PM Daily Market Commentary - 11/26/2014

davefairtex
By davefairtex on Wed, Nov 26, 2014 - 9:43pm

Gold dropped -2.50 to 1198.10 on moderate volume; silver dropped -0.18 to 16.47 on light volume.  Gold didn't do much today, while silver just sold off slowly.   Both gold and silver remain below their MA 50 and above their EMA-9.

The gold/silver ratio moved up +0.66 to 72.77.

The USD sold off for the third day in a row, dropping -0.28 to 87.68, closing below its EMA-9 for the first time in a month.  The major currencies look ready to rally against the buck after long downtrends - perhaps even the Yen has found a low for now.  The buck needs a close below 87.50 before it can mark a top; 87.50 has been a strong support area for four weeks now, and a close below that level would likely signal a top in the buck.

Miners retraced a bit today, with GDX off -1.42% on moderately light volume, and GDXJ dropped -2.35% on light volume.  Recently, the pattern seems to be rallies on high volume, and retracements on lighter volume, which is a generally bullish pattern.

SPX rose +5.80 to to 2072.83, making another all time closing high.  VIX dropped -0.18 to 12.07.  Who wants to buy puts before a long vacation weekend?  Not me.

TLT continued rising, +0.27% having risen for five days in a row.  Bonds are looking moderately strong, the equity market continues rising, while the dollar drops.  Its a curious pattern.

The commodity index dropped -0.04%, more or less unchanged on the day.  Hope for a continued move higher in commodities remains alive, but it appears to be a slow process.  WTIC made a new closing low, dropping -0.41 to 73.47.  Brent dropped -0.58 to 77.75.  Oil continues steadily lower.

Not much happened on the day before the Thanksgiving holiday; oil continued dropping, the USD is hinting it might be showing a top, and that's about it.  Friday we have a half day of trading, and then its off to Switzerland on Sunday, where we get to see actual democracy in action with the Gold Referendum.  Imagine that, a country where people have the ability to vote and enact real change.

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13 Comments

thatchmo's picture
thatchmo
Status: Gold Member (Offline)
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Posts: 432
Indeed.  Imagine that.  Does

Indeed.  Imagine that.  Does Switzerland have PACs and Corporate Citizens?  I'll be interested to see their voter turnout numbers.  Think a positive vote will make the MSN?  Aloha, Steve.

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
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Posts: 5568
Swiss Gold Referendum...pulling out all the stops

I received this via email and thought is useful framing for the SWI gold referendum.

Apparently the powers that be are pulling out all the stops in their efforts to thwart a "yes" vote on the referendum.

Dear friends, I received this article from Eric Schreiber (former Credit Suisse and Union Bancaire Privée).

We are facing an enormous anti-gold propaganda campaign by all members of the Swiss establishment – I haven’t seen anything like this before. It is a fact that the pro-side is widely oppressed in Switzerland when it comes to the mass media and TV-stations.

The Swiss National Bank is all over the place, which has never happened before. They are really nervous and are now pushing their agenda with political statements, also sth [SIC  ?] which they have never done before in the past.

However, this just shows that we might see a close call on Sunday. Today we even had members of private banks writing against the gold-initiative…very, very uncommon. Whatever happens end of November, we achieved a widespread debate and opened the minds of a lot of people for gold and individual liberty – therefore we will push the debate and keep it alive.

People will realize how insane the actual central bank policy (system) is and that it only leads to the impoverishment of the hard working and honest people. Let’s combine our efforts to make the people think by motivating them to do their own research on how this fraudulent system works.

The Swiss Referendum On Gold: What’s Missing From The Debate http://goldsilverworlds.com/physical-market/the-swiss-referendum-on-gold...

Please feel free to share.

Claudio

Claudio Grass

Again, it bears mentioning that the real reason any central bank truly hates the intent behind the gold referendum is because it limits their ability to slowly impoverish their people via exchange rate fiddling.  That is, financial repression works if and only if you can both engineer negative real interest rates and prevent people from escaping your predations via a golden escape hatch.

The gold referendum would effectively build just such a hatch right into the central bank balance sheet - not entirely, just at the 20% level - but that's enough to drive a statist central banker bonkers.

joesxm2011's picture
joesxm2011
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Posts: 259
Is there a Black Friday Sale on Silver ??

I was just checking and it seems that there is a Black Friday Sale going on with Silver.  I thought it was only on retail products?

HughK's picture
HughK
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Posts: 760
silver sale
joesxm2011 wrote:

I was just checking and it seems that there is a Black Friday Sale going on with Silver.  I thought it was only on retail products?

Ha ha...the  lines at the US Mint are around the block! 

cmartenson's picture
cmartenson
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Posts: 5568
More ridiculous ""market"" behavior
HughK wrote:
joesxm2011 wrote:

I was just checking and it seems that there is a Black Friday Sale going on with Silver.  I thought it was only on retail products?

Ha ha...the  lines at the US Mint are around the block! 

Yes, I am among those that think the entire COPEX ""market"" for precious metals is just one big cesspool of shenanigans.

Today, on a market day where there is among the lowest of possible volumes for the year we find that "someone" has decided that to be the perfect time to carpet bomb the few bids that exist with sell orders.

This is not useful price discovery, but more overt price manipulation.  Of the few, by the few, for the few.

And this same behavior happens in lots of other markets, or should I type ""markets"", because they are thoroughly broken.  

And the center of the rot in the US and it's completely unregulated "markets" where nobody big ever gets called out let alone punished.

