PM Daily Market Commentary - 8/2/2017

By davefairtex on Thu, Aug 3, 2017 - 1:12am

Gold fell -2.30 to 1272.60 on moderate volume, while silver dropped -0.12 to 16.57 on moderately heavy volume. The Euro made a new high – and the buck fell – but the currency moves were not enough to pull gold and silver into positive territory.

Gold tried rallying today during the Euro rally, but gold topped out after the Euro peaked, and gold fell into the close. Since gold didn't make a new high or low, candle code had nothing to say about direction. The forecaster plunged -0.34, taking gold's rating down to +0.17 – still bullish, but not by all that much. While gold remains above its 9 EMA, it appears that its upside momentum has stalled out.

Open interest at COMEX for GC rose 9,506 contracts. It feels as though someone is loading up short.

Rate rise chances (Dec 2017) remains at 43%.

Silver had some odd events happen to it today. First, there was a big upside spike that happened just after 7pm Eastern – before the Japan open – where silver jumped 23 cents in 5 minutes to a new high of 16.96, with 5k contracts traded during that time. It sure looked like a fair number of shorts were stopped out. Later, at 8:45 am eastern, silver was hit for an 18 cent loss over 10 minutes, good for 6k contracts, but this time on the downside. The net result on the day was a shooting star candle print, which the code felt had a 64% chance of marking the top. This was a very bearish shooting star. The forecaster agreed, dropping -0.38 to a newly-bearish rating of -0.15. Silver also ended its day right at the 9 EMA. Silver appears to be changing trend.

Open interest at COMEX for SI fell -769 contracts.

The gold/silver ratio rose +0.44 to 76.80. That's bearish.

Miners tried to rally today alongside the Euro, but the rally failed. GDX fell -0.26% on light volume, while GDXJ dropped -0.92% on very light volume. GDXJ printed a swing high, which had a 48% chance of marking the top. GDX forecaster plunged -0.17 to -0.01, dropping into bearish territory. The GDXJ forecaster also fell, losing a big -0.38 to -0.05. Miners are now bearish.

The GDXJ:GDX ratio fell, as did the GDX:$GOLD ratio. That's bearish.

Platinum rose +0.26%, palladium fell -0.01%, and copper climbed +0.28%. Copper may be topping out; regardless of today's rally, copper forecaster fell -0.26 to read +0.14. Platinum remains in a strong medium-term uptrend, however.

The buck fell -0.20 to 92.62. Intraday, the buck made a new low to 92.31 before rallying back fairly strongly. In spite of the new low, the rebound resulted in a spinning top candle print that actually looked like a hammer; candle code gave it a 49% chance of marking the low. The dollar forecaster ticked up +0.03 to a still-bearish -0.54. Some buyers did appear, but no reversal yet for the buck.

Crude bounced back after yesterday's plunge, rising +0.82 to 49.61. Crude initially sold off after a barely-bullish EIA report showed -1.5m crude inventory draw (as well as a -2.5m gasoline inventory draw), which was an improvement over yesterday's API report, but not by very much. After 30 minutes, the selling stopped, and crude rebounded strongly, ending the day just above its 200 MA. Candle print was a bullish harami, but the code wasn't impressed – it was only neutral. Likewise, the forecaster rose just +0.03 to read +0.29 – still bullish, but not very enthusiastically so.

There was an interesting article at on the subject of abandoned oil wells; if a company goes bankrupt, who pays for remediation for the bankrupt company's non-producing wells? Quick answer: the government, at least according to the most recent decision in the courts in Canada. Case has now been appealed to the Supreme Court. Once the fracking boom is over, the US will have a few hundred thousand oil wells, most likely, owned by a bunch of bankrupt shale producers. Who pays to deal with the problem here in the US? Article doesn't address that issue.

SPX rose +1.22 to 2477.57. SPX actually fell fairly dramatically at the open, but the buyers showed up and pulled prices back into positive territory by end of day. Candle print was a takuri line, but the code felt it was neutral rather than bullish. SPX continues to chop sideways. Industrials did best (XLI:+0.44%) while energy lagged (XLE:-0.38%). SPX continues to chop sideways.

VIX rose +0.19 to 10.28.

TLT rose +0.06%, trying to rally and making a new high but then fading into the close. The spinning top print was seen by the code as a continuation rather than a reversal.

JNK was flat on the day, chopping sideways after yesterday's drop.

CRB initially fell today, but rebounded along with oil. CRB closed up +0.68%, with 4 of 5 sectors moving higher led by livestock.

Today, the European PM buyers remained on the sidelines; the dropping dollar didn't help gold or silver. The miners look weak, silver looks weaker, and it appears as though much of the PM complex is about to start heading lower.

I think its time to be careful out there.

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