PM Daily Market Commentary - 11/3/2014

davefairtex
By davefairtex on Tue, Nov 4, 2014 - 3:13am

Gold dropped -8.10 to 1165.40 on moderate volume, and silver was off -0.05 to 16.12 on moderate volume also.   PM traded in a range today, with gold closing at the lower end of the range, while silver ended up closer to the middle, printing a doji on the day.  Are the buyers showing up with gold on sale?  Not yet, they aren't.

The dollar had another big move higher today, up +0.44 to 87.41, continuing its breakout from last Friday.  Next real resistance is the 89-90 resistance zone dating back to the March 2009/June 2010 previous highs.  The dropping Yen is helping the buck to rise - Yen was off -1.41% just today, another big move.

Mining shares rallied today, with GDX up +4.07% on heavy volume, and GDXJ was up +5.88% on very heavy volume.  Both mining ETFs confirmed rebounds of their doji prints from Friday, which is a buy signal for the miners.   In addition, the GDX:$GOLD ratio also staged a nice rally today as well.  That makes two bullish signs in PM today - the first in quite a while.

However, I'd feel a lot more confident about this signal if gold and silver had rallied today - given that they didn't, and oil dropped, and commodities retreated, I'm a little bit concerned that this signal might be less reliable than usual.

SPX tried to make a new high today and failed, dropping -0.24 to 2017.81 and printing a doji on the day.  VIX rose +0.70 to 14.73.  SPX is now mildly overbought - if it took a rest here or even retreated, I wouldn't be too surprised.

Commodities dropped -0.20%.   WTIC was hit hard, dropping -2.51 and breaking below support, making a new low to 78.19.  Brent was down only -1.08 to 84.78 and looked relatively better.  It will be tough for gold and silver to rally with oil continuing to make new lows.

Mining shares actually had a good day today.  Can they continue to rise with everything else dropping?  They might be leading PM higher, but I'll be more of a believer if we can string together two days of upward movement in the mining shares.

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