PM Daily Market Commentary - 2/25/2014

davefairtex
By davefairtex on Wed, Feb 26, 2014 - 12:26am

Gold was up again today, +4.70 closing at 1342.70 on moderately heavy volume, setting yet another new high, seemingly unstoppable heading inexorably to 1360 resistance.  Silver was off -0.09, closing at 21.96 on very heavy volume.  Silver is starting to lag gold a bit, resulting in the gold/silver ratio rising +0.46 to 61.13.

Does anyone remember when gold was $1200?  That was so $142 dollars ago - but less than two calendar months.

The USD continued drifting lower, closing down -0.06 [-0.07%] to 80.19 modestly, down -0.05 [-0.06%] to 80.25.  Continued downside for the buck is likely good for gold.

GDX was off -1.39% on moderate volume, and GDXJ was off -2.86% also on moderate volume.  Miners off when gold rose is not a bullish sign.  What's more, GDX is showing a perfect bearish divergence in the RSI momentum indicator - that's TA talk for a top forming because of a slowing of the upward momentum.  "Rising prices with a set of ever-lower peaks for the RSI = bearish divergence."  These technical indicators aren't sure-thing signs, but they're a clue.  Its why I said yesterday that I felt miners "were getting tired" - I sensed this bearish divergence.  Still, this happened before in January with no ill effects - its just something to watch.

Commodities may be starting to peak out - the commodity index was off -0.15% today.  However, the commodity index has just had its "golden cross", with the 50 MA crossing over the 200 MA.  This is the result of an extremely strong move in commodities over the past four weeks.  Even if commodities correct here, that golden cross will most likely remain intact.

The golden cross gets the attention of longer term trend-based traders, who may now start to think about buying more commodity futures, including gold and silver.  Whatever is good for commodities is most likely also good for PM.

 

 

3 Comments

Nate's picture
Nate
Status: Platinum Member (Offline)
Joined: May 5 2009
Posts: 605
Thanks

Dave,

Thanks again for taking the time and effort to put these Daily Market Commentaries together.  They are very much appreciated by me.

Nate

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 656
Second Nate's Comments

Dave.  You are indispensable to my decisions, especially regarding the theories and practices of PMs.

And the wonderful FREE educational insights.  Why didn't we learn this stuff in college???

robie robinson's picture
robie robinson
Status: Diamond Member (Offline)
Joined: Aug 25 2009
Posts: 1223
lets make it unanimous

I, too, profit from your efforts.   robie

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