PM Daily Market Commentary - 7/8/2014

davefairtex
By davefairtex on Wed, Jul 9, 2014 - 2:29am

Gold closed down -0.40 to 1320.60 on moderate volume, while silver was off -0.03 to 21.08 on moderate volume also.  Gold sold off in Asia and London, spiking down hard at 0830 EDT to hit 1309, but then rallied back through end of day in NY.  COMEX buyers continue showing up in NY, and from what I can tell, that's what is keeping gold from correcting.  Silver followed a very similar pattern.

The USD dropped -0.04 to 80.22; is this it for the dollar rebound? 

GDX was up +1.61% on moderately heavy volume, while GDXJ was up +1.67% on heavy volume.  Both mining ETFs have moved to the top of their consolidation areas again and both recovered from an initial sell-off in the first part of the trading session.  Mining shares continue looking strong, with GDX:$GOLD ratio quite near its highs.

SPX sold off again today, off -14 to 1964.  SPX still remains above its 20 EMA which is still quite bullish, but the VIX has moved up to 11.98.

The SPX selloff encouraged bonds higher, with TLT rallying +1.12%.  TLT's lower high hasn't been invalidated yet, but if SPX continues downhill, my guess is TLT will make new highs.  Right now bonds really seem to like it when there is any weakness in the equity market at all.

Brent crude sold off again, down -1.30 to 108.94.  We are now below the price when the Kurds captured the Kirkuk oil hub.  My assessment: when the IS fighters looked to be taking everything in their path, oil rallied; as soon as it became clear IS was not going to be able to effect "regime change" in Iraq and that regardless of the incompetence of the Iraqi army, and that there was an array of forces that were available to save the Maliki government if needed (up to 10 divisions of Iranian troops massed on the border, according to the US government), oil prices retreated back to their starting point.

Wikipedia page on the series of events: http://en.wikipedia.org/wiki/2014_Northern_Iraq_offensive

Below is a Brent crude oil price chart annotated with various events in Iraq.

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