PM Daily Market Commentary - 8/9/2017

By davefairtex on Thu, Aug 10, 2017 - 4:39am

Gold rose +16.70 to 1283.20 on heavy volume, while silver climbed +0.50 to 16.93 on very heavy volume. Both gold and silver powered higher following through from yesterday's rally. Both metals climbed steadily all day long. Mainstream press said that gold's rally was driven by concerns about nuclear war with North Korea and/or increased gold imports by India.

Gold made a new high to 1284.70, breaking above the previous high of 1280.30. Candle print was a strong line/swing low, which the code felt was neutral. Forecaster jumped +0.68 to a strongly bullish rating of +0.47.  I think I believe the forecaster here: gold has resumed its uptrend.

No open interest data today.

Rate rise chances (Dec 2017) rose to 47%.

Silver rose alongside gold, following through after yesterday's reversal pattern. Silvers candle print today was a white marubozu which the code felt was a continuation. Silver forecaster jumped +0.79 points to read a very bullish 0.62. Silver is now back about the 9 EMA and the 50 MA and has resumed its uptrend.

No open interest data today.

The gold/silver ratio fell -1.27 to 75.79. That's strongly bullish.

Minors gapped up at the open but then traded sideways for the remainder of the day. GDX rose +1.57% on moderate volume while GDXJ climbed +1.80% on moderate volume also. The miners managed to rally today, but they did not look nearly as strong as gold and silver on the intraday charts. All of the miner rally rally came at the open. Candle print for GDX was a doji, as was the candle for GDXJ – both are continuation candles. GDXJ forecaster rose +0.45 to -0.02, while the GDXJ forecaster climbed +0.32 to -0.15. Miners remain bearish, but only mildly so.  Notice how the miners have yet to break out, while gold and silver have both made new closing highs.  Miners are lagging behind the metals.

The GDXJ:GDX ratio rose slightly, as did the GDX:$GOLD ratio. That's bullish.

Platinum rose +0.45%, palladium fell -0.83%, and copper fell -0.49. Another new high for platinum.

The buck fell -0.08 to 93.34, remaining just above its 9 EMA. The doji candle was seen as a continuation, while the forecaster fell -0.20 to +0.22. Dollar uptrend remains intact, for now.

Crude started moving higher just before the close in Asia, suffered a brief downdraft immediately following the EIA report release (crude draw: -6.5m barrels, gasoline build:+3.4m barrels) but buyers appeared to pull crude to new highs into the close. Crude ended the day +0.74 to 49.75, managing to close back above its 200 MA. Crude forecaster jumped +0.33 to read +0.36. Its hard to tell if this marks a breakout above the recent sideways chop. Perhaps we should believe the forecaster.  It suggests crude will break out soon.

SPX fell -0.90 to 2474.02. SPX fell overnight in the futures markets gapping down somewhat at the open, but rallied back towards even by end of day. Consumer staples did best (XLP:+0.16%) while cyclicals fell most (XLY:-0.58%).

VIX rose +0.13 to 11.11.

TLT gapped up at the open but then sold off all day long, closing up +0.55% printing a bearish belt hold candle which was seen as neutral. Forecaster ticked up +0.05 to +0.09. TLT remains in an uptrend, and above all 3 moving averages - but the uptrend looks a bit precarious.

JNK fell again today, dropping -0.43%. The plunge in JNK is starting to accelerate. JNK is saying risk off.

CRB rose +0.26%; 3 of 5 sectors rallied, led by PM which rose +1.50%.

Today's strong rally in the metals was impressive, driving prices to new closing highs for both gold and silver. The move in the miners was much less exciting; perhaps the prospect of a nuclear war doesn't impel people to buy the mining shares the same way it does gold and silver.

The flight to safety moves usually have a short lifespan. Once the fuss dies down, prices return to their starting points.  The weak miner response seems to underscore this expectation.  Still, the technicals are signaling a return to an uptrend, and not just in USD: gold/EUR has finally broken out of its recent congestion area.  Buyers in Europe have returned, at least for now, and that's bullish.

The falling JNK prices are starting to become interesting – happening alongside a rise in crude prices, they are a strong risk off sign, and if it continues, might just start to pull equity prices lower too.

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lambertad's picture
Status: Silver Member (Offline)
Joined: Aug 31 2013
Posts: 186
SNB gold mining shares

So here's some evidence that SNB has been a seller of mining shares YoY.

Why wouldn't CBs who are buying assets load up on GDX/GDXJ and then sell shares to cap prices right at technical support levels? They can buy again on the downside once the price drops so as to accumulate a nice position. Then, once prices start rising again they just dump more shares onto the market to cap the next leg up.

They do this dumping with paper gold contracts as we've seen. It would obviously be a little harder with actual shares that you can't just make up. 

We already know they watch the price of gold and this article shows that the SNB is buying mining shares with it what is likely printed money. What's to stop an opaque CB from trying to cap the mining shares as a signaling mechanism that "everything is GREAT" 

BTW, that 69% increase in TSLA is going to pay off GREAT, only if the SNB keeps printing thin air money and buying more TSLA shares with it.

davefairtex's picture
Status: Diamond Member (Online)
Joined: Sep 3 2008
Posts: 5738
JNK drop -> SPX -25 [-1.03%]

Looks like that JNK drop over the past few days was the tell for today's equity market sell-off.

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