PM Daily Market Commentary - 5/8/2018

davefairtex
By davefairtex on Wed, May 9, 2018 - 7:46am

Gold rose +0.40 [+0.03%] to 1315.00 on very heavy volume, while silver inched up +0.01 [+0.06%] to 16.50 on moderately heavy volume. The buck climbed +0.39% today; the metals did fairly well, given that move. The big news was that Trump pulled out of the Iran nuclear deal.

Gold sold off with the falling Euro, but started to rally at about 10 am, managing to end up even on the day.  Print was a doji candle, which was bullish. The forecaster fell -0.16 to -0.08, which is a sell signal for gold. Gold in Euros continues to rise – in fact, it appears to have staged a minor breakout above its previous high just today.  ON the chart, gold appears to have some decent support at the 200 MA.

COMEX GC open interest rose 4,214 contracts.

Rate rise chances (June 2018) fell to 95%.

Silver also tried to sell off today, but bounced back fairly strongly, printing a neutral doji candle on the day. Forecaster jumped +0.19 to +0.11, which is a buy signal for silver. Silver is above the 9 MA, but below both the 50 and 200.  Silver really needs to move above that 50 to convince me that the selling is over.

COMEX SI open interest rose by 1,837 contracts today.

The gold/silver ratio fell by -0.02 to 79.67. That's neutral.

Miners sold off early, but came back strong in the afternoon; GDX rallied +0.13% on moderately heavy volume, while GDXJ moved up +0.21% on moderate volume. XAU forecaster climbed +0.07 to -0.21, which is still a downtrend.  Still, it was a strong day for XAU, which rallied +0.83%, coming back from a moderately large early loss.  I thought the miners looked pretty good today.  Maybe its a tell.

The GDXJ:GDX ratio moved up slightly, as did the GDX:$GOLD ratio. That's neutral.

Platinum moved up +0.14%, palladium fell -0.19%, and copper dropped -0.11%. That's not much movement. Palladium issued a sell signal, and platinum is quite close to doing so also. Copper had a very large trading range – it sold off hard, but bounced back strongly as well.  The move in copper wasn't about Iran.

The dollar rose +0.36 [+0.39%] to 92.74, which is a new high for the buck. Forecaster rose +0.07 to +0.30, which is a fairly strong uptrend. The dollar continues to do very well. That's mostly because of the falling Euro, which was off -0.50% today; Euro has dropped in almost a straight line since the latter half of April.

Crude moved up +0.04 [+0.06%] to 70.01, selling off hard (off more than $2) on a rumor that the Iran deal would stay in place, only to rally sharply back once the US pullout was announced. Volume was immense. The doji candle was bullish, but forecaster fell -0.38 to +0.20. That's still an uptrend, but forecaster didn't seem to like the long lower shadow on today's candle.

SPX edged down -0.71 [-0.03%] to 2671.92. There was a sharp sell-off in the afternoon, but the market rapidly recovered. Energy did best (XLE:+0.70%) while utilities were clobbered (XLU:-2.50%). I'm not sure what that move was about in utilities. Most sectors fell today, but the map looked somewhat bullish.

VIX fell -0.04 to 14.71.

TLT fell -0.09%, and issued a sell signal. TY looked even worse, dropping -0.19%, and dropping deeper into a downtrend: forecaster fell -0.26 to -0.65. The 10 year treasury closed at 2.97%.

JNK moved down -0.11%; JNK remains in a slight downtrend.

CRB plunged -1.55%; only 2 of 5 sectors fell, led by energy (-1.94%). I think this is an artifact of the close time for commodities. Much of oil's strong rally came after the pit close of 2:30 pm. We'll have to see what it looks like tomorrow.

While the Iran announcement caused a lot of volatility, most everything just ended back where it started from – so not a lot happened today.

Bonds are starting to weaken once more; we may see a move through 3% in the near future. The trend is in favor of this outcome – the 10-year rate is in a uptrend in both weekly and monthly timeframes.

Gold in Euros is continuing to improve. If it continues, that should help gold avoid moving lower if the buck continues to rally.  The daily charts in the metals look ok, given how well the buck has done.

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