PM Daily Market Commentary - 6/10/2014

By davefairtex on Tue, Jun 10, 2014 - 9:50pm

Gold closed up +7.90 to 1260.00 on moderate volume, while silver closed up +0.14 to 19.18 on moderate volume.  Metals started climbing early in asia trading, faded a bit in London, and then spiked $8 higher at 0822-0824 EDT on some heavy volume.  Gold closed the day keeping most of its gains.  Silver managed to close above its 20 EMA, which is a bullish sign.  I didn't see any news that caused the move.

The buck continued climbing, closing up +0.16 to 80.82 - there was no sudden spike, just a general buying pressure all day long.  While the USD has not surpassed its spike high from the ECB meeting, it has made a new closing high for this cycle.  Surprisingly, the USD strength has not seemed to impact gold at all.  The dollar is looking quite strong.

GDX opened higher because of gold's 0822 rally, and then moved higher, with much of its gains coming in the last hour of trading; GDX was up +2.13% on moderate volume, breaking through and closing above its 20 EMA at the high for the day.  GDXJ did even better, closing up +4.54% on very heavy volume, breaking through its 50 MA and closing at the high for the day.  This is the first close above the 50 MA for GDXJ since the big selloff this March.  In addition, the EMA 20 for GDXJ is now starting to curve higher.

Price and volume action in the juniors say that ... gold is back, baby!  The metal itself seems to be lagging more than a bit, but traders are backing up the truck for the juniors.  Likely there is also some short covering on the breakout today.

SPX was flat today, not much happened of note.  VIX dropped again, moving down to 10.99, not quite a 7-year low, but close.

Bonds (TLT) were off -0.37%, closing below the 50 MA for the first time in several months.  If the equity market ever starts to correct, bonds will likely benefit.  Right now though the continued move higher in SPX is most likely the reason for the bond weakness.


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