PM Daily Market Commentary - 8/6/2015

By davefairtex on Fri, Aug 7, 2015 - 1:13am

Gold rose +4.90 to 1089.00 on moderate volume, while silver rose +0.07 to 14.62 on moderate volume also.  Gold and silver both staged modest rallies starting at 09:00 EDT, encouraged higher by a decline in the dollar.

Gold moved as high as 1093.30 in the early afternoon in NY, but was only able to hold onto half of those gains through the end of day.

Silver had the same intraday behavior as gold, but did slightly better.  However silver also was unable to close above its 9 EMA.

Miners did well early on, moving above the 9 EMA and it had executed a swing low by around mid-day.  However once gold started to fall, GDX dropped as well.  By the close GDX retained only a fraction of its gains, closing up only +2.14% on heavy volume.  No swing low for the senior miners today.

Junior miners did a little better, closing up +2.76% on moderate volume.  However they too remain unable to close above their 9 EMA.  This is the pattern in the PM space right now - rallies that don't hold through end of day, and the inability to close above their falling 9 EMA lines.  However once sentiment changes, I believe the miners will be off to the races, and I do not think that day is too far off.

The USD traded in a range on the day, ending up down -0.13 to 97.91.  USD remains above its 9 EMA, which looks bullish - and we know a bullish dollar isn't generally good news for PM.

SPX sold off today, dropping -16.28 to 2083.56 and making a new low.  SPX started selling off right at the open, and continued dropping for most of the day.  Although energy shares did extremely well (and some of the oil drillers just went nuts - RIG was up 12% on the day), the overall market did poorly.  Part of the problem was a weak indication for chain store sales, which took down the retail sector.  VIX rose +1.26 to 13.77.

Bond ETF TLT rose +0.89% today, moving back up towards its 200 MA.  Most likely the drop in SPX caused money to move into bonds.

The CRB (commodity index) fell yet again, down -0.62% making another new low.

WTIC (oil) dropped -0.26 to 44.84; oil sold off steadily starting in Asia up through mid-day in NY touching 44.20 at one point, but managed to rally back, printing a semi-bullish-looking hammer candle on the day. Brent oil did better, printing a doji candle and rising +0.11.  It is just possible we are looking at a reversal in oil soon, however I'd like to see both a swing low and a close above that 9 EMA before I get too excited.  As I mentioned, oil equities had a very good day in spite of oil's ongoing sell-off. 

I believe at some point soon the commodity complex will put in a tradable low, and this will greatly help PM reverse course.  That didn't happen today, but I'm starting to get a  more bullish sense from resource-based equities as well as gold and silver.   More and more momentum indicators are giving off bullish-looking signals; I could easily see a strong bounce occurring in the near future.

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