PM Daily Market Commentary - 1/09/2014

davefairtex
By davefairtex on Thu, Jan 9, 2014 - 11:08pm

Gold closed up +1.80 to 1226.80 on moderate volume, silver closed up +0.02 to 19.53 also on moderate volume.  The gold/silver ratio was essentially unchanged, +0.01 to 62.80.  Gold traded sideways most of the day, with a slightly upward bias but a narrow trading range.  Silver did much the same, although its range was slightly larger.

The dollar retreated a bit, closing down -0.11 [-0.14%] to 81.07.  The buck attempted to rally to new highs following the mildly positive Jobless Claims report, but the rally failed and the dollar sold off into the close, helping PM to rally back from a mild loss.

GDX had its first bad day in a while, closing down -1.57% on light volume, with GDXJ down -1.96% on average volume.  Both mining indexes closed below their 20 EMA, and the move was mildly interesting only because the metals themselves closed flat.  Presumably a flat close in the metals should not have led to a miner selloff, as mild as it was, but it did.  Miners were sold most of the day, and closed at the low.  GDX is now well back into its consolidation box, having failed to break out last week.

The mildly bad day for the miners has tipped the GDX:$GOLD ratio into looking like it might want to be heading down - its not there yet, but it would not take much of a push to nudge it into a bearish posture.

The overall commodity complex is not helping things at all.  Driven perhaps by oil, the $CCI has dropped down to near the November 2013 lows.  If you were a prospective buyer of COMEX gold contracts with the motivation of protecting yourself from commodity-price inflation, perhaps you would look at the following commodity chart and find no reason to buy.  I believe a decent percentage of western buyers are motivated by exactly this.

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davefairtex
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Joined: Sep 3 2008
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Nonfarm Payrolls - big miss - gold +18

Big miss in the NFP data released at 0830 EST - 200k expected, 75k seen, which lends support to those who imagine the Fed won't taper.  Yes, we're back to taper/no-taper.

After the initial break up, gold traded sideways for a time, and has now started to climb even further, scoring a new cycle high of 1248.  If gold manages to break 1260, it could get very exciting.

Silver too has awakened from its slumber, but has not yet managed to catch up to gold, relatively speaking, even though it's having a good day also.

Miners up nicely - some of the ones I view as "tells" are doing especially well.  GG (Goldcorp) has clearly broken out and is above its 50 day MA, and SLW (Silvercorp) is also moved above its 50 MA, but has yet to break out.  These two are favorites of the fund community, and they attract money from the big guys when PM starts to become attractive again.

The close is all-important.  If miners are bid well into the close, its quite bullish.

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