PM Daily Market Commentary - 5/20/2015

By davefairtex on Thu, May 21, 2015 - 2:14am

Gold rose +1.80 to close at 1209.30 on moderate volume, while silver was flat on the day.  Gold sold off in Asia, but rallied back to positive by end of day in NY.  It was a relatively uneventful day, especially given the FOMC minutes release at 14:00 EDT which often causes turbulence in the markets but did not cause much of a fuss today.

Senior miners tried to rally today and failed, with GDX climbing +0.40% on light volume.  Juniors did rally, with GDXJ up +1.62% on moderately light volume.  Juniors continue to outperform the seniors, with junior miners back above the 9 EMA once again. 

The buck also tried rallying today but it mostly failed, printing an inverted hammer candle and rising only +0.15 to 95.51.  Could the dollar rally be petering out after only three days?  FOMC minutes releases are often a time of trend changes, but I'm not sure if anything changed today.

Gold was up in Euros today, rising +0.65%.

SPX (US equities) tried to rally again today but failed, dropping -1.98 to 2125.85.  At one point SPX was up almost 10 points immediately following FOMC minutes release, but the rally was sold hard almost immediately.  VIX was mostly unchanged, up +0.03 to 12.88.

Bond ETF TLT rose slightly, closing up +0.27%.  Bonds are chopping around the low, trying to figure out if perhaps they want to rally after a five week decline.  Yield on the 20 year is up 0.55%, while capital losses for bondholders is around 10%.  Janet Yellen isn't happy - that's why she is talking down the equity market, trying to get money to flow back into bonds.

The CRB (commodity index) was mostly unchanged moving up +0.09%, a very modest move given yesterday's big selloff.

WTIC (west texas crude) recovered a bit more, climbing +0.49 to 58.76, but not enough to push oil back above its 9 EMA.  The Petroleum Status report reveals a drop in crude oil inventories, down -2.7M barrels.  The market reacted with volatility at the moment of release at 10:30 EDT, but did not end up changing trend as a result.

I'm still looking at the junior miners as my tell.  They continue to suggest a dip rather than a correction for PM.  It will be interesting to see if gold can mark a low in the face of dollar strength - that would help to confirm the dip-not-correction theory.

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