PM Daily Market Commentary - 3/2/2015

By davefairtex on Tue, Mar 3, 2015 - 3:11am

Gold fell -7.70 to 1206.00 on moderately heavy volume, while silver dropped -0.17 to 16.41 on light volume.  PM moved strongly higher in Asia, with gold at one point hitting 1223, only to fall for the rest of the day, closing near the low.  Its yet another failed rally for gold and silver.  Both gold and silver are back below their 9 EMA.

Since the low was marked 5 trading days ago, we've had 3 failed rallies, and the highest volume day was today, when gold dropped $7.  This is not a bullish picture.  COMEX buyers seem uninterested in pushing gold prices higher; today's sell-off will encourage the shorts to see if they can hammer gold lower, and most likely we will probably end up retesting support at 1190 sooner rather than later. 

Mining shares sold off relatively hard today, with GDX dropping -2.44% on moderately heavy volume, while GDXJ dropped -1.58% on moderate volume.  Miners were sold steadily for most of the day, although the senior miners managed to find support once price reached the 50 MA.  On an intraday basis, the price action didn't look great.  The steady selling looked like someone was exiting a relatively large miner position.

GDX is now below its 9 EMA, while GDXJ is now below both 9 EMA and 50 MA.  Again, when the heaviest volume in recent days is a down day, that's a bad sign.  If the 50 MA can hold for the senior miners, that would be helpful.  I don't give that high odds, unless buyers show up soon in gold.

The USD climbed +0.15 to 95.56, rising steadily towards a test of the previous high at 96.  The Euro is steadily dropping, and is down to 111.85.

US equities (SPX) sold off prior to market open, but found support on its 9 EMA; it started rallying at 930, and it climbed for most of the day, ending up +12.89 closing at 2117.39, a new all time closing high.  Our two day "correction" just got bought.  VIX dropped to 13.04, the lowest price on the VIX since early December 2014.

When money flows into SPX, it tends to flow out of PM.

Long bond ETF TLT was not happy today; TLT dropped a big -1.86% slamming through its 9 EMA and looks to be headed for a retest of its recent lows.  For whatever reason, money is leaving US bonds.  Partially that's probably about equities, but it might be something else too.  It was a big loss today for bonds.

The CRB (commodity index) sold off too, dropping -0.94% dropping back below its 9 EMA, looking bearish.

WTIC was up +0.27 to 49.79, but this modest rise covers what was actually a failed rally - at 1000 EST, oil started moving higher, and by 1100 it had hit 51.04, but it sold off for the remainder of the day.  Why the launch at 10?  I don't know.  The two reports released at 10 weren't particularly oil-bullish: construction spending was weak, and so was the ISM manufacturing index report.

In fact, one would think these bearish-looking reports would have put a damper on equities, but one would be wrong.  That's one strong clue to stay away from shorting the US equity market right now: whatever the bid is under the equity market, it seems to have little to do with US economic news.  When markets ignore bad news, they are most likely going up.

And when SPX does well, that means money generally flows out of PM.  At least that's how it seems to be these days.

Last thing.  If you made it this far, you get a treat.  The US Fed reports their "earmarked gold" holdings at the end of each month.  During January, the Fed earmarked gold dropped by 20 tons.  Where did it go?  Germany?  Or some other destination, as of yet undeclared?  Repatriation continues!

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Jbarney's picture
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Joined: Nov 25 2010
Posts: 233
Risks to "Small Fish" Ownership

This thought has crossed my mind a couple of times. (Not stealing...but being stolen from)  I have listened to enough of Chris's podcasts to know there are multiple ways that we can protect our precious metals outside of the home, but it is scary to think what this article represents on a couple of different levels.

First, I think there is a possibility, based on the timing and the way the theft happened, that somebody in the organization transporting the gold helped plan the theft.  That is not to say the drivers were the ones responsible, but the circumstances certainly are questionable to say the least.  White van following the truck?  Mechanical problems in that particular area?  They had to know what was in the vehicle....

I also wonder what this means for those of us who are trying to protect wealth during this time period.  While it is in my possession and I know where it is, that is one thing.  What risks does someone risk owning PM when the collapse happens?  Are there going to be thugs just waiting at coin dealer shops, just waiting for those of us who are accumulating PMs?

I think I know the answers to these questions, but it is scary to think about.


Jbarney's picture
Status: Silver Member (Offline)
Joined: Nov 25 2010
Posts: 233

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