PM Daily Market Commentary - 4/10/2017

davefairtex
By davefairtex on Tue, Apr 11, 2017 - 3:43am

 

Gold rose +0.30 to 1256.40 on moderate volume, while silver dropped -0.05 to 17.94 on moderately heavy volume. Initially, gold and silver followed through from Friday's sell-off, but both metals rallied during the US trading session and ended the day more or less back where they started. 

Gold initially was driven to a new low of 1248.20 about an hour before the US market opened, but then buyers showed up, pushing the price of the metal back up to flat. Candle print: doji, which the code feels is neutral. Gold remains above its 9 EMA. The momentum indicators suggest gold is about to roll over (MACD is quite close to a bearish crossover, while RSI is showing a distinctly bearish divergence), and last week's read on the trend suggested gold was in a downtrend, but so far, no close below the 9 EMA.

Open interest at COMEX for GC rose +1,361 contracts.

Rate rise chances (June 2017) fell to 67%.

Silver was driven lower than gold, touching 17.73 just after the US market opened, before rallying back close to even. Candle print today was a doji star/southern doji, which the code felt was bullish.  That's a reversal bar in silver's new downtrend.  Could we actually have a low for silver here? Confirmation would help.  Silver remains above its 50 MA, but below the 9.

The gold/silver ratio rose +0.23 to 70.03.

Miners also sank for the first few minutes of trading, but then rallied almost immediately as the metals started to rally back. GDX rose +0.64% on moderately light volume, and GDXJ climbed +0.60% on very light volume. Both groups initially were driven below their 9 EMA lines, but ended the day back above, with the senior miners looking strongest. Print for GDX was a closing white marubozu, which the code felt was neutral. The way I read that is, GDX remains in its uptrend, since Friday's candle wasn't a reversal bar. Miners continue to creep higher.

Platinum plunged -1.56%, palladium dropped -1.66%, and copper fell -1.42%. All three metals suffered some fairly large losses today, but platinum looks the worst – the candle code saw the move as very bearish. Palladium printed a swing high, and was driven through its 9 EMA and may have double-topped, while copper has fallen to 2.60 support. A more general breakdown of the metals would probably be bearish for PM overall – and I'd say especially for silver, given the COT report from last week.

The buck fell -0.17 to 100.93, first making a new high and then selling off slightly. Candle print was a bearish harami – but not really very bearish at all. It looks like more of a rest prior to moving higher. Uptrend for the buck remains intact, at least for now.

Crude continued to drive higher, climbing +0.93 to 53.34. Crude has risen 8 of the last 10 days, more than $5 in two weeks. If its not an airstrike in Syria, it is outages in Libya, or the chatter about OPEC extending production cuts for another six months. Right now, the market always seems to find reasons to rally, which is a sign of a bull market move. COT report is supportive of higher oil prices too. Managed money has been wrong-footed again, big surprise; they added about 70k contracts short during last month's plunge, which is a whole lot of fuel for a short-covering rally. As of the last COT report, they'd only dumped about 20k of that to date. What will crude do at the 54 resistance line? I'm guessing there will be a lot of hedging by the shale drillers in the 52-54 range. A real breakout above 54 would be a big deal, however oil is overbought right now (RSI-7=84).

SPX had a moderately wide trading range, but ended up going nowhere, closing up +1.62 to 2357.16. Candle print was a long-legged doji, which the code felt was mostly neutral. Energy did best (XLE:+0.75%) while financials did worst (XLF:-0.26%).  Financials continue to look unhealthy; they are underperforming the market, which is a bearish sign.

VIX screamed higher, up +1.18 to 14.05.  Most of the move happened between 11:30 - 12:15.  I wonder what that's about? SPX did bounce around, but the moves weren't all that dramatic. It looks like traders are now worried about some kind of risk, but I'm not sure what it might be.

TLT rose +0.46%, regaining about half of Friday's big move down. TLT remains above its 9 EMA, and still looks poised to break higher. Risk off hints.

JNK rose +0.19%, moving back above the 50 MA. JNK is slowly looking more bullish. Risk on hints, although JNK's rise is probably due to the oil rally.

CRB rose +0.28%, inching above its 200 MA for the first time in a month. The move higher was driven mostly by energy and agriculture. CRB managed to have a modest rally in spite of the plunge in industrial metals.

So far gold and silver (and the miners too) are hanging tough in spite of a big sell-off in the other metals.  Platinum has had an unpleasant couple of days, now joined by copper and palladium.  Coupled with a TLT rally and the pop in the VIX, it does suggest some concern right now in the markets.

