PM Daily Market Commentary - 6/30/2014

By davefairtex on Tue, Jul 1, 2014 - 12:33am

Gold closed up 11.80 to 1327.80 on moderately heavy volume; silver was up +0.15 to 21.06 on heavy volume.  Gold sold off mildly in Asia and London trading, only to rally back starting at 0800 in NY, finally breaking out to new highs in the afternoon in NY.  Silver followed along, but for a change, moved up less than gold and failed to score any new highs today.

Gold rallied right up to a previous high dating back to mid-April, which appeared to act as resistance for its move higher.  [n.b. in early asia trading Monday evening/Tuesday morning, gold momentarily broke above that previous high to 1334, stopping out about 3k shorts in one of those "market manipulation spikes" we all know and love by now, but dropped back down afterwards.]

The buck fell hard today, closing down -0.26 at 79.81.  There was no one story causing the move that I could see - it started falling in London and the drop picked up speed through the morning in NY.  It is possible this brisk drop helped to provide support for PM today and encouraged the gold breakout.

Mining shares climbed today, with GDX up +1.81% on moderately heavy volume, and GDXJ up +4.24% on very heavy volume.  GDX scored a new closing high for this cycle today, while GDXJ is still a bit behind.  Still, the price and volume action on the miners looks quite strong, and they could be saying that the very modest drop we saw last week is all the "correction" we're going to see before the next leg higher in PM.  If true, that would be very bullish for gold - because it says traders are afraid to miss out and so they start buying every dip.  This is something we've seen in the equity market for a long time now; perhaps it is coming to the gold market too?

The SPX was down -1 point today, closing at 1960.  VIX was up +0.31 to 11.57.

TLT (bonds) were up a bit, +0.25%.  Bonds are slowly working their way back up to the cycle high.

Brent crude continued its retreat from the highs, down -0.94 to 112.36.  It does not look like the crisis in Iraq is causing an oil panic, but the uptrend in oil is definitely still in place.  A pattern of higher lows and higher highs tells us this.  Brent would have to correct below 108 to invalidate the uptrend.   Oil at 111-112 looks to be pretty strong support.


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