PM Daily Market Commentary - 11/27/2013

By davefairtex on Wed, Nov 27, 2013 - 8:42pm

Gold closed down -4.20 to 1237.40 on moderately heavy volume, while silver closed down -0.22 to 19.58 on light volume.  The gold silver ratio rose +0.49 to 63.18.  Gold rallied in europe, hitting 1255 at one point, only to sell off through the close in NY, all the while being hit repeatedly by moderately sized short assaults eventually touching 1235.

I say "short assaults" because that's how the tape looked to me today; sometimes gold just sells off because there aren't any buyers, and other times, there seem to be clear, repeated attempts to drive the price lower, with each rally attempt being actively sold.  Thats how it looked today.  What's more, the moves down in gold did not coincide with any particular news release, so that is why it appeared to me to be tactical manipulation.

The dollar rose +0.11 [+0.14%] to 80.75.  Today the dollar tested 80.50 and rebounded, the rise in the dollar happening intraday at about the same time as the drop in PM.  The dollar-gold interaction may be back.  The 80.50 level is the bottom of that descending triangle in the buck - descending triangles often break down, and so a close below 80.50 might well lead the buck down to the 79 level once again, which would be gold price positive.

GDX rose +0.69% on light volume, while GDXJ dropped -0.32% also on light volume.  GDX held up well today given gold's weakness.

Today was a relatively light trading day given the upcoming US Thanksgiving holiday, so it is tough to read too much into today's action.  The price action looked a bit manufactured in gold, but it is hard to know what that means other than "someone wanted to move the price lower."  The fact GDX did well says there is at least some kind of bid in PM.  Certainly today wasn't bullish - perhaps the best I can say is, it wasn't as bearish as it could have been.

Downtrend remains in place.  Gold needs to close above 1260 to reverse course.


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