PM Daily Market Commentary - 4/3/2018

davefairtex
By davefairtex on Wed, Apr 4, 2018 - 1:06am

Gold dropped -8.90 [-0.66%] to 1336.50 on moderately heavy volume, and silver fell -0.20 [-1.18%] to 16.39 on very heavy volume. The buck did tick higher [+0.16%] but the move was not large enough to account for the selling pressure in PM.

Gold tried rallying several times in Asia and London, failing for the last time at about 8:20 am, and after that gold dropped fairly briskly into the open in New York. Candle print for gold was a bearish harami (38% bearish reversal), which the forecaster felt was neutral – no change at +0.40 - and so gold remains in an uptrend.

COMEX GC open interest fell -7,274 contracts.

Rate rise chances (June 2018) fell to 79%.

Silver also printed a bearish harami, which only had a 35% chance of being a bearish reversal. Silver's forecaster dropped -0.07 to +0.21; silver remains in an uptrend. The recent set of high volume down-day bars is bearish, as it suggests the selling pressure is higher than the buying.

COMEX SI open interest rose by 4,653 contracts today. That's 10 days of mine production in paper silver – and is probably managed money loading up short.

The gold/silver ratio rose +0.42 to 81.52. That's bearish.

Miners fell, with GDX down -1.44%on moderate volume, while GDXJ dropped -1.48% on moderate volume also. GDX printed a bearish tasuki line (42% reversal), while GDXJ just printed a (neutral) short black candle. XAU forecaster actually rose, up +0.06 to +0.33, which is still an uptrend. Looking at the daily charts, miners seem to be slowly recovering; even after today's dip, XAU remains above its 9 MA. Pulling back to weekly and monthly timeframes, I notice mild uptrends in both weekly and monthly timeframes – with this month's forecaster issuing a buy signal – which assumes we close the month out at today's prices.

Today, the GDXJ:GDX ratio fell slightly, and the GDX:$GOLD ratio fell a bit harder. That's bearish.

Platinum dropped -1.03%, palladium was off -0.34%, while copper rallied +0.71%. Copper appears to be continuing its recovery, while both palladium and platinum look quite bearish. Gold is doing a lot better than platinum: the gold/platinum ratio is at 1.44, which is a 35-year high, and is only surpassed by a 1-day spike high to 1.46 back in 1982. If platinum continues to plunge like this, we should see a new all time high in the ratio in the next few days. Unless there's a million-ton platinum asteroid being secretly towed back to earth...I'm not sure why this metal is performing so poorly. Maybe it is that gold is doing (relatively) well.

The buck moved up +0.14 [+0.16%], printing a (neutral) spinning top. Forecaster didn't like it, dropping -0.34 to +0.04, which is just barely an uptrend. The buck continues to more or less move sideways – there are occasional strong days in both directions, but which way will it finally jump? When we pull back to the weekly & monthly timeframes, we see a mild uptrend on the weekly, and a mild buy signal for April – assuming we close here at end of month. So let's say the bias is up.

Crude rebounded from yesterday's big hit, up +0.72 [+1.15%] to 63.56. The bullish harami was just neutral, but the forecaster jumped +0.41 to -0.17. There was a somewhat bullish-looking API report after market close [crude -5.3m, gasoline +1.1m, distillates +2.2m], but it just caused some volatility rather than moving price in a particular direction. The weekly US Field Production/Crude report shows an increase of +150k bpd vs last month, to 10.433 mbpd, a new all time high. Crude's weekly forecaster remains in a downtrend. News articles I read blame crude's relative recent weakness on concerns over a trade war. Could be.

SPX climbed +32.57 [+1.26%] to 2614.45. There has been a whole lot of back and forth over the last 7 trading days – large days down, then large days up again. Weekly & monthly both show SPX in a downtrend, so that's the current bias right now. Sector map shows energy did best (XLE:+2.13%) while utilities trailed (XLU:+0.34%) with tech (XLK:+0.99%) second-lowest. This wasn't a particularly bullish map today; much of today's rally was about oil equities. Really, not everything is in a bubble; oil equities (and especially services) are closer to the lows than the highs.

VIX fell -2.52 to 21.10. The VIX has just been chopping sideways for the past few weeks also; it is not sure where things go next.

