PM Daily Market Commentary - 2/15/2018

davefairtex
By davefairtex on Fri, Feb 16, 2018 - 1:05am

Gold moved up +2.70 [+0.20%] to 1356.30 on moderate volume while silver was unchanged at 16.82 on heavy volume. Since the buck fell -0.56%, and it appears to be quite close to a breakdown, the lukewarm rally in gold and the flat day in silver suggests that there is a fair amount of selling pressure on PM right now.

Gold's trading range today was quite narrow; while it did make a new high to 1359.80, in Euro terms gold actually fell on the day. That's not a positive sign. Candle print was a short white/spinning top, which had a 47% chance of being a bearish reversal. Gold forecaster dipped just -0.02 to +0.41, which is still a strong uptrend. Looking at the forecaster, gold still looks on track to break out above 1365, especially if the buck continues to drop.

COMEX GC open interest rose by 5,759 contracts today.  That's a moderate amount of supply,

Rate rise chances (March 2018) fell to 82%.

Unlike gold, silver had a wide trading range, making a new high to 16.95 in Asia and then selling off hard during the London session, bottoming at 11:00 am in New York at 16.60. Buyers for silver then appeared which brought prices back up to even before the close. Candle print for silver was a bearish doji – which was actually a bullish continuation. Forecaster didn't agree, plunging -0.25 down to even; that's not quite a sell signal for silver, but it is very close. Silver ended the day just under its 200 MA.  Silver continues to look weaker than gold - it now looks ready to reverse.

COMEX SI open interest rose 2,815 contracts today.

The gold/silver ratio rose +0.18 to 80.64. That's bearish.

Miners were hit with selling early, but traders bought the dip and prices returned back to even by the close. GDX lost -0.09% on moderate volume, while GDXJ rose +0.30% on light volume.  GDXJ printed a northern doji, which had a 41% chance of marking a top. XAU forecaster agreed, dropping -0.37 to +0.28 – that's still an uptrend, but a weaker one. A day of rest after such a large rally is not surprising; if gold can break out above the 1365 previous high that should encourage the miners to rally further. The mid-day dip buying looked encouraging.

Today, the GDXJ:GDX ratio rose slightly, while the GDX:$GOLD ratio fell. That's neutral.

Platinum rallied +0.53%, palladium shot up +1.67%, while copper climbed +0.36%. The selling pressure wasn't as apparent on the other metals, all of which did better than gold. As long as the other metals keep moving higher, gold and silver should probably continue to rise as well.

The dollar moved sideways for much of the day, but started to sell off in the afternoon in New York, closing down -0.50 [-0.59%] to 88.30. That's a pretty big move down on no news that I could see. The buck is rapidly approaching the previous low of 88.13, set back in late January. At the velocity it is moving right now, I do not expect the previous low to hold. The Yen continues to move strongly higher having broken out to new highs a few days back - JPY rose +0.79% just today, and is up +2.50% for the week. Euro rose too, up +0.39% to 125.04, which is a few pennies away from the previous closing high of 125.10.  The Euro looks ready to break out.

Crude rallied early in Asia, sold off fairly hard until about 11 am in New York, and then rallied sharply into the close, ending the day up +0.66 [+1.09%] to 61.31. Candle print was a spinning top, which was a bullish continuation. Forecaster approved, rising +0.08 to +0.68. That's a strong uptrend for crude. It appeared as though the dip buyers really outnumbered the sellers today. This bodes well for a continued move higher.

SPX rose +32.57 [+1.21%] to 2731.20. Print today was a spinning top, which was a bullish continuation. Forecaster jumped +0.74 to +0.47, which is a – belated – buy signal for SPX. Sector map shows utilities were the surprise winner (XLU:+2.22%) with tech coming in second (+1.91%), while energy (XLE:-0.25%) brought up the rear. Energy equities are seriously underperforming the larger market, and have been for the past 5 weeks.

VIX fell -0.13 to 19.13. OPEX is tomorrow – options expiration – and that can be a volatile trading day as the big guys often wang prices of individual equities around to avoid having to pay off their option bets.

TLT moved up +0.34%, but in reality it was a failed rally day for TLT, which had been up a full 1% earlier in the day. TY fell -0.05%, making a new low. While utilities staged a very strong rally, treasury bonds continue to have trouble.

JNK shot up +0.72%, following through off yesterday's buy signal. It was a clear risk on signal from JNK. JNK has been slow to affirm the equity market's rally, but today it looked as though it was making up for lost time.

CRB rose +0.56%; 4 of 5 sectors rose, led by livestock (+0.72%). CRB is now a bit more convincingly above that 50 MA, slowly recovering from its 3-week selloff.

For gold and silver, it looked like a day of rest after a large rally – although I noticed that SPX didn't feel the need to do any resting, and the “other metals” outperformed gold and silver. Gold's lackluster move on a day with a fairly large dollar decline didn't look great, but a breakdown in the buck below the previous low of 88.13 should bring about a gold breakout above 1365, with 1377 on deck. If the buck sells off hard following the new lows, I think its likely that gold will make new highs. The dollar looks very weak right now.

The big question now is, will traders want to hold all their new equity purchases over the weekend? 

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4 Comments

Cold Rain's picture
Cold Rain
Status: Gold Member (Offline)
Joined: Jul 26 2016
Posts: 359
Prediction

I predict PMs are going to get monkey-hammered, body slammed, and rock bottomed today.  It's a shame that virtually ever other sector can just go up up up.  We get these nice mid-week bounces the PM space and a nice sell-off on Friday.  It would be nice to close the week out over $1360.  US 10s are plunging and the dollar is surging.  Of course, stocks are going to finish higher...that's a no-brainer

Cold Rain's picture
Cold Rain
Status: Gold Member (Offline)
Joined: Jul 26 2016
Posts: 359
Sweet Headfake

In the mining shares this week.

lambertad's picture
lambertad
Status: Silver Member (Offline)
Joined: Aug 31 2013
Posts: 177
Data agnostic?

This is the FED's own data series. Powell-y boy seems to have given in already. That'd didn't take long, did it. 

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5360
zooming in

WALCL is a choppy timeseries.  If this persists over the next few weeks, then we'll have something to talk about.  If in two weeks we see WALCL starting to expand again, I'll be all over it.

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