PM Daily Market Commentary - 9/11/2013

By davefairtex on Thu, Sep 12, 2013 - 1:48am

Gold was up $2.20 on light volume to 1363.30, with silver up $0.22 to 23.23 also on light volume.  The gold/silver ratio dropped to 58.79 - the gold/silver ratio has been chopping sideways for a month now with PM in correction mode.  Silver actually managed a gain today; it made a new cycle low at 22.78 in early trading in asia and then ended up closing the day in NY at the high.  I would say this is mildly bullish, except for the total lack of volume.  Perhaps the lack of volume in both gold and silver is driven a market awaiting the taper outcome next Wednesday.

The dollar was down strongly today, off -0.33 [-0.40%] to 81.50.  The buck closed below its 200 day MA, and now appears to be headed to re-test the lows at 80.75.  One interesting outcome - the buck could be approaching a "death cross" - when its 50 day MA crosses the 200 MA to the downside.  That's the sign of a major trend change for longer term traders, and may well bring on more dollar selling.

This, along with some other indicators suggests to me that we may be close to a top in 10 year US rates for a time.  (The constant newsflow about rates is also another contrary indicator for me; who on earth is still holding US long bonds with all this negative press and the talk about tapering?).  But I digress.

Gold miners may have put in a reversal day today.  GDX was up +0.83%, GDXJ was up +0.48%.  GDX bounced at or near its 50 day MA, volume was moderately high (although still not higher than the series of down-days preceeding it), and it printed a small dragonfly doji closing at the day highs.  Intraday, it displayed an ascending triangle, which is generally a bullish pattern.  This reversal pattern requires confirmation tomorrow to be valid.  If GDX price moves above today's close, that's confirmation; if it happens, a trader could buy that move, and place a stop below today's low of 26.20 in case the market changes its mind.

Helping me with this possibility are a couple miners which tend to be "tells" in the market for me; SLW put in a reversal doji yesterday and it was confirmed today, while GG (Goldcorp) looks to have reversed today on some decent volume after a terrible day yesterday, awaiting confirmation tomorrow.


davefairtex's picture
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about that descending triangle in gold & silver...

So this is a good example of what happens when one of those descending triangles breaks support.

Namely, silver down -0.98 [-4.24%] gold down -34.10 [-2.49%] on some pretty good volume.

No buyers at the moment.  Gold dropping $33 prior to NY open should have an interesting effect on GDX.  Will it be sold all day long, or will it find support?

This is also why we wait for confirmation after GDX has "a reversal day."  Somehow with gold off $33 I don't think we'll be seeing that confirmation today...


Adam Taggart's picture
Adam Taggart
Status: Peak Prosperity Co-founder (Offline)
Joined: May 26 2009
Posts: 3248
Overnight raid "breaks" the gold market

From Zero Hedge/Nanex:

Vicious Gold Slamdown Breaks Gold Market For 20 Seconds

As the two charts below from Nanex demonstrate, overnight just before 3 am Eastern, a block of just 2000 GC gold futures contracts slammed the price of gold, on no news as usual, sending it lower by $10/oz. However, that is not new: such slamdowns happen every day in the gold market, and the CFTC constantly turns a blind eye. What was different about last night's slam however, is that this time whoever was doing the forced, manipulation selling, just happened to also break the market. Indeed: following the hitthe entire gold market was NASDARKed for 20 seconds after a circuit breaker halted trading!

Read full article here.

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