PM Daily Market Commentary - 7/3/2014

By davefairtex on Fri, Jul 4, 2014 - 3:02am

Gold closed down -7.60 to 1320.40 on heavy volume; silver was off -0.03 to 21.17 on moderate volume.  Gold sold off starting in asia, culminating in a spike lower at 0830 EDT, the time of the Employment Situation report, which was seen in the mainstream media as quite positive.  Still, the spike lower (gold hit 1309, and silver 20.82) was promptly bought, with silver in particular recovering most strongly and closing almost even on the day.

According to bloomberg:

Job growth blew past expectations and the unemployment rate fell to the lowest level since before the financial crisis peaked six years ago, creating a firm foundation for a stronger U.S. economic expansion.

Since Bloomberg didn't provide you a chart, I will:

Turns out, the boom is in part-time employment.  +800k workers hired as part-time employees.  Woo hoo!  I have a new title for Bloomberg: "500k FTEs lose their jobs, but 800k PTEs are hired, making the payroll numbers look really good!"  Or alternatively, Auto Workers become Wal-Mart Greeters!

The dollar continued its rally, spiking momentarily much higher at 0830 hitting 80.60, but by end of day closed up +0.29 at 80.27.  Still, it was a good-sized move, and we can see it put at least some amount of pressure on PM prices even though PM managed to recover much of its losses.

Mining shares were mixed, with GDX up just +0.08% while GDXJ was up +3.25% on some heavy volume.  Once again, the last part of the trading day proved pivotal, with GDXJ scoring a big (2.2%) chunk of its move up in the last 15 minutes.  I'm not sure why the last few minutes of the day are turning into a wild west show for the juniors, but there it is.

The broad market approved of the employment situation report at 0830, and responded by starting a rally that ended with SPX scoring a new high, +11 to 1985.  The VIX sank to 10.82.

Bonds continued downhill, dropping -0.36% on the day overall.  Bond futures were hammered at 0830 along with gold, but recovered most of their losses by end of day.

Brent crude appeared to find support after its two week move downhill - closing down just -0.24 to 111.00 and printing a doji candle.

Copper continued its rebound, up another 2 cents to 3.27.  Which brings me to the Chart of the Day - copper, plotted against a Google Trends report for "china default".


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