PM Daily Market Commentary - 2/12/2014

By davefairtex on Wed, Feb 12, 2014 - 11:42pm

Gold closed up +0.50 to 1291.60 on light volume, and silver closed flat, remaining at 20.22 on very heavy volume.   The gold/silver ratio rose +0.01 to 63.88.  Gold traded in a relatively narrow range, making a new high to 1296 but then retreating back to flat at the close.  Silver looked quite similar, except for the heavy trading volume, which looks worrisome. Heavy volume on a "doji" candle can signal a reversal of the current trend, which would be bearish for silver.

The USD attempted to rally and failed, closing up +0.03 [+0.03%] to 80.75.  The buck is not looking strong, which should encourage gold and silver.

Recall yesterday I said I haven't seen signs of distribution. Well today, GDX sold off hard, down -3.43% on heavy volume, losing all the gains from yesterday and then some, closing back below the 200 MA.  GDXJ looked similar, off -4.37% also on massive volume.  Traders looked to be ringing the cash register on the decent rise in the mining shares.

Whenever I see mining shares selling off hard when PM is flat, it suggests to me that an interim peak may have been made, with a sell-off to follow.  Add to this the high volume silver doji, and it leads me to believe that absent some specific gold-positive news, we may have seen the highs in PM for a time.

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