PM Daily Market Commentary - 9/18/2014

davefairtex
By davefairtex on Fri, Sep 19, 2014 - 1:04am

Gold closed up +1.80 to 1225.90 on heavy volume; silver was down -0.02 on moderately heavy volume.  Gold spiked lower twice today, once at the beginning of trading in Japan, and once more in the afternoon in London.  Both spikes down were bought, which is a positive development, suggesting there just might be support for gold at around the 1216 level.

The buck sold off hard today, closing down -0.36 to 84.39, retracing a good chunk of yesterday's gains off the FOMC meeting.  Pound was up +0.78%, Euro up +0.42%, Canada and Australian dollar both up +0.58% and +0.41% respectively.  While the drop wasn't enough to mark a top, it likely helped gold and silver to avoid dropping further.  The dollar needs to close below 84 to start the process of marking a top in the buck.

Miners bifurcated today, with GDX selling off closing down -1.28% on heavy volume; GDXJ was up +0.21% on moderately heavy volume.  The GDX chart is looking weak, with down day volume continuing to be higher than up-day volume, and no support is visible on the chart at all.  Once support was broken back in early September, GDX has steadily sold off.  GDXJ looks a lot better having found support around its 200 day MA.

SPX moved higher today, closing up +10 to 2011.36, setting a new all time closing high.  VIX dropped to 12.03.  Risk tolerance appears to be coming back into the market - not that we ever really went "risk off" in US equities.

Long term treasuries (TLT) were up +0.32%, perhaps starting to form a low after dropping 6% from its high set at the end of August.

After rallying for a couple of days, commodities dropped hard today, off -0.91%.  WTIC was down -0.96 to 93.02, Brent was down -1.27 to 97.70.  Commodities can't seem to catch a break these days.

Currencies are starting to line up a bit more positively for PM, but gold needs a close above 1230 to get anything started, preferably with the metal closing near the highs of the day.  This would be a sign to me that COMEX buyers have found current prices to be discounted enough for them to hold the futures overnight.  To date, gold rallies have been brief and have rapidly faded.  Until this changes, I believe momentum will continue to be down.

At some point prices will get low enough for buyers at COMEX to really show up - its just a matter of when.

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9 Comments

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5683
silver having a bad day

Silver is off 71 cents having broken below 18.17 (the April 2013 PM crash lows), and is now trading at 17.80.

Usually when support breaks, disciplined traders throw the offending item right off the lifeboat, so immediately after the break there is usually a whole flood of selling that happens.

And that's pretty much what is happening.  Silver is dreadfully oversold right now, but - when support breaks, sometimes those momentum indicators just don't matter.

We can probably expect a similar behavior from gold, if it drops below 1180 support.

The dollar breaking out to a new high definitely didn't help.

Let's hope those COMEX buyers appear soon.  I'm getting tired of writing about bad news!!

 

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2885
Silver is having a great day

Buy some, it's on sale.

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5683
from your lips to the COMEX trader's ears

Let's hope everyone at the COMEX thinks the same way you do!  And when they start buying, I will too!

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2252
Daaaamn....

....I hate ifs and buts, but...  If I had some spare caish, I'd be running to the local coin dealer...

 

 

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
A Laugh a Minute.

UK not breaking up- huge sigh of relief, the worlds currencies are safe- silver takes a dive. It is all beer and skittles until it isn't.

Buy for the Long haul. (+10 years) when the strain of supporting the baby boomer retirees knocks this thing on its derriere.

However, it depends on just how bad things do get. Holding PMs assumes a future market.

If Mad Max makes an appearance I don't think silver or gold will be useful until everything settles down again and that might take several generations, if ever. The Limits to Growth collapse. Do we take it seriously?

It is all a laugh a minute.

tricky rick's picture
tricky rick
Status: Bronze Member (Offline)
Joined: Dec 9 2011
Posts: 92
side splittin it is!

If the world according to JHK(untsler) and JMG(reer) is our future, metals or potatoes!  which? 

(hint - taters won't break your teeth)

 enough cash til the end of the ride?  shouldn't be too long...  things are popping out all over the place, 

like that toy with the buldging eyes

jonarmst's picture
jonarmst
Status: Member (Offline)
Joined: Feb 13 2011
Posts: 16
Look out below

Yikes, silver is < $18 and gold is < $1225.   Anyone bold enough to want to call a bottom here? (You don't have to justify it.)  I am personally looking for a complete and total psychological washout that will have even the most bunker-dwelling SilverDoctors.com reader questioning their sanity for ever touching the precious metals: $14 Ag, $950 Au.  There's also (IMHHHO) a slight chance that this will just bounce off the $1180 level again but with the absolute carnage in the space over the last few weeks I think it's safe to say that we're now in a wacky homeostatic feedback loop gone awry and we've got nowhere to go but down.

(I still think it's probably a great time to get into mining stocks if you haven't already.  I was going to buy a tranche of juniors this week, but with these solid growth oriented producers trading at fire-sale prices I just couldn't resist picking up a little bit more of AG, AUY, PVG [the one junior I really like -- will be profitable even at $800 gold when it goes to production], SLW, and SPPP.

I'm seeing no shortage of articles about how "gold is completely finished for all time and the rest of eternity since we have Bitcoin now" sorts of articles so I really think we're getting close to the bottom now.

As (almost) always, these price prognostications are just the electronic equivalent of some meaningless meanderings of the drunk guy at the bar sitting next to you, and would be curious to hear anyone else's opinion --- unsubstantiated only though, please, as we're pretty much all in the choir here.

Cheers,

Jonathan

thc0655's picture
thc0655
Status: Diamond Member (Offline)
Joined: Apr 27 2010
Posts: 1708
Positioning

I'm getting into position to buy silver next week, or whenever it appears to set a new bottom.  The lower the better.  And if gold breaches $1180 going down, I'll look for a bottom there and load up. No fear.

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Road trip.

There's a little debate going on at ZH at the moment about the future of silver with the usual talk of manipulation. I wondered what exactly is being manipulated and did a little research of my own.

2013 Supply (Total) =978.1

2013 Demand = 1,081.1

Deficit 10% (The market is undersupplied by 10%).

Source.

The Daily Reckoning concurs although their piece is from 2011.

However I am unsure of their motives so I shall try once more. How about this from Perth Mint? Silver sales at a seven month high. But what does that mean? Does it mean that the meme is being successfully manipulated by people who want to sell the stuff?

I put my certainty at 60/40 in favour of buying. Looks as though I have a road trip coming up. I will go through the SW in order to make it more interesting.

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