PM Daily Market Commentary - 2/24/2014

By davefairtex on Tue, Feb 25, 2014 - 4:05am

Gold continued its steady move higher, up +12.00 to 1338.00 on moderately heavy volume, breaking to a new high in the process.  1360 is the next resistance level for gold.  Silver also closed higher, up +0.22 to 22.05 on very heavy volume.  The shorts attempted to hammer silver lower early in asia trading, but the dip was bought - like almost every PM dip has been bought since the beginning of February.

I hate to sound like a broken record, but the commodity complex continued higher once again, up +0.51% - the momentum indicator on the CCI is at nosebleed levels.  Commodity shorts must be in a whole lot of pain right now, since the move higher has shown no signs of stopping.  Commodities have been up 14 days out of the last 16.  This sort of unrelenting move higher is quite uncommon.  Is this just a decision by some group of bankers to hose the managed money shorts in commodities?  Its enough to make you believe in conspiracy theories.

The USD dropped modestly, down -0.05 [-0.06%] to 80.25.  The buck traded in a narrow range today, but it remains caught in its modest downtrend.  The dollar is trading below its 20 EMA, and it is pulling the 20 EMA ever lower, and the other moving averages are starting to drop too, which all looks bearish.

Mining shares are looking a bit tired - GDX was up only +0.64% on light volume, while GDXJ was up +2.03% on moderately heavy volume.  Senior mining shares made new highs; they opened up, but were gently sold all day long.  Juniors couldnt make a new high, but seemed to do a bit better.  It just looks to me as if buying has dried up, at least for now.

So far, there is nothing bearish on the horizon - just that it seems a bit harder to find enthusiastic buyers for mining shares after such a long move up.

I take that back.  Shanghai is now moving more seriously into discount; as of earlier on Monday, the Au9999 contract was trading at a -6.70 discount to COMEX.  Rising gold prices have taken a toll on the Chinese physical gold buyers.  And while delivery volumes at Shanghai are still high, shorts now outnumber the longs, which confirms the move into discount and is generally bearish.

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