PM Daily Market Commentary - 11/23/2015

By davefairtex on Mon, Nov 23, 2015 - 11:20pm

Gold fell -8.50 to 1068.20 on heavy volume, while silver dropped -0.04 to 14.10 on heavy volume as well.  PM sold off in Asia to start the day, bottomed out an hour before NY opened, and silver at least put in a nice rally after hitting a new multi-year low of 13.85.

Gold just looked weak today - it sold off right out of the gate, and never really recovered.  The buzz about an expedited Fed meeting on Monday might have contributed to gold's weakness, in addition to the dollar making a new high.  Last week's swing low in gold is still in play, as long as gold can manage to stay above 1062.  The only bit of good news: gold avoided making a new low.

While gold sold off, silver was hammered, making a new multi-year low of 13.85.  However silver didn't stay there for long, and the rally that followed pushed silver prices back up above 14 by the close.  Silver ended up printing a very nice hammer candle on the day - a strong-looking reversal bar.  Perhaps the push below the prior low helped the commercials to generate enough volume to close out a chunk of their shorts.  We'll see soon enough, but I liked the price action in silver today a lot more than gold; high volume reversal bars are often are seen at turning points.  It would not take much for silver to print a swing low tomorrow - just a close above 14.15 would do the trick.

Miners held tough today, with GDX falling -0.52% on light volume, while GDXJ dropped -0.96% on light volume as well.  Why do I say the miners held tough?  Well, with silver making new lows, and gold threatening to do so, both miner ETFs printed small doji candles and had very narrow trading ranges.  This tells me traders weren't selling mining shares in any real size.  Contrast that with the big nasty red candle that happened on Friday - perhaps the short term traders bailed out of their miners Friday, and only the longer term traders are left.  Its a theory anyway.  Computer remains long miners.

The buck rallied strongly today poking above 100 briefly to hit 100.07, but could not hold its gains, closing up +0.23 to 99.86.  Still, the buck made a new high, and remains above its 9 EMA, which is bullish and says the strong uptrend remains in place.  The Euro touched 1.0593 today, which is a new low for this cycle.  Buck remains strong; as long as it remains strong, gold will have a tough time rallying.

Equities had another narrow trading range day, falling -2.58 to 2086.59.  Energy in the rally seems to be fading a bit, but the VIX isn't sounding any alarms: VIX closed up +0.15 to 15.62. 

JNK dropped again, falling -0.09% and making a new low.  This was interesting, since oil rallied - this tells me that JNK is really not doing so well and to me that is a strong risk off signal.  Equity market may not make new highs after all, if JNK is the tell.

Bond ETF TLT rose +0.31%, a moderate move higher.  Bonds remain above their 9 EMA, and are slowly moving up towards the 50.  It is a step-by-step recovery for bonds.  If they can regain the 50, that would be a bullish sign for bonds, and probably bearish for equities.

The CRB fell -0.16%, making a new low on the day but not with any great velocity.  CRB is slowly moving lower - I suppose that's better than moving lower rapidly, which is what it was doing several weeks ago.

WTIC sold off early in Asia, but recovered several hours before the NY open, after Saudi Arabia suggested it would work with others to stabilize the oil market.  The market interpreted this as a sign that the supply situation might improve after the Dec 4th OPEC meeting, and sprinted up $2 in the space of about an hour.  WTIC climbed +0.53 to 41.99, after touching a low of 40.41.  Computer liked this so much it is now long crude.

Unfortunately, the upside momentum from gold's swing low didn't last very long.  That's not a great sign; gold is not ready to rally just yet, it would appear.  Likely a good chunk of that is the strong dollar, which has decided to rally to new highs instead of correcting.    My computer still believes the buck will correct; if true, then PM and commodities should recover.  Its the same song I've been singing for a while now, I'm afraid.

Some imagine that the age of COMEX is coming to an end in the near future - they see shortages behind every bush.  I look at premiums as my shortage indicator.  So far, I'm not seeing anything.  If you can still get 1000 oz silver bars for 3.5% over spot, and 100 oz gold bars for 2.25% over spot, this tells me we are not running out just yet.  Because of this, COMEX - in spite of the low amount of registered gold for each futures contract - still sets prices.  Likely that only changes when something shakes faith in the system.

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1 Comment

Penny551's picture
Status: Silver Member (Offline)
Joined: Nov 8 2012
Posts: 154
Options Expiration

today is Dec Gold Options Expiration.  Let's see if price might be permitted to start moving higher after this...

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