PM Daily Market Commentary - 3/9/2015

davefairtex
By davefairtex on Tue, Mar 10, 2015 - 8:19am

Gold fell -1.90 to 1166.30 on moderate volume, while silver dropped -0.20 to 15.73 on light volume.  Gold more or less tracked sideways all day long, while silver tried rallying, failed, and sold off into the close.  Given Friday's sell-off, the non-existent gold rally is not a good sign.  We most likely go lower still, unless those buyers show up soon.

Miners continued their dreadful performance, with GDX dropping -3.61% on very heavy volume, while GDXJ plummeted -5.33% also on very heavy volume.  Still no sign of a low in the miners - there are no hints of buying interest, just solid distribution from the open to the close.  Perhaps after another 5% drop GDX will find support at around GDX 17, a prior low from Dec 2014.  It doesn't seem like longs are interested in jumping in right now.  However once the selling is over, we should get a nice bounce.

The USD traded sideways within a narrow range.  In early trading in Asia, the buck has continued higher, with the expected negative effect on gold.  If that dollar keeps rising, I thoroughly expect gold to eventually break below the 1130 lows, based on how the current gold-dollar relationship in place.

US equities (SPX) rebounded modestly from the losses on Friday, rising +8.17 to close at 2079.43.  The rebound seemed a bit tepid.  VIX dropped -0.14 to 15.03.

Long bond ETF TLT rose +0.92% almost forming a swing low for bonds, but not quite getting there.  Still it was a good rally in bonds, and perhaps they are in the process of putting in a low.

The CRB (commodity index) fell again today, dropping -0.38%.  Commodities remain bearish, and are slowly dropping.  At this rate, they will end up retesting their lows within a week or two.  This makes sense from a macro point of view - China looks like it is heading into deflation, and Europe has been there for a while.

WTIC rallied +0.25 to 50.03, but it was a mostly-failed rally.  Oil looks to be slowly chopping lower.  Perhaps storage issues are pulling prices down.  There is (supposedly) a strong lobbying campaign going on right now to allow the US to export oil.  That might be good for a $5 pop in the price of WTIC - perhaps more.  Here's a trade: "short Brent long WTIC", and then lobby Congress like crazy to get it to pay off.  I'd be surprised if the big banks weren't all over that.  "To save domestic shale producers."  Anything for a quick pop to the quarterly bonus.  And Congress gets to retire to highly paid "consultant positions" at the big banks.

I'm taking my current cues on PM from the mining shares.  Currently they look awful, so I'm still "sitting on my hands" - to use my friend's expression.  With the dollar moving ever upwards, there's no sense in throwing yourself in front of an oncoming steamroller just because there might be a nickel or two you could pick up if you get lucky.

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1 Comment

Jbarney's picture
Jbarney
Status: Silver Member (Offline)
Joined: Nov 26 2010
Posts: 233
Ups and Downs

Wow...as I write this the market is down over 300 points.  Gold and Silver pretty much unchanged.  Chris was talking about the markets becoming crazier.    These swings could get pretty interesting.

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