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9 Comments

reflector's picture
reflector
Status: Gold Member (Offline)
Joined: Aug 20 2011
Posts: 279
elemetal refiners shut down by fbi?

i don't know if anyone else has been following this story...

elemetal refining (a merger of OPM [ohio precious metals] and NTR) has apparently been caught up in an fbi investigation, possibly shut down, not 100% sure?

i had been buying 100oz elemetal silver bars at providentmetals.com, but they don't have them any more, and are close to being out of any elemetal inventory at this point.

about a month ago, i read on bloomberg this fascinating story about a chilean gold smuggler, harold vilches, who was selling gold to NTR:
https://www.bloomberg.com/news/features/2017-03-09/how-to-become-an-inte...

followup article 1 week later:

https://www.bloomberg.com/news/articles/2017-03-16/gold-company-manager-...

 

now it sounds like FBI has shut down elemetal:

Elemental (NTR) shut down for money laundering:

"Suspension of Warranting of Elemetal Refining, LLC (ELEM) Gold and Silver Brands

Unsubstantiated reports are now indicating that Scotia Bank has recalled its entire line of credit extended to Elemetal, and that Elemetal is currently in the process of shutting down operations entirely at its Jackson, Ohio facility (formerly known as Ohio Precious Metals) with all product being returned to Scotia Bank at the conclusion."

http://goldrefiningforum.com/~goldrefi//phpBB3/viewtopic.php?t=25400

i guess it just goes to show once again, if you want to break the law, you have to do it on a big scale ($1billion+ range), and you have to pay off the right people in government, like jon corzine did, otherwise you go to jail.

chris duane just did a video on the situation too FWIW:

 

 

 

Cornelius999's picture
Cornelius999
Status: Gold Member (Offline)
Joined: Oct 17 2008
Posts: 381
Libor Manipulation

Last nights BBC Panorama program apparently establishes that the Libor scandal originated as high as the Bank of England. Quel surprise!

See also " Bank of England Rigging Libor - Gold Manipulation Too? "

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5694
gold new high: 1275.90

Gold is looking strong today - its a breakout to new highs.  I can't quite say why - it wasn't aligned with anything I could see.  Its a clean breakout for gold over the 200 MA.  Senior miners are following.  Its well past the first hour and miners continue to look strong.

Silver started its run at 08:20, gold was about 15 minutes earlier at 08:05.

Gold made new highs - silver did not.

 

Cold Rain's picture
Cold Rain
Status: Gold Member (Offline)
Joined: Jul 26 2016
Posts: 382
Reversal

So, what time does the wall of buying hit the market?  1:30?  2:00?  Should set us up for a positive close and a reversal in PMs.

Cold Rain's picture
Cold Rain
Status: Gold Member (Offline)
Joined: Jul 26 2016
Posts: 382
Lol
Cold Rain wrote:

So, what time does the wall of buying hit the market?  1:30?  2:00?  Should set us up for a positive close and a reversal in PMs.

Lol, looks like I was about an hour or so too late with my estimate!

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5694
aligned with USD

CR -

Buying in SPX was aligned (roughly) with the low in the buck today - along with the low in oil.

Sometimes its a tinfoil hat thing, other times its not.

Gold is still up +19.

 

Cold Rain's picture
Cold Rain
Status: Gold Member (Offline)
Joined: Jul 26 2016
Posts: 382
No Tin

Yeah, Dave, I hear ya.  I wasn't really contemplating a reason as much as I was commenting on the predictability of it.  For whatever reason, it seems when equities start the day out weak, they usually bounce back.  When gold starts out super strong, it usually caves in.

Like today, I'll bet gold loses steam into the close and your code will print some kind of northwest shooting star tomahawk grave digger doji/nr7 280zx candle, which will look rather bearish! :)

vadim_75's picture
vadim_75
Status: Bronze Member (Offline)
Joined: Oct 18 2015
Posts: 48
russell

No, this time gold seems to be fine since usd/jpy lost 110. But guys did you see Russell? Is it telling us that this selling isn't for real?

 

Cold Rain's picture
Cold Rain
Status: Gold Member (Offline)
Joined: Jul 26 2016
Posts: 382
rong, W

I was wrong all away around the horn on this one.  Looks like gold/silver will close at their highs.  Maybe we'll still get the 280zx candle code, though!

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