It's no accident that what few bank wrist slaps have happened this year all happened due to European regulators with the sole exception of the US slapping PNB over alleged violations of the Iran sanctions.

Yes, lots of shenanigans happening in the US, but, no, they will not ever be investigated.

sand_puppy's picture
sand_puppy
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Posts: 1755
Ahhhh. Okey Dokey.

Nothing to see here.

 

Time2help's picture
Time2help
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Posts: 2766
Seriously.
sand_puppy wrote:

Nothing to see here.

Move along.

davefairtex's picture
davefairtex
Status: Diamond Member (Online)
Joined: Sep 3 2008
Posts: 5061
while gold was hurt, oil was absolutely trashed

So from what I see, since the close on Wednesday, gold is off $32 [-2.6%] while oil is down $7.60 [-11.5%].  The overall commodity index is down -2.64%.

Oil's move lower off the OPEC meeting was absolutely astonishing to me.  The drop is massive.

My sense on this event is that after oil broke support on Thursday, the path of least resistance for the entire commodity index was lower.  So the shorts jumped on the bandwagon and down everything went.

Was gold singled out for beatings?  Given every other commodity got a beating that same day, it doesn't seem likely to me.

 

dryam2000's picture
dryam2000
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Posts: 279
davefairtex wrote:So from
davefairtex wrote:

So from what I see, since the close on Wednesday, gold is off $32 [-2.6%] while oil is down $7.60 [-11.5%].  The overall commodity index is down -2.64%.

Oil's move lower off the OPEC meeting was absolutely astonishing to me.  The drop is massive.

My sense on this event is that after oil broke support on Thursday, the path of least resistance for the entire commodity index was lower.  So the shorts jumped on the bandwagon and down everything went.

Was gold singled out for beatings?  Given every other commodity got a beating that same day, it doesn't seem likely to me.

 

I guess that makes sense if one views gold as any other commodity.  

My fiancé sees gold as a (nice) commodity, but like several billion people throughout Asia, India,  those throughout the Muslim community, and some folks in Russian I see gold as money.

 

davefairtex's picture
davefairtex
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Posts: 5061
gold: money or commodity

dryam-

My fiancé sees gold as a (nice) commodity, but like several billion people throughout Asia, India,  those throughout the Muslim community, and some folks in Russian I see gold as money.

Honestly, it doesn't really matter what you see.  If a big chunk of the money out there thinks gold is a commodity, guess what?  It behaves like a commodity.

I've seen gold price movements correlated with commodities - not on a lock-step basis, but definitely as a trend over both short and long term trends.  There are cases where it doesn't, but mostly - it does, ever since we left the gold standard in the 1970s.  Its just what is.  You can rail about how its not right, how it shouldn't be, how gold is money and you can quote all the writings you like - but it won't change the facts on the ground.

I'm not sure what else I can say.  Its tough arguing with someone who isn't evidence-driven.

DisappearingCulture's picture
DisappearingCulture
Status: Bronze Member (Offline)
Joined: Jun 21 2014
Posts: 38
Drop in oil prices

Here is some additional perspective on oil prices.

Shale oil is very expensive to produce. Without high prices the industry collapses. This is an economic war.

Here are a couple articles for consideration:

http://www.businessinsider.com/shale-boom-like-dot-com-boom-says-russian-tycoon-2014-11

 

And:

 

http://www.businessinsider.com/r-inside-opec-room-naimi-declares-price-war-on-us-shale-oil-2014-11

dryam2000's picture
dryam2000
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Posts: 279
davefairtex

davefairtex,

There's no need to argue with me.  Is open discussion bad?  I simply pointed out a big difference in how you see gold versus how many people who visit PP see gold as to whether it is a commodity or money.  This is a huge topic & only time will tell on which view is correct.  I agree with you, my individual view is absolutely irrelevant, but I would suggest that the view of several billion people in the eastern world is very relevant.

I"m very much a realist.  The world is what it is, not "what it should be".  

Are you suggesting that the world has somehow stabilized as far as "the markets" go?  I personally believe that that the incomprehensible worldwide financial mess & geopolitical tensions have a long way to go before these problems get sorted through and there is anything remotely close to a steady state.  I'm wary of anyone who thinks they have anything close to a clear understanding of "the markets", or thinks they have a grasp of all the rapidly moving pieces on the worldwide chessboard.   

Stay humble my friend.

davefairtex's picture
davefairtex
Status: Diamond Member (Online)
Joined: Sep 3 2008
Posts: 5061
the world is what it is

dryam-

There's no need to argue with me.  Is open discussion bad?  I simply pointed out a big difference in how you see gold versus how many people who visit PP see gold as to whether it is a commodity or money.

If we recall back, the thread started by me trying to give a reason why gold tanked Friday.  I think I got confused when you when you injected the "gold is money" statement - it appeared to me as though you were suggesting because you feel "gold is money", as a result, the price of gold isn't correlated with other commodity prices, and thus my explanation for why gold dropped Friday was wrong.

But now I understand you were not saying such a thing - your comment was simply a non-sequitur.

To clarify, my opinion on gold diverges from how the marketplace views gold.  I don't see gold as a commodity, I see it as a "foreign currency."  But a big chunk of the marketplace does see gold as a commodity, which is why it often trades that way - aligned with the movements of the other commodities.

See, my opinion doesn't matter.  It won't drive the marketplace, so I don't drag my opinion into the discussion.  The correlations are what matters, and so I'm just reporting what they happen to be right now.

If you want to have a discussion on what other items correlate with gold's price movements, I'm happy to talk about that, too.

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