PM Daily Market Commentary - 8/9/2016

davefairtex
By davefairtex on Wed, Aug 10, 2016 - 3:27am

Gold rose +5.40 to 1341.70 on light volume, while silver rose +0.11 to 19.87 on moderately light volume. 

Gold printed a two-candle swing low today; that wasn't too hard given the small doji candle from yesterday, and my candle code gave it a relatively low grade (23-40%) but it is a positive sign.  The rally was not enough to carry gold back above its 9 EMA, and the volume was light.  Still, if the buck actually manages to reverse, I'd expect gold to be able to regain the 9 EMA fairly easily.

Gold open interest dropped by -3,682 contracts today.  I believe the commercials continue to put a floor under any corrections.

Silver was not able to print a swing low today, missing by just a few pennies.  Like gold, silver remains below its 9 EMA, and today's volume was relatively light.  Silver is not out of danger yet; I expect the sellers to appear as price rises to meet the 9 EMA.

Miners moved higher, with GDX up +0.85% on very light volume, while GDXJ was up +0.96% on moderate volume.  Neither rally was particularly exciting, but the trend on the miners continues to be up.  That 3% drop we experienced on Friday is slowly being bought.   The volume pattern over the past few days has been one of light up-day volume and heavy down-day volume.  That's generally bearish - if we see any more big volume down days, it will be a cause for concern.

Platinum rose +0.39%, palladium climbed +0.15%, and copper fell -0.69%, falling below its 9 MA.  Copper continues to move lower; it is in its fourth week of decline.

The USD fell -0.21 to 96.10, losing all of yesterday's rally but still managing to remain just above its 9 EMA.  The buck is in a sort of of no-mans-land, below the 200 MA and above the 50, seemingly unsure if it will rise or fall.  The follow-on from payrolls was wiped out by today's move lower.  The market appears to be viewing the payrolls report as either an anomaly, or it is not any sort of motivation for the Fed to raise rates.  That's gold positive.

WTIC took a break today, falling -0.12 to 42.75, printing a bearish harami candle pattern.  This one isn't particularly bearish (15-20% chance of marking the top).  The API report showed a bearish build in oil inventories - this is in advance of the official petroleum status report due out tomorrow at 10:30 ET, which tends to set the tone for oil prices for the following week.  The uptrend is fairly new, but I'm going with the COT report which is bullish for oil prices.

SPX rose +0.85 to 2181.74, setting a new all time intraday high (2187.66) in the morning but then giving most of it back after lunch.   It was a pretty quiet day.  VIX rose +0.16 to 11.66.

TLT was bought all day long, up +0.98%.  TLT is now back above its 9 EMA.  While it remains in its rough descending triangle, it is now threatening to break out to the upside.  Risk off.

JNK climbed +0.33% to 36.36 printing yet another new high.  It is 40 cents away from its all time high, and is quite close to its previous high at 36.50.  Its hard to project impending disaster when JNK continues to rally.  Risk on.

CRB fell -0.75%, finding support on its 9 EMA.  Of all the CRB components, only PM was up today. 

The market appears to have discounted the payrolls report - the brief USD follow-through on Monday was entirely lost today.  This is weighting the odds towards higher PM prices.  There does not seem to be any urgency to the price action, but if the buck continues to retreat I'd expect new highs from the miners and hopefully a re-test of the recent highs by gold and silver.  We are back to watching the buck once again.

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