TLT fell -0.77%, following through off yesterday's poor performance. TLT printed a swing high (47% bearish reversal) and its forecaster plunged -0.88 to -0.25, which is a sell signal for TLT. TY looked much the same, printing a swing high also (58% bearish reversal) and TY forecaster dropped -0.36 to -0.07, which is a sell signal for TY. TY weekly and monthly are both showing uptrends, but to me, bonds have been doing badly enough in recent days that I'm betting on them to fall further.

JNK rose +0.20%, printing a bullish harami (49% bullish reversal) and sending the forecaster up +0.90 to -0.07. A reversal for JNK? Maybe. HYB, JNK's cousin, issued a (daily) buy signal a few days ago. Weekly still points downhill.

CRB fell -0.09%, with only 2 of 5 sectors dropping, led by livestock (-1.70%) which has done quite poorly over the past few months, down 15%. CRB is below the 50 and 9 MA lines; the hoped-for “inflation” might be fading, at least from the commodity complex anyway.

While gold seems to be mostly marking time, gold's cousins – silver and platinum – are doing a whole lot worse. That's both annoying (if you hold silver or platinum) and a buying opportunity. One assumes reversion to the mean will reward the patient buyer.

Gold in Euros has bounced higher in the past few weeks, almost 35 euros up from the March low, and forecaster has GC.EUR in an uptrend. That's a good sign.

Equity markets are still really volatile – there is a lot of selling, but also a lot of dip-buying, which makes sense since the dip-buying strategy has worked out well for the past 9 years. Junk debt isn't signaling any sort of impending collapse. It will take time for the higher rates to have an impact on the economy.

9 Comments

AGSeeker's picture
AGSeeker
Status: Member (Offline)
Joined: Apr 4 2018
Posts: 4
Gold or Silver.

Delete

AGSeeker's picture
AGSeeker
Status: Member (Offline)
Joined: Apr 4 2018
Posts: 4
Gold or Silver.

Delete

AGSeeker's picture
AGSeeker
Status: Member (Offline)
Joined: Apr 4 2018
Posts: 4
Gold or Silver.

I am not sure if this is the right place to ask this question. I am interested in spending 10k on the purchase of gold or silver. I currently have over 1000oz of silver bullion and I also have about 40k of physical cash. I have 20k in the bank and i'd like to lower that amount to around 5k. 

Would you recommend I buy gold or silver currently? Also, where are people buying their gold from these days? Provident was good to me back in the day and also SilverTowne. I also have a 401K with 36k in it that is a government TSP plan.. I was thinking about leaving that in there so when the market does crash I can move it into a fund that is tied to the DOW Jones and ride that wave up like I did in 2008. Also, I'm 33 years old with no kids.

Its my first day on the site please point me in the right direction if this is not the place for me to post this.

Thank you!

Michael_Rudmin's picture
Michael_Rudmin
Status: Platinum Member (Offline)
Joined: Jun 25 2014
Posts: 799
We're not that girl.

If you spend enough time here, you'll get to know that this place isn't about that.

Is gold or silver better?

I heard it said on this forum that gold is the coin of kings, silver the coin of commoners, or somesuch. Neither of those have to do with whether you should buy one or the other. It's a statement about history.

We also groan together at slamming by the big boys, whether it's true or not (but it regularly has been, if you look at the history of settled cases), look at other non-monetary investments, and so on.

So most of these people here are interested in gold or silver despite it currently being one of the poor performers.

Which then leads to the answer to your question, "who knows?"

Now where you should buy? Again, different folks use different dealers. Some like coin; some like junk silver. I think at one point some people mentioned the very real physical hazards of buying old catalytic converters and trying to use them. Maybe that was a different forum... I don't remember. Point being, the bigger discussion is how to know whether the gold and silver you're buying , you're really getting. Some people don't care: they trust the vaulted services. A lot of those here DO care, and like physical. But there's also interest in miners,

... and then there's bitcoin.

If you like all that, then hang out. The answers to your questions are yours to come up with.

AGSeeker's picture
AGSeeker
Status: Member (Offline)
Joined: Apr 4 2018
Posts: 4
Thank you.

Your response was very helpful. I am just getting into the information provided on this site so I'm still trying to figure it all out. I personally am for physical metals. I did find Chris' post on how to being buying PM and what he recommended. I will follow that lead for now. 

