PM Daily Market Commentary - 8/22/2013

davefairtex
By davefairtex on Thu, Aug 22, 2013 - 4:59pm

Gold finished the day up 4.40 on average volume to 1370.70, with silver up 0.18 to 23.03 on moderately heavy volume  The gold/silver ratio dropped to 59.51.  Gold tested both the upper and lower ends of its range, testing 1354 early in the day in asia, and 1381 soon after the NY open.  Both gold and silver are trading in a relatively narrow range: gold from 1350-1385, and silver from about 22.50-23.50.  Gold's movement has a slight upward bias, and appears to be performing slightly better, even though that didn't show up in the gold/silver ratio today.

The dollar was up +0.37% on the day.

Mining shares regained some of what they lost yesterday, opening above yesterday's close - GDX was up +1.52% and GDXJ +0.64%.  Volume was relatively heavy, but lower than in recent weeks.  It was largely a day of indecision, reflected by the doji candlestick print on GDX which mirrored the prints on gold and silver.  It would seem that the mining shares have a modest downward bias to them at the moment.

Given the high volume sell-off in the miners yesterday I expected more downside action today; the fact it didn't occur I'll interpret as modestly bullish.

14 Comments

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5059
new home sales; bad report = good news for PM

Silver & gold both broke out to new highs following a bad new home sales numbers at 10:00 EST.  Bad news, is of course, good news these days.

http://mam.econoday.com/byshoweventfull.asp?fid=456335&cust=mam&year=2013&lid=0&prev=/byweek.asp#top

Market was just waiting for a catalyst like this, in my opinion.

If the housing market starts going down, perhaps Mr Bernanke will keep the pressing rolling.

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
Joined: Jun 7 2007
Posts: 5568
Massive volume on that gold breakout

Always good to see a short covering panic now and then...with high volume to boot.

Both gold and silver up very nicely on great volume.

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2379
Big round numbers 1400 and 24 dead ahead...

Take them out and we will see another spike from there...  I am positioning for such with some temporary leverage on top of my miners and PHYS.    

thc0655's picture
thc0655
Status: Diamond Member (Offline)
Joined: Apr 27 2010
Posts: 1512
Tapped out

I have drawn down my emergency cash stash as much as I dare to buy gold several times since April, including this week. I'm just sitting back enjoying the upward momentum (and all the more in the August doldrums)! When it peaks at $6000, $7000, $10000 or whatever, I'll look back fondly at this extended "sale" since late 2011. I never would have thought I could take advantage of such fire sale prices.

Adam Taggart's picture
Adam Taggart
Status: Peak Prosperity Co-founder (Offline)
Joined: May 26 2009
Posts: 2933
Way to call it, Jim

Your big round numbers just got hit

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5059
PM short covering

I think the week spent moving sideways sucked a number of shorts into the market.  Some sort of a correction seemed to be a likely outcome; and when it didn't happen, that short-covering provided a good chunk of the fuel for the initial breakout.

Miners overall look to be a bit lukewarm on the whole move.  GDX still hasn't broken out.  That's the only sour note for me.

It will be instructive to see how we close today.  Do traders want to hold these gains going into the weekend?  Monday in asia is always an opportunity for something exciting to happen...in either direction...

 

dryam2000's picture
dryam2000
Status: Gold Member (Offline)
Joined: Sep 6 2009
Posts: 279
Options Expiration Aug. 28th

For people considering buying more PMs in the near future, consider the fact that options expiration is next Wednesday.  The COMEX has a pretty good history of a beatdown near expiration dates.  If there is a large drop next Wednesday, then that might be a great time to buy.  The fundamentals look pretty good right now.

gillbilly's picture
gillbilly
Status: Gold Member (Offline)
Joined: Oct 22 2012
Posts: 423
Congrats Jim!

Does this mean you and DaveF are on the same side now? Bummer!wink

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2379
Hi Gillbilly

Of late DaveF has been saying much less that I find controversial ... the most recent remark that I recall feeling the need to respond to was his saying that 500 tons of paper Gold dropped on the market in a short timeframe may not have mattered (caused a price drop) under certain conditions.  If there are 170K tons of Gold extant in the world, then 500 tons is 1/340th of ALL Gold ever mined throughout history.  That is kind of alot - in fact there are only 12 countries in the world that hold more Gold than that.  To me, a comment like that is purposeful, to obfuscate the reality of what is going on and to make it seem like Gold is plentiful... which it is decidely not when it comes to PHYSICAL Gold immediately available for delivery, in size.  This is what negative GOFO continues to tell us.    

It feels so good to get out of that hot, sweaty Gold warrior suit on the weekends... what with Gold not trading and all.           

Nervous Nelly's picture
Nervous Nelly
Status: Silver Member (Offline)
Joined: Nov 23 2011
Posts: 209
Happy Dance for me

yogiismyhero's picture
yogiismyhero
Status: Silver Member (Offline)
Joined: Jun 28 2013
Posts: 173
Happy dance for me two (too)...

Nate's picture
Nate
Status: Platinum Member (Offline)
Joined: May 5 2009
Posts: 573
FWIW

Update from my local PM dealer today (central California). 

1) The public is starting to call and ask about PM's.  This is new.  My take is that this is the beginning of the final leg of the PM bull market.

2) Two individuals have written large checks (prepaid) to purchase ALL incoming junk silver. The dealer did not share how long it would take to fill these orders.  Availability of 90% silver is gone for the little guy.  Junk spreads larger than Eagle spreads. Go figure.

3) The PM dealer purchased lots of Silver Eagles during the past downturn.  Happy Camper.

4) Much more interest in silver than gold.

5) He feels the bottom is in.

6) His future concerns are availability of "product".  He is thinking about how to deal with future shortages without impacting his business.

7) He is considering treating "premium" customers differently than "newbies".

 

 

 

 

 

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2765
Careful what you wish for

The general public starting to catch on? What to do? 

Perhaps a distraction may help...Syria

robie robinson's picture
robie robinson
Status: Diamond Member (Offline)
Joined: Aug 25 2009
Posts: 1148
Syria?

I've sufficient concern to fill farm diesel tanks before either  Syrian issues or fall winter issues affect the price too much. Been holding off for a late summer sell off  in equities and margin calls to affect commodity prices, but.... i'm in.

 

robie

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