PM Daily Market Commentary - 2/18/2014

davefairtex
By davefairtex on Wed, Feb 19, 2014 - 12:34am

Gold closed up +3.30 to 1322.20 on heavy volume, and silver closed up +0.47 to 21.95 on extremely heavy volume.   The gold/silver ratio dropped -1.15 to 60.24.  While the US markets were closed for President's day, gold traded higher hitting 1332, but sold off Tuedsay ending more or less where it began.  Silver on the other hand made a new high and closed near the highs, greatly outperforming gold.

The USD dropped again, closing down -0.12 [-0.16%] and closing at 80.06.  The buck keeps moving lower; it is a bit oversold and near support, and so the buck has a decent chance of rebounding at least a bit in the near future.  This may well slow down the gold ascent, at least for a while.

Commodities continue to blast higher, today rising by a huge 1.79%.  Something has the commodity complex on fire - perhaps it is the indications from China that their credit growth machine is back on track.  Commodities are very overbought, with RSI-7 at 92.  The parabolic move can't continue forever, but while it lasts, it will likely propel silver higher.  Oil closed at $103 today, up +2.75 in a massive move. 

GDX moved modestly higher, up +0.42% on light volume.  GDXJ sold off, down -1.27% on heavy volume.

I'm expecting a correction to happen soon in PM and the miners, but who knows exactly when it will show up.  If the buck keeps moving lower, gold may continue to rise.  Likewise, a move higher in commodities could drag silver up as well.  I believe risk is high - although I said that on Friday, and silver popped another 47 cents today on some pretty massive volume.

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