0027.0035.29
VG+ Peace dollar0.7720.0022.0028.76
90% silver coin bags0.7213,181.0313,467.0318.84
US 40% silver 1/2s0.304,966.335,116.3317.34
100 oz .999 bar100.001,728.501,763.5017.64
10 oz .999 bar10.00176.35181.3518.14
1 oz .999 round1.0017.2917.7917.79
Am Eagle, 200 oz Min1.0018.9920.4920.49
Platinum Platypus1.00943.60973.60973.60

This feels like Sitzkrieg, that first 8 months in World War II when war had been declared, but nobody moved. There's an eerie silence, a degenerating calm, the shells have not yet started falling. Yesterday Fred Reed said the choice between Hillary and Trump was the choice between a bad acid trip and death by sinus drainage. The world and markets aren't facing nice choices. They're holding their breath. At some point, hammers will fall. 

This weeks stocks finished slightly better than unchanged, but still lost ground. Dollar index finally launched an (almost) believable rally. In spite of dollar strength SILVER and GOLD PRICES are trying to rally. 

First, the scrofulous, scabrous US dollar index, loathsome bloodsucker on the necks of nations. 23 month chart lies here, 

Chart's ambiguous, because it is a trading range occurring after a long rise (from Summer 2014). This trading range may signify a consolidation, an area where a market catches breath before continuing, or a reversal. Dollar index has two strikes against it, those double tops in March 2015 and December 2015. I pass over with a nod and jut of chin that lower top in February 2016, which begs to be called a failed attempt at a third top. Leave that alone for now. 

The trading range has been roughly halved by resistance around 98. Observe how many failures have occurred there. Aha -- this time the dollar index has broken through 98. Today it gained 37 basis points to close at 98.60. Wow. Does that mean it will crash through resistance at 100, where the 2015 double tops stopped? 

Can't tell you, but the general rule is there ain't no such thing as triple tops or triple bottoms. Third time a market hits, it breaks through. Hence if the dollar intends to rally, it will shoot through 100 and head for 120 (sounds crazy, but the 2014 rally began about 80. 120 would be symmetrical.) 

That's not a prediction, it's a possibility. On the other hand, if the dollar index fails above 98 yet again, then we can probably reckon with a fall through the range's bottom. 

I don't believe the Fed can afford to let the dollar run to 120 while it chokes on a tsunami of money flooding into the dollar. US exports die and all sorts of other problems pop up. 

But what do I know, a nat'ral born durned fool from Tennessee? What kind of central banker would I make, in overalls and shoeless at them fancy IMF parties with all them furriners? Shoot, they eat fish eggs at them shindigs. And they ain't even devilled. What kind of fool am I, critizizing my central bank betters! Why, some of them have stolen more money in a day than I'll make in a lifetime! 

Here's the short and sweet on stocks: if you ain't moving forward, you're sliding backward. Look at the Dow chart, 

Looks like icicles meltin' off a steep roof, don't it? Been meltin' since that August high. Volume rises on the falls. Downtrend established. To expect higher prices out of this chart is the triumph of self-delusion over realism.

Dow today dropped 16.64 (0.09% to 18,145.71. S&P lost a tee-tiny 0.18 to 2,141.16. 
Gold today rose 30 cents (get out your jeweler's loupe) to $1,265.90. Silver backed off 5.4¢ to 1744.8¢. 
Gold chart lies here, 

The infant rally has touched back to the 200 day moving average, and today was knocked through it but recovered to close above. All indicators point up. We might get another scare around election time, confusion no matter which teenager is "elected," but that will be the last of any weakness we'll see the rest of this year. Fed will raise interest rates in December if and when frogs grow wings so they don't bump their little bottoms when they jump. Central banking is on the run, and gold will benefit. 

Silver's chart is right here, 

Same process is taking place that you see on gold's chart, all indicators pointing up. Higher prices coming. 
With the exception of that threat of instability around election day, SILVER & GOLD PRICES are firmly pointed skyward. I didn't give you charts for it today, but interest rates are rising, and, listen to my words, they will unravel the whole world's sweater. 

I opened this commentary to see that on Friday, 7 October I had dashed out of here to help Susan with a punctured tire. She made it home, but in the morning nothing I & my grandson could do would move the lug nuts. We tried to plug it, but the cut was so wide it still leaked. We had to attend a picnic an hour away, so left the car and asked my son, Zachariah the Mechanic, to change it and put on the donut spare. Went to the picnic, came back & picked up Susan's pickup at Zach's. As we headed home in separate cars, she waved me on & told me she was going by the farm to pick up ground beef for supper. We were having overnight guests we had never met, with four young children. 

Not ten minutes after I arrived at our house (The Shoe) and was talking to our guests, here comes a text from Susan: "Have punctured another tire!" She had to trudge up the hill to get a signal out of that dark holler. 

When I arrived here donut spare was worthless. I told her to just back the car up, lock it, & leave it. She did, but when she stepped out of the car in the boots she had lovingly polished that morning, she stepped ankle deep into a cowpie. Had it been me, I'd have laid down on the side of the road and given up. Two punctures and a cowpie is my limit. Instead, she tried to clean off her boot on the grass -- "Get in the car, Hon, I've got rubber mats, it's okay." At home she speedily washed off the offending boot, then went inside, made folks she had never before laid eye on feel welcome as Queen Elizabeth at Windsor Castle, fixed supper for everyone, and smiled. 

That's what the love of God overflowing from your heart can do. 

Y'all enjoy your weekend.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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