PM Daily Market Commentary - 11/18/2013

By davefairtex on Mon, Nov 18, 2013 - 11:26pm

Bitcoin closed up +275...uh I mean gold closed down -14.40 to 1269.20 on average volume, while silver closed down -0.38 to 20.39 on moderately heavy volume.  The gold silver ratio climbed +0.45 to 62.54.  Gold traded sideways in asia, started to fall in europe, and then sold off in NY, closing relatively near the low. 

Silver followed much the same pattern but blew through support, hitting a new cycle low of 20.28.  Silver is still seriously underperforming gold - the gold/silver ratio shows this pretty clearly, as it is breaking to new cycle highs.

The clear upward move in gold/silver ratio is bearish for PM.

Silver breaking the important 20.50 support level and closing below it will likely encourage the shorts, which will lead to more selling in silver, which will probably drag gold down with it.  At each sell-off we are waiting for the COMEX buyers to show up in both silver and gold.  So far, they haven't.

The dollar dropped today -0.10 [-0.12%] to 80.78.  The USD hit 80.60 at one point and then rallied back, showing a bit of USD support.  The buck does not appear to know where it wants to go just yet, and the modestly falling dollar did not seem to help gold or silver in the slightest today.

GDX closed down -1.93% today on moderate volume, with GDXJ off -2.17% on heavy volume.  Miners opened low, and sold off through mid-day, and then traded sideways into the close.  Gold and silver's drop is dragging down the miners which up until now were doing relatively well; at this point, miners are just following the metals lower.

As Hrunner observed, PM seems to need some sort of catalyst to get the COMEX buyers to return.  Not even the prospect of uber-dove-Yellen in charge of the Fed Printing Engine could get gold to rally for more than a couple of days.  In trading, we like to say that its not the news that matters, its the market's reaction to the news that counts.  And the reaction was: a massive yawn from the buyers.

That's bearish.

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