PM Daily Market Commentary - 4/27/2017

davefairtex
By davefairtex on Fri, Apr 28, 2017 - 2:40am

 

Gold fell -5.30 to 1265.40 on moderate volume, while silver dropped -0.25 to 17.29 on very heavy volume. Gold lost all of yesterday's rally, while silver was sold hard, and ended up plunging to new lows.  This marks 9 straight days down for silver - with more than half of those engineered by the commercials.  Today's drop for silver just seemed to be distribution by managed money.

GDP Now's final Q1 GDP adjustment dropped the first quarter estimate down to 0.2%, due to lowered consumer spending estimates for Q1, among other things. I guess the BEA has finally started to notice all those store closings. Could we be in recession right now? We could be. Retail sales are declining, credit growth is flat, auto sales have fallen off a bit of a cliff, while industrial production is ticking higher.  Call it 50/50.

Gold retreated from yesterday's gains early in the Asia session, and chopped sideways for the remainder of the day. Gold avoided making a new low. Candle print was an opening black marubozu which the code felt was slightly bullish. No reversal yet, but also no big declines.  It looks as though 1260 is a reasonable support zone for gold, at least so far.

Open interest at COMEX for GC rose +2,542 contracts.

Rate rise chances (June 2017) fell to 71%.

Silver traded sideways for much of the day, but sold off hard during the US session, ending the day nearly at the lows. Silver made a new low for the day of 17.26. There was some dip-buying, but not a lot. Managed money now appears to be in bail-out mode, and the commercials seem to be having a relatively easy time moving prices lower. Candle print was a long black candle, which the code felt was bearish. Open interest at COMEX for SI fell -6,566, which is about 3%. It appears that the commercials are ringing the cash register as silver drops in price.

The gold/silver ratio rose +0.74 to 73.19. The ratio continues to climb, which is not good news for PM.

The miners fell also, with GDX off -2.02% on moderately heavy volume, while GDXJ fell -1.77% on moderate volume. Both ETFs avoided making new lows. Candle print for GDX was an opening black marubozu, which was equal parts bullish and bearish. Its not a reversal bar. The GDX:$GOLD ratio continues to plunge, while GDXJ:GDX now seems to be leveling out.

Platinum fell -0.69%, palladium rose +0.77%, and copper was flat. Platinum is continuing to fall right alongside silver, while palladium moved up to close at the previous high. Next step for palladium is a breakout to new highs. Based on the correlations I ran yesterday, the palladium rally is a vote for "no recession."

The buck rose +0.04 to 98.90, basically going nowhere. The buck remains below its 200 MA, and the spinning top candle print was more bullish than bearish – but was not a reversal bar. The buck could go either way, but given a downtrend is in place, most likely it will continue dropping. The pound has been on a bit of a tear after PM May's election announcement; GBP is in a strong uptrend, and looks ready to break 130 in the near future.

Crude was hammered hard in London trading, touching a new low of 48.20, but then buyers appeared in the early afternoon in the US who steadily pushed prices back up to even. Crude closed up +0.03 to 49.24, printing a large doji candle which the code found to be bullish (68% chance of marking the low). Most doji candles are useless, but when one has a long lower shadow and strong volume as this one does, it can sometimes be a relatively high probability reversal bar. A close above today's high of 49.43 would mark a swing low.  We might just have our low in crude.

SPX traded in a range today, closing up +1.32 to 2388.77. We are well into earnings season – they do seem to still matter, at least to individual equities. SBUX showed an increase in average ticket, but a drop in orders in the US. After hours, SBUX lost almost 5% - this with record sales and EPS. Overall, cyclicals led (XLY:+0.53%) while energy was the worst performer (XLE:-1.09%). Of note was the drop in financials; the bearish engulfing candle (also: conf bear doji) was seen as quite bearish by the candle code. In the recent market rally, XLF was unable to close above its 50 MA, today it printed a swing high, and it has been seriously underperforming SPX for two months now. It might be a shorting opportunity.

The VIX fell -0.49 to 10.36. Put-buyers have been burned so many times now. What's next? Single digits for the VIX?

TLT was mostly unchanged today, losing just -0.03%. It actually gapped down in the morning, and then moved higher during the day, recovering most of its losses. TLT remains below its 9 EMA. TLT gave off a bullish reversal signal yesterday, and had some reinforcement today: TLT's long white candle print was seen as bullish by the code.

JNK rose +0.13%, making a new closing high. JNK continues to signal risk on.  The long white candle was seen as reasonably bullish.

CRB dropped -0.67%, wiping out the gains from strong rally that happened on Tuesday. CRB made a new low, it is down perhaps 8% from its highs in January, and it remains in a downtrend.

Once again, the PM sector has refused to give us a collection candle prints that suggest that a reversal might be imminent. Gold/silver ratio continues to climb, GDX:$GOLD ratio continues to drop. Odds are, we have lower prices ahead. TLT continues to hint at risk off, but JNK gives an equal hint in the opposite direction. XLF is telling us that a lower high might happen for the financials, but overall SPX remains bullish.

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4 Comments

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

0.7%, slowest personal spending in years, wage inflation up, long bond rates up, and of course, gold and silver immediately down handsomely.  I'm sure the stock market will surge to all time highs today, with GOOG and AMZN going bananas.  And I'll bet they pass a one week CR to keep the government alive for the next seven days, while they work out a CR to get them to the fall.  Looks like the big impediment, Rynocare, is DOA again.

pc10101's picture
pc10101
Status: Member (Offline)
Joined: Apr 27 2017
Posts: 2
Preferred Vendor

Hi there,

Any recommendations for silver/gold coin/bar vendors in Minneapolis-St. Paul metro area? 

Thanks in advance!

~PC~

Penny551's picture
Penny551
Status: Silver Member (Offline)
Joined: Nov 8 2012
Posts: 154
Gold/Silver vendor

Hey PC,

I've been dollar cost averaging using OwnX for years now and really like it.  I'm sure there's some good "brick and mortars" in your neck of the woods as well.

Regards,

Steve

reflector's picture
reflector
Status: Gold Member (Offline)
Joined: Aug 20 2011
Posts: 279
miles
pc10101 wrote:

Hi there,

Any recommendations for silver/gold coin/bar vendors in Minneapolis-St. Paul metro area? 

Thanks in advance!

~PC~

you may want to check out miles franklin, i know they are in wayzata:

https://www.milesfranklin.com/

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