PM Daily Market Commentary - 8/7/2017

davefairtex
By davefairtex on Tue, Aug 8, 2017 - 2:40am

 

Gold fell -0.90 to 1263.40 on very light volume, while silver rose +0.02 to 16.25 on moderate volume. Both metals more or less just chopped sideways. The buck fell somewhat, retracing a bit from last Friday's strong move higher, however that did not seem to help PM very much.

Today was really uneventful for gold. Candle print was a very low volume doji/NR7, but since it didn't make a new low, the candle code had nothing to say about direction. The forecaster thought it was bullish, moving up +0.14 to read a still slightly bearish -0.16. Downtrend remains in place.

Open interest at COMEX for GC rose 1,203 contracts.

Rate rise chances (Dec 2017) fell to 43%.

Silver broke support during the London session and made a new low to 16.09, but then a lot of buyers showed up; the volume for silver was quite heavy through about mid-day in the US, pulling price back to even. Volume in silver was much higher than in gold. The doji/spinning top candle was seen by the code as a continuation. The forecaster thought it was bullish, rising +0.19 to a still-bearish -0.37.

Open interest at COMEX for SI fell -6,591 contracts. This was a very large change for silver OI.  My guess is that all that volume came from shorts that decided to cover.

The gold/silver ratio fell -0.15 to 77.72. That's bullish.

Miners tried rallying, but the rally topped out around 1pm and then sold off into the close. GDX fell -0.54% on moderately light volume, while GDXJ dropped -0.52% on light volume. Candle code saw both the spinning top from GDX as well as the southern doji from GDXJ as continuations. GDX forecaster was quite unhappy, dropping -0.20 to a very bearish -0.62. GDXJ forecaster rose +0.03 to read -0.62 also. Miners remain in their downtrend.

The GDXJ:GDX ratio rose slightly, while the GDX:$GOLD ratio fell. It looks slightly bearish.

Platinum rose +0.24%, palladium climbed +1.33%, and copper rose +0.80%. Platinum has risen 7 days straight; forecaster remains quite bullish at +0.68. Platinum is now above all 3 moving averages; it is up almost 8% off the lows set back in July. Copper made a new closing high today to 2.91. No recession in sight with copper this strong. Palladium is also above all 3 moving averages. The “other metals” are doing very well.

The buck fell -0.11 to 93.31; it looks like the buck is just taking a break after the strong rally last Friday. Buck remains above its 9 EMA; the new uptrend remains in place.

Crude dropped about a buck intraday, but the buyers showed up around 11am Eastern, dragging crude back up to close at 49.35, down -0.18. Crude has been chopping sideways now for 6 trading sessions, and today didn't change that. Crude forecaster rose +0.10 to read a slightly bullish +0.17; I think the forecaster liked the long lower shadow.

SPX rose +4.08 to 2480.91. While SPX has been more or less chopping sideways for the past 2 weeks, DJIA has rallied 10 days in a row; it is now very overbought at RSI-7=88. Time to break out the Dow 22,000 party hats! For the SPX sector map, consumer staples led (XLP:+0.75%) while energy dropped (XLE:-0.75%).

VIX fell -0.10 to 9.93. VIX is below 10 once again.

TLT rose +0.11%, edging back above its 50 MA. While the spinning top candle didn't make a new high or low, the forecaster fell -0.05 to read +0.43, which is still fairly bullish. TLT is now back above all 3 moving averages, and remains in its uptrend.

JNK fell -0.03%, more or less unchanged from Friday. JNK appears to have found support at its 50 MA

CRB rose +0.16%, with 3 of 5 sectors rallying today. Best performer was agriculture (+1.61%) with industrial metals (+1.47%) coming in second. CRB's 7-week uptrend remains intact.

Today wasn't very eventful; perhaps the most interesting element was the big drop in silver's open interest. Losing 6k contracts means that 1025 tons of paper silver supply was taken off the market. That resulted in a whole lot of buying. Even so, that is still only a 3% change, which gives you a sense of just how much paper silver there is out there right now – more than 30,000 tons.

Does this big drop mean something? It might. Especially if it keeps happening. We'll only know who covered on Friday.

Gold, viewed in Euros, continues to drop. That's not a good sign. As has been the case now for a month, I continue to be worried about a dollar rally.

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