PM Daily Market Commentary - 10/30/2013

davefairtex
By davefairtex on Thu, Oct 31, 2013 - 1:04am

Gold closed down -1.90 to 1342.60 on moderately heavy volume, and silver closed up +0.19 to 22.73 on heavy volume.  The gold/silver ratio dropped -0.60 to 59.08.  Today was the FOMC minutes release; prior to that release, silver had hit 23 before NY open, and stayed there right up until the release of the minutess at 14:00 EST.  Immediately after minutes release, it was pounded down to 22.43, a big move.  Gold had a similar pattern, but with less of a drop.

The buck was up +0.08 [+0.10%] to 79.78.  Immediately after the FOMC minutes release, the buck surged to 79.98, and then fell back to close up only modestly.

GDX closed the day up +1.73% on moderate volume, while GDXJ was up +1.12% on average volume.  GDX has now moved back above its 50 day MA, and it printed a long legged doji.  Immediately after the FOMC minutes were released GDX started selling off hard.  The move down didn't last, however, and GDX regained all the ground.  This doji result with some decent volume suggests dip buyers appeared when GDX was down, and that is bullish.

It is still a mixed picture today.  The GDX recovery after a hard drop post-Fed was bullish, however the downside reaction of gold and silver post-Fed is definitely bearish, while the buck is uncertain.

 

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davefairtex's picture
davefairtex
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Joined: Sep 3 2008
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PM hammered; bullion banks or...

A few days ago momentum seemed to be slowing in PM.  After a couple of days of indecisive (but worrisome) back and forth, first selling in GDX and then and yesterday's sell-off post FOMC meeting release, the shorts were out in force today early in asia and throughout the day.  Gold and especially silver were pounded, with silver off almost 70 cents as of right now.

At the same time, the dollar has continued rallying, moving above 80 (now 80.17) and making new highs for this cycle.

Including today, this makes 4 straight green days for the buck.  Right now, this is creating a pressure on the price of gold.  One might think that the gold market is small enough to control, but the USD currency market is vast.  It moves where it wants.  The buck has gone down for quite a while, and as I have mentioned before, it was likely due for a bounce.  79 support held - buck is rising, and the euro is dropping (euro off 0.90% today - a big move).

So, do "the evil bullion banks" just short at random moments, whenever they feel like it, or are these attacks correlated with other price action - do they happen when the dollar is rising, when momentum in PM has waned, and the odds seem like it might favor a bear attack?

Well you know what I think.  Right now, I'm waiting for the (COMEX, GLD) buyers to make an appearance.  The next time a bear attack gets bought, that's when they will back off, and the uptrend will resume.  For now, however, caution is warranted.

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