PM Daily Market Commentary - 4/29/2015

davefairtex
By davefairtex on Thu, Apr 30, 2015 - 2:23am

Gold fell -7.40 to 1204.10 on moderately heavy volume; silver dropped -0.04 to 16.54 on moderate volume.  Gold did not particularly like the FOMC meeting results, where the Fed left the door open for a rate rise at the next meeting in June.

Overall, gold was quite weak today; although it didn't look so bad in USD, gold in Euros dropped -1.91% which (in dollar terms) is about a $23 move.  Combined with the drop in the buck, it suggests to me of an unwind of a safe haven trade.

GDX ignored gold's fall and rallied +0.93% on moderately heavy volume, while GDXJ staged a failed rally and dropped -0.54% on moderate volume.  Miners sold off after the FOMC announcement at 14:00 EDT.  Miners tend to be more sensitive to metal trends - when miners rally on a day when gold itself falls, that's a positive sign.

As a result of the positive miner/gold divergence, the GDX:$GOLD ratio rallied sharply.  It continues to look good.

The buck fell hard again today, dropping -0.87 to 95.32.  The selling of the dollar is accelerating; unfortunately, gold did not seem to benefit at all today.  Euro rose +1.46, a big move, and rallied above an important resistance line at 110 to close at 111.22.  I don't believe this signals that Europe is all better, but it does suggest that traders believe the Eurozone won't end in the next few weeks.

SPX (US equities) fell today, dropping -7.91 to 2106.85.  The soft 1Q GDP number (+0.2%) didn't help, and neither did the FOMC meeting announcement, both of which caused the equity market tor drop.  However the move lower was not substantial, and we remain less than 1% from the all time highs.  VIX rose +0.98 to 13.39.

Bond ETF TLT dropped hard again today, down -1.23%.  Bonds continue to look ill.  Money fleeing the dollar mostly appears to be coming from the bond market.

The CRB (commodity index) really appreciated the falling dollar; it rose +1.16% and closed at a new cycle high. 

WTIC (west texas crude) rose as well, jumping +1.55 [+2.72%] to 58.53, a new closing high for this cycle.  Helping crude to rally was the Petroleum Status report at 10:30 EDT, which revealed a smaller build of 1.9 million barrels (vs 5.3 million barrels last week).  The reason I say the report helped is because crude launched into a $1.50 rally immediately after the report came out.

Miners seem strong, gold is weaker, the dollar is being sold hard and commodities are looking relatively good.  Jury is still out on this gold rally, but the miners are hinting we have more room to run.

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3 Comments

Jbarney's picture
Jbarney
Status: Silver Member (Offline)
Joined: Nov 25 2010
Posts: 233
Nice to See the Big Boys Like Precious Metals.....

http://english.pravda.ru/news/business/29-04-2015/130431-morgan-0/

I find it remarkable that JP Morgan had 5 million ounces in 2012....and now, just three years later they have accumulated 55 million ounces of silver.  And they have purchased 8 million ounces in two weeks?  Wow.  With the big money moving back in, we may have reached the bottom.

It is sad that the banksters will profit when the price goes up.  Oh well.

Jason

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

Just did a little research.  Based on a Podcast Chris did with Ted Butler back in Nov. of 2014, the world production of silver is around $800 million ounces.  If memory serves (someone correct me here) about half of the world's output is consumed by industrial demand....the other half is made into coins, bars, etc....

So J.P Morgan now owns 1/8 of the world's yearly output of silver?

Boy, did my mood just sour.

Jason

hammer6166's picture
hammer6166
Status: Bronze Member (Offline)
Joined: Apr 30 2010
Posts: 25
Silver uses

Here is graphic for worldwide silver usage as of 2012:

https://www.bullionvault.com/gold-news/silver-use-103020132

Another one for US silver usage for 2013:

http://geology.com/articles/uses-of-silver/

 

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