PM Daily Market Commentary - 11/10/2015

By davefairtex on Wed, Nov 11, 2015 - 1:04am

Gold fell -2.70 to 1088.70 on moderately heavy volume, while silver dropped -0.15 to 14.38 on moderately heavy volume too.  It seemed to me that a dollar rally caused PM prices to fall today.

Gold appears to be looking for a catalyst to start its recovery.  While there does seem to be buyers for gold in the 1080-1090 range and the downside velocity is mostly stopped now, the COMEX buyers do not want to bid gold prices higher just yet.  The strong dollar is probably one of the culprits, as is the relatively weak commodity complex.  Gold actually rallied in Euro terms today, so gold's modest retreat could be seen as a currency effect.

So far, silver has not found any support in its move lower, this being the 9th straight down day.  The struggle between managed money and the commercials has once again been won by the commercials.  We cannot know when silver will bottom out; today there did appear to be some modest support at 14.25, but its hard to say.  I want to see a solid reversal candle or a swing low.  While silver is oversold right now, it can always get "oversolder", and after that, it can go down some more - as a trader I respect once used to remind me.  That's why momentum indicators like RSI are only guidelines.

While GDX fell -2.60% on moderate volume and GDXJ dropped -2.28% on light volume, both ETFs avoided making new lows today.  That's a small amount of good news.  It is not the same thing as a bullish reversal, but at least it shows that the sellers aren't quite as completely in control of the mining shares the way they are in silver.  We are still waiting for a swing low in the miners.  Perhaps the PM reversal will appear first in the mining shares.

The buck climbed +0.31 to 99.39, making a new high for this cycle and continuing to confound my call for a top.  In truth, the buck remains above its 9 EMA, momentum indicators suggest no slowing of its upward progress, and on the other side of the fence, the Euro continues to plummet.  Until we get a moving average crossing, the dollar's current uptrend remains intact.  And as long as that's true, PM will continue to struggle.

After selling off early in the day, SPX found some modest support, rising +3.14 to 2081.72.  As sell-offs go, this one isn't particularly dramatic, at least not yet.  Although momentum has definitely turned lower for SPX, it does not look like the market is in a big hurry to fall.  If you are a bear, you probably aren't very happy.  VIX fell -1.23 to 15.29.

JNK continued dropping, losing -0.31% and continued to signal risk off.  So far the selling remains orderly in junk.

Bond ETF TLT rallied +0.30%, but earlier in the day it had been doing substantially better.  TLT printed an inverted hammer candle, which tells a tale of a failed rally.  Bonds continue to look weak, even on the days when they rally.

The CRB rose +0.10%; not much of a rally after four straight down days, some of which were relatively large.  Commodities continue looking weak.

WTIC fell again, dropping -0.48 to 43.63.  Oil spent much of the day in positive territory, but a storage report came out at 16:30 Eastern that suggested oil inventories continue to build - and this caused oil to spike sharply lower after market close.  Oil is now below 44 support, which is dangerous territory.

While PM is quite oversold, at levels where rallies usually take place, so far no rally.  Whether its a strong dollar, or weak commodities, or a "teflon" equity market that continues to draw capital flows, right now there is little love for COMEX PM contracts even at these low prices.  Perhaps the commercials are slowly covering while Managed Money continues to capitulate.  The commercials sure made a bundle on this move lower.  Eventually price will move higher, but I can't tell you when.

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1 Comment

KugsCheese's picture
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1469
Gold fell -2.70 to 1088.70 2.50 to 1091.40?

And is PP PM prices not updating again?

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