PM Daily Market Commentary - 11/18/2014

By davefairtex on Tue, Nov 18, 2014 - 9:29pm

Gold rose +10.20 to 1196.80 on moderately heavy volume, while silver rose +0.05 to 16.17 on moderate volume.   Silver is back to underperforming gold once again, which pushed the gold/silver ratio up +0.43 to 74.01.

The USD sold off today, losing -0.39 to 87.63; the fall in the dollar today seemed to help gold rally.  In recent weeks, the buck has been up one day, and down the next, resulting in a move sideways as it tries to figure out its next move.  Currently, the Euro looks to be forming a low - it was up +0.65% today, closing above its EMA-9 and possibly forming a bullish ascending triangle.  On the weekly chart, the Euro appears to be setting up for a rebound. If the Euro does rebound, the buck should drop for a time, which should help propel most of the commodity index higher, including gold and silver.

Mining shares had a great day again today, GDX closing up +4.69% on moderately heavy volume, and GDXJ closing up +6.75% on heavy volume.  Both mining ETFs gapped up at the open and moved steadily higher during the day, closing near the highs.  GDX moved through its first resistance line at the $20.00 level (which was its most recent breakdown point), and is closing on its 50 MA.  Everything looks good in the mining shares.  At some point the energy for this first leg up will start to fade, but so far the miners are not overbought just yet, so there should be more room for them to extend higher.

The GDX:$GOLD ratio has moved strongly higher in the past few days and is closing on its 50 MA, and GDXJ:GDX ratio is improving and starting to look bullish.  The ratios are looking more bullish as time passes.

SPX popped higher today breaking out of its sideways trading range, closing up +10.48 to 2051.80 - another new all time closing high.  The VIX dropped -0.13 to 13.86.   Volume continues to drop, which isn't usually a good sign on a rally, but so far it hasn't been any trouble for SPX.

TLT rallied +0.33%; bonds look to be slowly moving high this week hinting at a possible break to the upside,  but so far they remain within their month-long trading range.  JNK continued dropping, off -0.20%.  This is 5 straight down days for JNK.  So far SPX remains unaffected.

The commodity index dropped -0.12% closing right at its EMA-9.  Oil cannot rally to save its life; WTIC attemped to move up to its EMA-9 in London trading, but the rally failed, after which WTIC sold off hard, dropping -1.26 to 74.21.  Brent dropped -0.84 to 78.47.  Dropping oil is probably no help at all for silver.

Miners are leading gold higher, the ratios are climbing in good order - the only fly in the ointment is silver, which is trailing gold.  If that gold/silver ratio can just start dropping (which may well come along with a commodity index rally), then the puzzle pieces will all be in place for a more extended PM rally.  Until that happens, I remain a bit concerned at just how long this PM rally will last.

Tomorrow we have the FOMC minutes release at 1400 EST.  This is often a market-moving event.  I'm not sure what sort of surprise we could see there, but you just never know what those pesky central planners might say.

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1 Comment

KennethPollinger's picture
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 670
The NEW Colder War

For all you folks concerned about metals, especially gold and silver, well, I'd suggest that more attention needs to be paid to uranium, oil, and natural gas, and not just theoretically (debate-wise) but concretely, a la The Colder War, aka., the New Great Game.  Marin Katusa's book is really a MUST.  It will provide the CONTEXT within which the future geopolitical/economic structures will be fashioned.  And it APPEARS that the good ole USA is falling back VERY QUICKLY in this new global race.  Putin is TRULY someone to be reckoned with.  Chp 12, Post-Petrodollar America is the final synthesis, right after Chp. 11, Twilight of the Petrodollar. By the way, it reads almost as a mystery novel (John Mauldin read it in one sitting; it took me two).  Putin is TRULY something else!!!

MUCH of this, IF TRUE, and if the USA does not wake up, is really scary stuff!! Marin has even created "The Colder War Portfolio," consisting of XOM, GLCNF, OGZPY, OXY, and TRP, with HAL on watch list.

It seems that we should be prepared, when much collapses, to jump in and buy, stocks of oil, gas, uranium and other resources--in addition to our continual purchases of gold and silver, maybe along with platinum and palladium (as Farber recommends), and, of course, land with precious water.

I expect this book to be #1 shortly.  Zen.

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