PM Daily Market Commentary - 12/24/2014

By davefairtex on Thu, Dec 25, 2014 - 1:29am

Gold dropped -2.00 to 1175.20 on very light volume; silver fell -0.02 to 15.77 on very light volume as well.  PM traded in a narrow trading range all day; I suspect not many traders were in the office on this holiday-shortened day.  Most likely, that will be true of Friday as well.

The buck fell -0.14 to 90.22, retreating modestly after five straight up days.  A good Fed meeting really gets the dollar moving higher these days.  So does good US economic news.  My current sense is, the dollar will only start to retreat once good economic news doesn't result in a dollar breakout.  In the meantime, gold and silver will have a harder time moving higher in this rising dollar environment.

Mining shares did well today; on a do-nothing day for gold, GDX rose +2.72% on moderate volume, while GDXJ rose +3.39% also on moderate volume.  Miners are moving back up towards their EMA-9; they have avoided making new cycle lows, which is positive, and if we can survive the tax loss selling season without making a new low, we can probably expect some lift from the new year.

The decent performance in miners on a day when gold went nowhere helped the GDX:$GOLD ratio rise.  Right now, it is still in a bearish downtrend, but it is showing some modest signs of life.  The 50 MA has proven to be a formidable obstacle over the past two months, thus a close of the ratio above its 50 MA would be a bullish leading indicator for PM.

SPX rallied intraday to a new all time high of 2087.56, but sold off at the close ending the day down -0.29 to 2081.88.  Volume was light; had there been more volume, I would say today was a failed rally.   The VIX fell -0.43 dropping to 14.37.  I guess traders aren't so interested in buying puts spanning the upcoming holiday week.

TLT rallied today following yesterday's sell-off; TLT was up +0.54%.  Bonds appear to be in a slow process of selling off: one step forward, and two steps backward.  That said, bonds remain in an uptrend, with TLT's price still well above its rising 50 MA.   JNK rose +0.28% today.

The overall commodity index ($CRB) fell -1.37%, continuing its almost straight-line decline.  Oil fell too, with WTIC dropping -0.99 to 55.85.  Oil continues to chop sideways in a range; my sense is, if it doesn't break higher soon, it will follow the CRB lower and break down.  We could see oil starting the new year in the 40s, which would probably cause another sell-off in junk bonds, shale drillers, and oil services companies.  That dropping $CRB is definitely a bearish influence.

Until we see something change, we currently have a downtrend in commodities, oil, gold, silver, and the miners.  We have an uptrend in US bonds, US equities, and the USD.  As a relatively new development, we have a medium-term downtrend in junk bonds, which may be a leading indicator of things to come.

My advice: don't take it all too seriously.  In six months, all this could go enjoy your holiday!

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davefairtex's picture
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5740
PM "boxing day" rally

Twas the day after Chrismas, and the crack Fed/Banker gold suppression team was still hung over from an overabundance of holiday cheer...  :-)

Gold is up +23.90 [+2.03%] and silver +0.57 [+3.66%] - they've just been rallying since the futures market opened in Japan through right now. 


Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
PM and Brass.

I don't trust the dear chaps, Especially when no-one is around to babysit the corridors of power.

Second thoughts- they have become brazen and do unspeakable acts in broad daylight because there are no consequences.

Enough Rope.

robie robinson's picture
robie robinson
Status: Diamond Member (Offline)
Joined: Aug 25 2009
Posts: 1233
Enough rope?

more rope increases ones velocity 'till the end is reached: whereupon a wrench of an ache is the least that follows.

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