I'm not looking for investment advice, more looking for ways to better spread out my cash holdings. At the moment land prices where I live are not affordable. I will run myself through the full course and see what answers I come up with. Thank you for the response!

Michael_Rudmin's picture
Michael_Rudmin
Status: Platinum Member (Offline)
Joined: Jun 25 2014
Posts: 799
There are things better than land.

1) get along with your neighbors.
2) train yourself in survival skills. Teach yourself to make a biblical war sling, and get good with it, for example. Learn what wild foods are edible around you, when.
3) stash sealed and dry boxes of seed and simple highly useful tools in all directions around you, where you know where they are.
4) learn a technology-free or minimum-tech skill. (cobbler)
5) learn a highly mobile technology-dependent skill.
6) learn a mid-tech skill. (welding , for example)
7) develop a good human-waste treatement method that is portable and cheap. Bonus if it isn't just burning it, but even that can be good.
8) get going a kefir-process system, that can treat milk to make it keep. Grow a customer base, and supplier base. On the side, figure out how you will scale it if you need to.
9) learn another language. ASL might be particularly valuable.
10) sponsor a family in a cheap- land-rich area like kentucky, providing them with house and/or land, while they provide you with a vacation getaway that is a tinyhouse on the land. They keep up the tinyhouse; and if there's ever need, it will be more of the same. In Kentucky or TN, some land is $1k or $2k per acre. Similer in WVa.
11) start making yourself solar equipment, solar bike cart, solar whatever. Teach yourself to do it with scratch-and dent panels, so that neighbors don't covet them.

davefairtex's picture
davefairtex
Status: Diamond Member (Online)
Joined: Sep 3 2008
Posts: 5263
gold vs silver

If I were going to choose between silver and gold at this moment (independent of the weight/bulk considerations), I'd pick silver, because the gold/silver ratio is > 80.

Not financial advice, etc.

BBrady's picture
BBrady
Status: Member (Offline)
Joined: Dec 11 2011
Posts: 12
Gold vs Silver

The point of owning gold or silver coins is to store value. The question then is what you are trying to accomplish.

As of the close of market today, you can buy a 1-oz gold eagle for $1,396 or a 1-oz silver eagle for $19.87 (or $18.87 in bulk). For $20,000, you could acquire 14 gold coins, or 1,060 silver coins - or some combination thereof.

If you don't plan to need your coins for an emergency and just want to hold wealth outside the fiat currencies, then gold is the easier option because it takes less storage space and you don't pay such a premium for being in coin format. However, if you think you may actually need to use your coins during an emergency to buy food or a tank of gas, then silver is your answer. The problem with gold coins comes when you want to convert them because their value is so high. How will someone give you change in an emergency?

It sounds like you already have the equivalent of two monster boxes of silver. That is a good foundation for emergency purposes. Perhaps some gold coins now would provide some diversification.

As to where to buy, I find the best prices at APMEX and Gainesville Coins.

JamesD's picture
JamesD
Status: Member (Offline)
Joined: Mar 10 2011
Posts: 1
Gold or Silver Coins or Gold or Silver Bullion

Dear Member:

 I am pleased to inform you that I have enjoyed a personal relationship with some of the World's foremost experts on Gold and Silver, experts who appear at conferences, on TV, on Radio, on the Internet et al. during the past 9 years. I am 76 years young and pride myself on giving folks like you sound advice.

I hold very large physical inventories of Silver Coins and Bullion, and implore you to consider taking your discretionary capital now and contacting my good friend, Andy Schectman of Miles Franklin, Wayzata, Mn and either purchase 1 0z  Silver bullion rounds or 10 oz Silver Bullion bars with all of this capital.

If/when you have more discretionary capital to invest, contact Andy again and secure his best terms for some Canadian Mint  Maple Leaf Gold Coins to add to your collection.

I lost $3200 in 2016 with NorthWest Territorial Mint insolvency, which compels me to reinforce that you should avoid the lowest price quote, and stick with proven, highly reliable dealers like Miles Franklin. Tell Andy if you talk to him to place an order, that Mr James Mac Isaac referred you, and your order will get his special attention and personal handling. We are good friends and I am pleased to refer buyers to his Organization.

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