PM Daily Market Commentary - 10/3/2013

By davefairtex on Fri, Oct 4, 2013 - 2:16am

Gold closed up +0.30 to 1316.70 on moderate volume, with silver down -0.05 to 21.69 on light volume.  The gold/silver ratio rose slightly, up +0.14 to 60.71.  After yesterday's big move, gold sold off steadily in asia and european trading, losing almost $15 right up until the time of the Jobless Claims report at 0830 EST, after which gold and silver both started to move higher.  That's perplexing because the jobless claims report looked reasonably good, so this wasn't about tapering or not tapering as far as I could tell.  While they regained their losses, neither gold nor silver were able to make new highs today.

Silver needs to close above 22 and preferably 22.25 before the shorts are going to start getting worried.

The buck dropped again today, down -0.11 [-0.14%] to 79.88, seemingly headed for 79 which is its next support level.  If the falling buck is helping gold, it is not helping much.

I hate to keep saying the same thing, but mining shares once again were up in the morning, and after making their day highs at 10:00 they sold off all day.  Again.  This time they closed at the dead lows, selling off into the close.  If traders want mining shares, they are hiding it well.  GDX was down -0.94% on light volume, GDXJ down -1.22% on light volume.  I'm not sure who buys mining shares in the mornings - hope must spring eternal or something.

PM didn't get any help today from the other markets - copper was off -0.92%, oil down -0.89%, and SPX was off -0.90%.  It seemed a bit like everything was being sold.

The GDX:$GOLD ratio is continuing to drop, approaching its lows last set in July.  This chart describes the extent to which miners are underperforming gold.  It is similar to the gold/silver ratio - for PM to be in an uptrend, GDX:$GOLD should probably be climbing.  You can see from this weekly chart that we haven't had much of an uptrend for PM since - well since early 2011.  It also puts into perspective the modest six-week miner rally that started three months ago.


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