PM Daily Market Commentary – 01/07/2020

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  • Tue, Jan 07, 2020 - 11:58pm

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    davefairtex

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    PM Daily Market Commentary – 01/07/2020

Gold climbed +8.36 [+0.53%] to 1580.26 on extremely heavy volume, and silver rallied +0.25 [+1.37%] to 18.47 on heavy volume. The buck rose [+0.36%], while SPX [-0.28%] and crude dropped [-0.16%], and bonds were mostly unchanged [10-Year yield rose +1.0 bp].

Gold moved steadily higher for most of the day, closing at the highs. The spinning top candle was a bullish continuation, and forecaster fell, but remains in an uptrend. Gold is in an uptrend in all three timeframes.  Today marked a new 6-year closing high for gold.

COMEX GC open interest fell -3.4K contracts. Current open interest for GC: 73% of global annual production, down -0.32% today.

Futures are now projecting an 8% chance of one rate increase at the Jan 2020 meeting.

Silver fell slightly in Asia, and then spent the remainder of the day rallying, closing quite near the highs. The long white candle was a bullish continuation, and forecaster dropped, but remains in an uptrend. Silver is in an uptrend in all three timeframes. Today was a new 3-month closing high for silver, which is a positive sign.

COMEX SI open interest rose +798 contracts. Current open interest for SI: 135% of global annual production, up +0.46% today.

The gold/silver ratio dropped -0.72 to 85.56. That’s bullish.

The miners climbed in the morning, then gave a little back in the afternoon. GDX rose +0.96% on moderately light volume, and GDXJ rallied +1.67% on moderately light volume. XAU moved up [+1.08%]; the long white candle was unrated and forecaster climbed, but it remains in a downtrend. XAU remains in an uptrend in the weekly and monthly timeframes.

The GDX:gold ratio climbed +0.42%, and the GDXJ:GDXJ ratio climbed +0.70%.

Platinum rose +7.60 [+0.78%], palladium climbed +24.50 [+1.21%], and copper rose +0.01 [+0.25%]. That’s another new all time high for palladium.

The buck jumped +0.35 [+0.36%] to 96.60 on moderately light volume. The long white candle was a bullish continuation, forecaster climbed, rising into an uptrend. The buck is now in an uptrend in the daily and monthly timeframes.

Major currency moves included: CAD [-0.32%], EUR [-0.40%], AUD [-0.99%], GBP [-0.39%].

Crude dropped -0.10 [-0.16%] to 62.42 on moderately heavy volume. The long black candle was a bullish continuation, and forecaster dropped, but remains in an uptrend. Crude is in an uptrend in all three timeframes.

SPX fell -9.10 [-0.28%] to 3237.18 on moderate volume. The bearish harami candle was a possible bearish reversal (35%), but forecaster climbed, moving higher into its uptrend. SPX is in an uptrend in all three timeframes.

REITs [-1.10%] led the market lower, along with staples [-0.77%], while communication services [+0.13%] and tech [-0.04%] did best. This was a bullish sector map.

The VIX fell -0.06 to 13.79.

TLT dropped [-0.50%], the swing high candle was neutral, forecaster dropped, dropping into a downtrend. TLT is in an uptrend in the weekly timeframe. The 30-Year yield rose +2.0 bp to +2.30%.

TY inched down [-0.04%]. The doji candle was a reasonably strong bullish reversal (40%), forecaster dropped, but remains in an uptrend. TY is in an uptrend in the daily and weekly timeframes. The 10-Year yield rose +1.0 bp to +1.82%.

JNK moved down [-0.07%]. The short black candle was a bullish continuation and forecaster dropped, moving deeper into its downtrend. JNK is in a downtrend in the daily timeframe.

CRB fell -0.25%, with 4 of 5 sectors falling, led by energy (-0.78%).

Economic Reports

ISM Non-MFG Index: headline 55.0 (prior 53.9); report is expansionary.

Summary

The market-hours moves in gold and silver were positive; candle prints were bullish, forecasters are all pointing higher, and even the miners managed to show some strength. It was a reasonably positive trading day for PM, even though the buck rallied fairly sharply.  Gold/euros looked really good as a result.

Gold OI was once again not a factor in today’s price moves.  There does not seem to be any official intervention at this time, assuming we can trust the data from the CME.

Almost immediately after market close, Iran launched 15 missiles at a couple of Iraqi airbases where US soldiers were stationed. Early reports suggest there were no US casualties. The news caused gold to jump $35 (to $1613), and silver shot up 48 cents (to $18.89), while crude rose almost $3 (to $65.65). The metals have retreated from the highs since then, as has crude, although both gold and silver have retained much of their gains.

A tweet from Iran’s FM Zarif:

“Iran took & concluded proportionate measures in self-defense under Article 51 of UN Charter targeting base from which cowardly armed attack against our citizens & senior officials were launched.”

Perhaps that word “concluded” is what caused the reversal back down in crude.

So is this it? Only time will tell.

We remain in a news driven market.

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