PM Daily Market Commentary – 1/8/2017
Gold rose +0.90 [+0.07%] to 1321.20 on moderately heavy volume, while silver dropped -0.10 [-0.55%] to 17.16 on heavy volume. The buck staged a strong rally [+0.45%]; gold actually looked reasonably strong given the big move in the buck. Can gold hang on if the buck continues higher? That’s the question.
Gold mostly chopped sideways today, apparently unaffected by the strongly rising dollar. The spinning top candle was a bullish continuation; the forecaster dropped -0.05 to 0.0, which is a sell signal (just barely) for gold. Gold remains above its 9 MA, which is a positive sign.
COMEX GC open interest rose by +1,589 contracts today.
Rate rise chances (March 2018) fell to 61%.
Silver dropped steadily for much of the day, making a new low to 17.06 in the late morning in US before bouncing back into the close. Print was a bearish engulfing – which was actually just a bullish continuation. Forecaster disagreed, dropping -0.21 to -0.13, which is a sell signal for silver. Silver is definitely looking weaker than gold right now. Still, silver is also above its 9 MA, which is good news.
COMEX SI open interest rose +316 contracts today.
The gold/silver ratio rose +0.48 to 76.97. That’s bearish.
The miners sold off for the first two hours, and then mostly moved sideways for the rest of the day. GDX fell -1.06% on moderately heavy volume, while GDXJ dropped -1.54% on very heavy volume. XAU forecaster plunged -0.18 to -0.26, moving deeper into a downtrend. XAU has dropped through its 9 MA; that’s a bearish sign. Miners usually lead, so this looks unfortunate for the near term moves in the PM group.
Today, the GDXJ:GDX ratio fell, as did the GDX:$GOLD ratio. That’s bearish.
Platinum moved up +0.23%, palladium climbed +0.76%, and copper fell -0.03%. Platinum made a new high – it continues to be relatively unaffected by the selling pressure that the rest of PM is experiencing. Although copper has fallen 5 of the last 6 days, it still remains in an uptrend.
The buck rallied +0.41 [+0.45%] to 92.05. Print today was a confirmed NR7, which had a 75% chance of being a bullish reversal. Forecaster jumped +0.32 to -0.20. That’s still a downtrend, but one that appears to be in the process of reversing. A stronger dollar, as always, will cause problems for PM. In looking at the news, I’m not really sure what caused the dollar rally. Buck is back above its 9 MA; that’s bullish.
Crude rose +0.31 [+0.50%] to 61.89. Mostly crude moved sideways today, moving higher in the afternoon in the US. From what I can see, crude seems relatively stable here above 60; energy equities continue to move steadily higher, with oil services doing especially well – big moves on very heavy volume. The equity market is telling us that it thinks the oil glut may be over. Certainly we’ve seen some bearish-looking EIA reports, but they haven’t seemed to dent confidence in oil prices. Forecaster fell -0.05 to +0.14, which is still an uptrend. API release due out tomorrow after market close.
SPX rose 4.56 [+0.17%] to 2747.71, another all time high. It was a relatively quiet day. The spinning top candle had a 41% chance of marking the top (I think that’s just the high RSI of 85 talking), but the forecaster rose +0.01 to +0.98, which remains a strong uptrend. Utilities led (XLU:+0.94%) while sickcare trailed (XLV:-0.36%). Might utilities have put in a low? Candle print for XLU: swing low, 71% chance of a bullish reversal. They’ve had a 10% drop off the highs – with the current yield of 3.33%, XLU holders will need 3 years of dividend payments to make up for their losses over the past few months.
VIX rose +0.30 to 9.52.
TLT fell -0.06%, continuing to chop sideways. TY dropped -0.01%, also going nowhere. TY is right at multi-month lows, and the technicals remain bearish: forecaster is at -0.48, and the southern doji candle print was a bearish continuation. However – the bounce in utilities might be a leading indicator for bonds.
JNK tried to rally, but the rally failed, dropping -0.11% and printing a shooting star candle which had a 32% chance of marking a top. Forecaster fell -0.14 to +0.40. That’s still a relatively strong uptrend.
CRB rose +0.01%; 3 of 5 sectors rose, led by industrial metals. Momentum for commodities is starting to flag a bit.
Sell signals in gold, silver, the miners – but not platinum, palladium, or copper. The dollar may be reversing higher, and we are seeing hints of a low in utilities – those two things might be related. Euro printed a swing high today. Is this peak-Euro-for-now? Peak enthusiasm for the possible German grand coalition? Money from Europe buying the dip in yield here in the US?
Gold probably corrects from here. How far probably depends on two things: the buck, and what happens to the rest of the commodity complex.
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