PM Daily Market Commentary - 11/05/2013

davefairtex
By davefairtex on Tue, Nov 5, 2013 - 6:51pm

Gold closed down -2.60 to 1311.60 on light volume, and silver closed up +0.06 to 21.70 also on light volume.  The gold/silver ratio fell -0.27 to 60.44.  Gold tried to move above yesterday's high just before the NY open, failed, then made a new low after a positive non-manufacturing ISM report at 1000 EST, touching 1305, and then rallied back up modestly into the close.  Silver traded in a narrow trading range all day long, closing where it opened.

It appears that gold is uncertain about whether or not the Fed will taper, since it is still reacting poorly to positive economic news.  Fed jawboning still seems to have an effect.

The buck moved up +0.17 [+0.20%] to 80.80, recovering the losses from yesterday.  It remains above its 50 day MA for the third day, which is now acting as support.  Looking at the chart it feels like the dollar is resting on the 50, gathering its strength for a move higher.  This is a good sign if you are betting on a dollar rise.  The euro, the main counterpart to the buck, dropped 0.30% and closed below its 50 day MA, a bearish sign for the euro.

GDX opened down, and sold off for most of the day, recovering much of its losses in the last few hours of trading.  GDX was down -1.29% on light volume, and GDXJ was off -1.64% also on light volume.  Let's call the price action here slightly bearish, but the recovery at end of day was a hopeful sign.

Light volume in PM makes it difficult to draw any conclusions.  So current trends stay in place, which is down for PM and a neutral reading for GDX.  However right now it feels like much still depends on the USD, which from price action appears to be at the brink of staging a breakout to the upside.

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