PM Daily Market Commentary - 7/7/2014

By davefairtex on Tue, Jul 8, 2014 - 4:32am

Gold closed up +0.60 to 1321.00 on light volume, while silver was off -0.06 to 21.11 also on light volume.  Gold sold off in Asia & London, bottoming at 1000 EDT on a spike down to 1312, only to rebound for the remainder of the day in NY, eventually closing at the highs.  This round-trip no-op (printing a dragonfly doji candle) was yet another instance of buyers of COMEX gold buying the dip.

We've seen it for years in equities, and now we're seeing it in PM - and at the COMEX, of all places.

The USD closed flat on the day.

Mining shares were down, with GDX off -1.74% on light volume while GDXJ was off -2.05% on heavy volume.  Both miners had off days, but remain well within their consolidation ranges.

There was no activity today that provides us any new clues as to PM market direction. 

SPX had one of its infrequent down days, closing off -8 to 1978.  VIX jumped up a bit to 11.33, which is still quite low.

Bonds rallied relatively strongly, with TLT +0.73%, but the rally was stopped short of the 50 MA - given TLT has formed a lower high, and that the 50 MA is a logical entry point for traders betting on a continued decline in bonds, its no surprise TLT's rally stopped there.

Brent crude dropped yet again, ignoring support and moving through its 50 day MA.  It is about one more day away from losing the entire ISIS/Iraq premium it acquired 3 weeks ago.  Is this an example of a non-functioning clueless market, or an example of people who Know Something We Don't about the overall supply situation in the short term?  I honestly don't know.

Interestingly, WTIC crude for delivery in Dec 2022 is $88.74 vs crude for delivery in Aug 2014 which is trading at $103.44.

Commodities took a tumble, dropping -0.93% to an overall price level last seen in March.  This does not seem to be affecting gold & silver, however.

And here's your chart of the day: Total Bank Credit.  This time, absolute values rather than rates of growth.  Notice the flat patch representing a 0% growth rate in bank credit during in first two thirds of 2013.  We had a "gold market event" of some sort during that time period, didn't we?


1 Comment

sand_puppy's picture
Status: Diamond Member (Online)
Joined: Apr 13 2011
Posts: 2033
Stock cannot fall 2 days in a row

This is not permitted, is it?

How are they going to bail this one out??

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