PM Daily Market Commentary - 12/28/2015

davefairtex
By davefairtex on Mon, Dec 28, 2015 - 11:27pm

Gold fell -7.30 to 1068.50 on light volume, while silver was crushed, dropping -0.47 [-3.23%] to 13.91 on moderate volume.  Silver looked to be the victim of repeated short assaults; it looked to me like someone just wanted silver prices to be lower today.  Silver's fall was roughly correlated to the drop in oil, but the pattern felt sharper and more deliberate.

Gold's drop was relatively minor; while gold did close below its 9 EMA, it remains within striking distance of the previous high at 1088.30.  It is a bit disconcerting that with the COT report so bullish, gold cannot seem to find a steady group of buyers at the COMEX.  Weakness in oil prices may be to blame.

So that's five steps forward, and one giant step back for silver, which was hammered relentlessly lower by the shorts today.  I can't really blame this one on oil; I'd expect a drop in silver after oil's losses, but not of this magnitude.  Silver seems to be the target of deliberate, repeated short selling at COMEX in recent weeks.  Looking at the chart, it seems as though someone doesn't want price to advance much beyond 14.25.

GDX fell -3.38% on moderately light volume, and GDXJ lost -3.24% on moderate volume.  While gold and especially silver are finding it difficult to rally right now at the COMEX, the mining shares are still in a shallow medium term uptrend.  My read is that they continue to outperform metal right now, at least over that medium term timeframe.  I'd feel a lot more comfortable if they could close above the 50 MA, however.  Otherwise...miners have a head & shoulders-like feel to them, which is a bearish chart pattern.

The buck was more or less flat today, dropping just -0.02 to 98.00. The buck is slowly moving lower after the FOMC meeting; this should be helping PM, but the lack of a rally shows that gold just isn't finding buyers in the west; not in Europe, and not at the COMEX.

SPX fell -4.49 to 2056.50 today.  SPX was down as much as 20 points today, but it found buyers around the 9 EMA and rallied into the close.  In spite of the buyers appearing at end of day, SPX printed a swing high, which is bearish.  VIX rose +1.17 to 16.91.

JNK fell -0.59%, also printing a swing high.  JNK didn't like the drop in oil prices, I think.

Bond ETF TLT rose +0.30%, money flowing from equities to bonds, and from junk to high grade.  That's a risk off signal.

CRB dropped -0.93%, led lower by the drop in oil prices.  CRB remains just barely above its 9 EMA.

WTIC fell -1.43 [-3.75%] to 36.69 today, printing a swing high (if one can call this brief three-day rally a "high"), driving back below its 9 EMA.  WTIC is back to looking ugly again; Brent never really did look all that good, and it is 50 cents from making yet another new low.

US Natural gas ($NATGAS) is the one bright spot in commodities, rallying a massive +0.18 [+8.37%] to 2.27, closing above its 50 MA for the first time since August.    Natgas is up more than 50 cents in six days, a really massive move, wiping out an entire month's worth of losses in about a week.  Some of this move is definitely short covering, but not all of it.

So we got our drop in the buck, but oil appears to be heading back into a downtrend once again.  Confidence remains in central banking, a commodity-driven rebound is not happening just yet, and so PM remains uninteresting to buyers in Europe or at COMEX.

For what its worth, my computer is short just about everything; PM, oil, and equities; the only thing it likes are treasury bonds, natgas, and utilities.

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