PM Daily Market Commentary - 8/21/2017

By davefairtex on Tue, Aug 22, 2017 - 4:49am

Gold rose +7.30 to 1293.60 on moderately heavy volume, while silver climbed +0.05 to 17.00 on heavy volume. The metals recovered from Friday's drop, helped by a falling dollar [USD:-0.38%]; gold-in-Euros actually inched lower [EUR/USD: +0.45%] so it feels as though today's metals rally was all about currency moves today.

Gold moved steadily higher all day long, with a spike up to 1299.70 right at 9:30 Eastern that resulted in a large number of contracts trading hands. Possibly the spike was capped shy of 1300 by the shorts. Candle print was just a long white candle, which the code felt was a (bullish) continuation. Forecaster agreed, rising +0.12 to a bullish-looking +0.52. Gold closed just a few dollars shy of round number 1300.

COMEX GC open interest rose +876 contracts.

Rate rise chances (Dec 2017) fell to 40%.

Silver rallied up to the 200 MA, but was not able to hold most of its gains; candle print was a spinning top, which didn't provide any directional help. Silver's forecaster dropped -0.01, which is basically no change; forecaster remains just barely bearish at -0.04. Silver appears to be just chopping sideways right now.

Open interest in COMEX SI contracts rose +24 contracts.

The gold/silver ratio rose +0.18 to 76.30. That's slightly bearish.

The miners actually did fairly well today; GDX rose +1.66% on moderately heavy volume, while GDXJ climbed +1.53% on moderate volume. That's a new closing high for both miner ETFs. Candle print for GDX was a white marubozu, which seldom marks a top. The GDX forecaster jumped +0.29 to a +0.43 rating; that's fairly bullish. GDXJ also moved up +0.29 to read +0.42. Miners are looking reasonably strong.

The GDXJ:GDX ratio fell, while the GDX:$GOLD ratio rose. I think that's bullish.

Platinum rose +0.38%, palladium shot up +1.71% and made yet another new high, and copper rallied also, up +1.39% managing to close at $3.00 for the first time since late 2014. Palladium and copper both look very strong, while platinum remains in an uptrend.  The "other metals" are doing well.

The buck fell -0.35 to 92.88, breaking convincingly below the 9 EMA. The dollar forecaster sank -0.40 to read a bearish -0.46; that throws the buck into a downtrend.

Crude plunged -1.30 [-2.66%] to 47.56, dropping crude back below its 9 EMA. The print was a bearish belt hold, which has a 37% chance of marking a top. Forecaster dropped -0.34 down to just +0.08, which is a mostly neutral rating. I thought last Friday's big move was a sign prices would move higher, but today's drop mostly unwound that rally.

SPX made a new low but then rebounded, moving up +2.82 to 2428.37. Candle print was a hmmer, which the code felt had a 55% chance of marking the low. Forecaster wasn't as sure, ticking up just +0.01, with the reading now a bearish -0.48. Sickcare did best (XLV:+0.45%) while energy brought up the rear yet again (XLE:-0.51%).

VIX plunged -1.07 to 13.19.

TLT rose +0.24%, making a new closing high for bonds. Bonds remain in an uptrend, and they continue to say risk off.

JNK rallied +0.11%, but JNK still remains below its 9 EMA. JNK continues to struggle.

CRB fell -0.53%, with 3 of 5 groups falling, led by energy.

Metals looked all right today, but the rally seemed to be mostly driven by currency moves. Miners looked strong, moving to new highs.

SPX appears as though it might have put in a near-term low.

Can gold break 1300?  I think it depends on the buck.

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