PM Daily Market Commentary - 6/22/2015

davefairtex
By davefairtex on Tue, Jun 23, 2015 - 4:39am

Gold fell -14.40 to 1185.40 on moderate volume, while silver rose +0.09 to 16.14 on very heavy volume.  Gold started selling off in Asia, through London, marking low of 1181.60 in NY at around 10 am EDT.  It didn't bounce much into the close.  Silver traded sideways during the same period, rising into the close.  Gold's selloff probably happened because of positive developments regarding Greece.

Gold continues to look weak - after rallying strongly for the first time in 6 weeks, the only thing it can manage to do is sell off almost immediately, losing all the gains from the rally.  Let's see if it can hold the uptrend line.  A possibility: based on recent price action, if Greece actually secures another bailout, we might see another leg down in gold - perhaps a retest of the 1140 lows.  Since I rate the bailout as a likely-to-happen event, that puts gold in a dangerous position.

Silver did extremely well given gold's drop - actually rising on a day when gold fell.  This caused the gold/silver ratio to drop -1.29 to 73.47, in just one day.  Is this bullish for PM?  I think in context, probably not, but at least for silver owners its a bit of comfort that silver isn't always doomed to underperform.  If gold can avoid selling off, we might see a nice silver rally.  Its a hope anyways.

Mining shares were hit today, with GDX dropping -1.66% on moderately light volume, and GDXJ fell -1.92% on moderate volume.  Miners have almost erased the post-FOMC rally at this point, and are back to looking ill once again - and this time the juniors are selling off too, with GDXJ back below the 50 MA.  It looks as though GDX will make a new low in the very near future.

The buck moved up +0.24 to 94.51, actually managing to climb even with all the positive news out of Europe.  The currency markets haven't appeared concerned about a Greek default for a while now, so the prospect of a settlement don't seem to be making much of an impact.

SPX (US equities) climbed higher today, up +12.86 to 2122.85, not far from a new all time high.  The news out of Greece had SPX up in the futures markets, and so at the open the market mostly just traded sideways for the remainder of the day, even selling off a bit towards the end.  VIX dropped -1.22 to 12.74.

The Greek stock market was up around 9% today; at least one market was happy at the thought of a settlement with Greece.

Bond ETF TLT had a horrid day, falling -2.04%.  Bonds were just sold all day long, and closed at the day lows.  Bonds continue to look quite weak.

The CRB (commodity index) rose +0.50%, a decent performance given the climbing dollar, but CRB remains in limbo as to direction.

WTIC (west texas crude) also rose, up +0.57 to 60.26, still dead in the middle of its recent trading range.

Gold still lacks a catalyst - a happy can-kicking outcome in Greece doesn't help those westerners decide they want to buy more gold.  Silver did perk up a bit at the prospect right alongside some of the other commodities, so there's that.  But mining shares followed gold lower, and this has me concerned.  At this rate, I think its more likely than not we have a re-test of the 1140 lows, especially if there is a settlement in Greece.

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