PM Daily Market Commentary - 7/25/2017

davefairtex
By davefairtex on Wed, Jul 26, 2017 - 7:45am

 

Gold fell -5.70 to 1256.10 on heavy volume, while silver rose +0.01 to 16.48 on moderate volume.  Gold printed a swing high, but that was overshadowed by massive moves higher in both copper and crude oil, alongside a large drop in bonds.

Gold tried to rally in Asia, failed to make a new high, and then sold off steadily during London and New York. Candle print was a swing high, which the code says has a 69% chance of marking a top here. The gold forecaster plunged -0.37 points, and now reads +0.41. Gold may well have put in a high.

Open interest at COMEX for GC rose +6,671 contracts.

Rate rise chances (Dec 2017) remains at 47%.

Silver traded in a wide range, plunging during the London session to 16.22, and then shooting higher along with a strong Euro rally making a new high to 16.60 which also did not hold for long, with silver eventually ending the day more or less back where it started. Candle print was a doji, which the code felt was neutral. Forecaster rose +0.12 to +0.29. It looks like silver is trying to figure out where to go next.

Open interest at COMEX for SI rose +751 contracts.

The gold/silver ratio fell -0.39 to 76.24. That's bullish.

Miners bifurcated today, with GDX rallying up +1.00% on moderate volume, while GDXJ dropped -0.52% on very light volume. Candle print for GDX was a bullish harami, which the candle code found to be a continuation. GDXJ printed a spinning top, which was rated as a continuation by the code. GDX forecaster fell -0.03 to a neutral reading (0.0), while GDXJ forecaster dropped -0.11 to -0.44...strongly bearish.

The GDXJ:GDX ratio fell, while GDX:$GOLD ratio rose.

Platinum fell -0.42%, palladium rose +0.90%, while copper shotup +3.77%, breaking out to a new high. Copper is on a tear.

The buck rallied today, closing up +0.09 to 93.82. Candle print was a doji, which the code felt had a 49% chance of marking the low. Forecaster jumped +0.25 to a still bearish -0.44. Buck is still trying to put in a low, but has not done so yet.

Crude rallied +2.07 [+4.45%] to 48.55. Crude moved higher all day, and then a very bullish API report released after market close showed a 10 million barrel crude inventory draw, which added 50 cents to an already-good day for crude. Candle print was a white marubozu, which the code felt was a continuation. Forecaster jumped +0.64 to a reading of +0.46; crude is now back in an uptrend.

SPX rose 7.22 to 2477.13, making another new all time high for SPX. Best performer was energy (XLE:+1.26%) while sickcare did worst (XLK:-0.72%). SPX remains in a strong uptrend.

VIX was unchanged at 9.43.

TLT plunged a huge -1.30%, plunging through both the 50 and the 9 EMA. Forecaster dropped -0.81 to read -0.45. TLT is now clearly in a downtrend once more.

JNK inched up +0.03%, which is another new high. Risk on.

CRB rose +0.81%; only 2 of 5 sectors rose, led by a big move higher in energy (+3.02%) as well as industrial metals (+2.24%).

There were lots of very large moves today; copper's breakout was a huge move up, as was crude's move, while TLT was crushed. Gold's swing high is a warning shot across the bows of the PM complex in general, but what did the rally in GDX mean? I don't know. I prefer when everything lines up behind a thesis, but that's not what we are seeing right now.

FOMC has an announcement tomorrow at 2pm.

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7 Comments

Cold Rain's picture
Cold Rain
Status: Gold Member (Offline)
Joined: Jul 26 2016
Posts: 327
PM Action

If memory serves, the last one or two Fed days have been an excuse for strong moves lower in PMs.  If that holds today (and the setup seems favorable for that), we should see some drifting with an upward bias this morning, followed by a spike higher immediately after the Fed announcement, followed by a plunge that should carry over and continue into tomorrow.  This would presumably take gold into the low $1200s and silver well into the $15s for another lower low.  Things should stabilize on Friday.

We'll see how well that works out.

But those equities though.  Earnings getting better and better.  The economy is absolutely exploding on fire crushing it right now!

PeakGold's picture
PeakGold
Status: Bronze Member (Offline)
Joined: Jun 3 2017
Posts: 78
PM action

I still think we see $16.75, then down. I like this analysis by Ronny Fattal where the new low is weeks away...

Cold Rain's picture
Cold Rain
Status: Gold Member (Offline)
Joined: Jul 26 2016
Posts: 327
Progress so far....

So far, the general trend for gold and silver has been up.  So with about 15 minutes to go till the Fed, we're right on schedule:

Cold Rain's picture
Cold Rain
Status: Gold Member (Offline)
Joined: Jul 26 2016
Posts: 327
On Schedule...

At 2:55.  Nice spike:

Will we see selling take over this afternoon?  If not, my forecast will become invalid.  It will be interesting to see if we can finish the week higher, though.  So far, the miners look decent.

PeakGold,

Interesting analysis.  Thanks for sharing the vid!  It may very well work out that way.

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5072
Euro move

My sense is that PM is following the Euro.  More dovish-than-expected Fed = strong Euro rally = strong rally in gold.

EUR/USD: +0.70%

GC: +0.72%

That pesky gold-in-Euros chart didn't move at all.

 

PeakGold's picture
PeakGold
Status: Bronze Member (Offline)
Joined: Jun 3 2017
Posts: 78
Nice

Looks like you got it right there CR!

I jumped into DSLV at $16.65 silver spot with a target sell at $15.00. 

Good luck to everyone!

Giant Elk's picture
Giant Elk
Status: Member (Offline)
Joined: Dec 13 2014
Posts: 17
Go the Euro

Go the Euro. At the high going all the way back to Aug'15. Can it really go much further after the last month's move? And look at RSI on the weekly. 

My guess is a headfake above resistance and then a correction... we love guessing round here don't we.

Or maybe something might happen soon to remind Mr Market of structural imbalances, banking problems, sovereign debt problems and political conflicts.

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