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PM Daily Market Commentary – 03/31/2020

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  • Wed, Apr 01, 2020 - 03:34am

    #1

    davefairtex

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    PM Daily Market Commentary – 03/31/2020

Gold plunged -52.25 [-3.18%] to 1590.98 on light volume, and silver moved down -0.06 [-0.42%] to 14.16 on moderately light volume. The buck fell slightly [-0.18%], SPX dropped harder [-1.60%], crude was mostly unchanged [+0.04%], while bonds moved up [the 10-Year yield fell -3.0 bp].

Gold chopped sideways until London, when it was pounded lower several times; it tried rallying again, but then was pounded again repeatedly, all the way into into the close. The black marubozu candle was a bearish continuation, forecaster dropped, falling into a downtrend. Gold is in an uptrend on both the weekly and monthly timeframe.

Gold/euros plunged -47.42 [-3.18%] to 1443.88 on light volume. The black marubozu candle was a bearish continuation, forecaster dropped, moving deeper into its downtrend. Gold/euros is in a downtrend in all three timeframes.

COMEX GC open interest fell -23K contracts. That was -7 days of global annual production in paper removed from the market. Current open interest for GC: 46% of global annual production, down -2.10% today.

Silver chopped sideways today, first spiking higher, then selling off. Curiously, as gold was repeatedly smashed lower, silver did not seem to be as badly affected. The bullish doji star candle was a bearish continuation, but forecaster climbed, moving back into an uptrend. Silver remains in downtrend in the weekly and monthly timeframes.

COMEX SI open interest fell -51 contracts. Current open interest for SI: 80% of global annual production, down -0.03% today.

The gold/silver ratio dropped -3.20 to 112.36. That’s quite bullish.

The miners rallied strongly for the first half of the day, then reversed direction at around noon, selling off steadily right into the close. GDX plunged -3.72% on light volume, and GDXJ fell -3.30% on moderately light volume. XAU dropped -1.79%, the spinning top candle was unrated, and forecaster was unchanged, remaining in a downtrend. XAU is in a downtrend in all three timeframes.

The GDX:gold ratio dropped -0.56%, and the GDXJ:GDX ratio climbed +0.43%. That’s neutral.

Platinum fell -4.50 [-0.62%], while palladium rose +77.77 [+3.43%]. Platinum just drifted lower, while palladium managed to close back above the 50 MA. Both had strong performances compared to gold.

Copper shot up +0.05 [+2.31%] to 2.21 on moderately light volume. The swing low candle was a likely bullish reversal (65%), forecaster climbed, rising into an uptrend. Copper is in a downtrend in both the weekly and monthly timeframes. Copper also closed convincingly back above the 9 MA. It appears as though copper is in the process of putting in a longer-term low.

The buck moved down -0.18 [-0.18%] to 99.09 on light volume. The long black candle was a bullish continuation, forecaster climbed, but remains in a downtrend. The buck is in an uptrend in the weekly and monthly timeframes.

Major currency moves included: CAD [+0.51%], AUD [-0.33%].

Crude was unchanged +0.01 [+0.04%] to 24.18 on moderately light volume. The doji candle was a bearish continuation, and forecaster climbed, but remains in a downtrend. Crude remains in a downtrend in all three timeframes.

SPX dropped -42.06 [-1.60%] to 2584.59 on moderate volume. Most of the losses came in afternoon trading – a last-30-minute rally attempt failed. The bearish harami candle was a reasonably strong bearish reversal (47%), forecaster dropped, but remains in an uptrend. SPX is in a downtrend in both the weekly and monthly timeframes. Normally the harami candle patterns are fairly weak – this one was extremely strong for a harami.

Utilities [-4.21%] led the market lower, along with REITs [-3.29%], while energy [+1.51%] and communication services [-0.18%] did best. This was a bullish sector map.

The VIX fell -3.54 to 53.54. Is fear really subsiding? The close didn’t look great.

TLT fell -0.81%. The swing high candle was a likely bearish reversal (62%), forecaster dropped, but remains in an uptrend. TLT remains in an uptrend in the daily and weekly timeframes. The 30-Year yield rose +3.0 bp to +1.34%.

TY dropped -0.05%. The short white candle was a bullish continuation, forecaster dropped, but remains in an uptrend. TY remains in an uptrend in all three timeframes. The 10-Year yield fell -3.0 bp to +0.67%.

JNK fell -0.64%. The bearish harami candle was a bullish continuation, forecaster dropped, but remains in an uptrend. JNK remains in an uptrend in the daily and weekly timeframes. Crappy debt is starting toshow a bit of weakness,
but the candle print was stronger than SPX.

Physical Supply

ETF Discount to NAV:
* CEF +1.39%
* PHYS +3.02%
* PSLV +0.82%
Bullion Vault Premiums:
* gold: +3.62
* silver: +0.07

All “physical” ETFs have moved into premium, with PHYS the standout. Today’s gold smash didn’t trigger much selling at all in PHYS; it fell just -0.30%.

Kilo gold bar: 4.96% premium. No large silver bars. Cheapest 100 oz bar: 19.01% premium.

There is a shortage of both physical gold and physical silver right now.

Economic Reports

Yield Curve Inversion: the 1-10 spread fell -6 bp to +50 bp today. 1Y: 0.17% (+3 bp), 10Y: 0.67% (-3 bp).

Summary

What was the story today with gold’s big smash? Well, the drop in OI suggests it wasn’t official intervention. Either the report is lying, or the smash has something more to do with month and quarter end, with funds repositioning money elsewhere – out of gold, into – something else? Perhaps some bankster wanted some call options he wrote to expire worthless. From our view from the cheap seats, we can never really know.

I do believe the sharp drop in OI continues to be a positive sign for gold.

Silver looked quite strong in comparison to gold – it seemed mostly immune to whatever selling pressure that was forcing gold lower. Platinum was also just drifting lower rather than cratering.

Miners are still weak. At some point they will be great buys, but who knows when the selling pressure on the mining shares will let up.

SPX appears as though it might have put in a top. The harami pattern was quite strong. JNK isn’t confirming, at least not yet.

Copper looks positive, while crude is looking fairly weak. No clear signal yet from these two.

That’s all I’ve got.

 

  • Wed, Apr 01, 2020 - 07:37am

    #2

    JAG

    Status Gold Member (Offline)

    Joined: Oct 26 2008

    Posts: 364

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    Re: Gold Open Interest

Hey DF, here are two short videos from a trusted source regarding gold OI

I think you will find them interesting….J

  • Wed, Apr 01, 2020 - 12:20pm

    #3

    davefairtex

    Status Member (Offline)

    Joined: Sep 03 2008

    Posts: 2025

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    Wuhan Virus Patient Zero: Discovered

Her name: Huang Yan Ling.

Unfortunately, she has disappeared, and her bio has been scrubbed from the Wuhan Institute of Virology lab where she worked, but informational traces of her remain.

According to a paper written by a Chinese professor (Botao Xiao, PhD) from Wuhan, researchers working at the level 4 lab on a project studying bat corona viruses were splashed with blood and urine samples from the bats being studied.  This is how they were infected.  He alleges the researcher died, and the funeral workers caught the virus from her body.

10-year China veteran Laowhy86 connects all the dots in the following 8 minute video.  I found it very compelling.

https://youtu.be/bpQFCcSI0pU

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