PM Daily Market Commentary - 2/25/2015

By davefairtex on Thu, Feb 26, 2015 - 3:11am

Gold rose +2.90 to 1203.70 on moderate volume, while silver rose +0.23 to 16.51 on moderately heavy volume.  PM rallied early in the Asia trading session, and more or less sold off for the remainder of the day.  Silver managed to cling to about half its gains, while gold lost almost all of its move higher, printing a shooting star on the day.

Silver's move higher ended up printing a swing low for silver, albeit by a slim margin.  Gold was not able to do so.

Mining shares did relatively well today, with GDX up +1.81% on moderate volume, and GDXJ climbed +1.36% on moderate volume as well.  In spite of GDXJ's very modest move, it managed to print a swing low.  Both miner ETFs are quite close to breaking above their 9 EMAs - in fact, GDX closed right at its 9 EMA today.  The matrix still looks bearish, but it would not take much for the picture to change.

Name Chart Change 52w ch EMA9 MA50 MA200 50/200 Last Crossing last
Senior Miners GDX 1.81% -20.53% falling rising falling rising ema9 on 2015-02-06 2015-02-25
Silver Miners SIL 1.59% -33.24% falling rising falling rising ma50 on 2015-02-19 2015-02-25
Silver COMEX.Silver 1.49% -25.19% falling falling falling rising ema9 on 2015-02-17 2015-02-25
Junior Miners GDXJ 1.36% -38.02% falling rising falling rising ma50 on 2015-02-20 2015-02-25
Gold COMEX.Gold 0.34% -10.57% falling falling falling falling ma50 on 2015-02-11 2015-02-25
Platinum COMEX.Platinum -0.56% -19.04% falling falling falling falling ema9 on 2015-02-06 2015-02-23

The USD fell -0.29 to 94.22, breaking below its 9 EMA.  I see the selling in the buck as a continuation off yesterday's failed move higher - possibly a response to Janet Yellen's testimony before Congress.  The Fed is being very, very patient in keeping rates low.  Everyone is having such fun at the party, better not remove the punch bowl just yet.  Or really, ever.  Who doesn't like punch?

US equities (SPX) dropped -1.62, closing at 2113.86, making a new intraday all time high in the afternoon but then it sold off into the close.  That's a failed rally; SPX printed a doji on the day.  Coming after a long move higher, a doji sometimes signals a reversal.  A confirmation is required tomorrow - a close below 2109 would accomplish that.  VIX rose +0.15 to 13.84.  If equities drop, that should help PM.

Long bond ETF TLT continued moving higher, climbing +0.43% and closing above its 50 MA.  Strength in bonds may be hinting at a top in equities, and if the equity market does correct, bonds should continue to gain strength.

The CRB (commodity index) rose +0.76%, a nice move but not quite enough to move it back above its 9 EMA.  Commodities remain bearish overall.

WTIC had a good day, rallying +1.87 [+3.80%] to 51.03, pushing oil back above its 9 EMA and its 50 MA all in one day.  The rally in oil came after a bearish Petroleum Status report at 1030, which detailed an 8 million barrel build in oil inventories at Cushing, OK.  Oil did spike down sharply at the moment the report was released, only to reverse immediately, and start rallying.  When the market does that - when it rallies on bad news - that's typically a bullish sign.  The "high frequency traders" who scanned the news article and sold immediately on the release were wrong-footed by the move, ended up losing a bundle and had to cover.  These guys really aren't all powerful.  Sometimes they get it wrong.

As a result, the energy component of the commodity matrix is looking improved after today.  The rest of the matrix still looks solidly bearish.

Name Chart Change 52w ch EMA9 MA50 MA200 50/200 Last Crossing last
Energy GSCI.EN 3.48% -43.42% rising falling falling rising ema9 on 2015-02-25 2015-02-25
Livestock GSCI.LV 0.90% -7.60% falling falling falling falling ema9 on 2015-02-20 2015-02-25
Precious Metal GSCI.PM 0.47% -12.38% falling falling falling falling ma50 on 2015-02-17 2015-02-25
Industrial Metal GSCI.IM -0.48% -9.27% falling falling falling falling ema9 on 2015-02-25 2015-02-25
Agriculture GSCI.AG -1.08% -20.82% falling falling falling rising ema9 on 2015-02-20 2015-02-25

And on that note - yesterday Eurostat released its inflation data; with the exception of Austria, every single EZ nation is now registering "negative inflation".  That's why I follow commodity prices in the PM report.  Deflation symptoms (falling prices) generally do not encourage western gold buyers to load up on gold.

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