PM Daily Market Commentary – 10/3/2016
Gold fell -4.80 to 1314.00 on light volume, and silver plunged -0.39 to 18.86 on moderate volume. Silver is seriously underperforming gold. A dollar rally didn’t help matters any, neither did falling copper prices.
Gold fell for the 5th day in a row; it printed a new low, and came to rest just above gold’s uptrend line. While volume does not seem to be accelerating, prices just continue to drop day after day. Its not a good sign. A drop below the uptrend line would make things look even worse.
December rate-rise projection is at 58%.
Gold open interest at COMEX fell by -3,882 contracts.
Silver plunged much more dramatically than gold did, making a new low and also closing below its uptrend line. This is a clear danger sign, and it says to me that we almost certainly have lower PM prices ahead. Silver is pulling PM prices lower. The big red candle today confirmed last Friday’s shooting star – that’s bearish. The gold/silver ratio rose by +1.02 to 69.57. That’s bearish also. Really, there’s no good news coming from silver.
GDX fell -1.78% on moderate volume, while GDXJ dropped -1.69% on moderate volume also. GDXJ made a new low today, dropping below its uptrend line into a clear danger area, just like silver. The one modest good note is that the miners did recover some losses in the last hour of trading, however the overall candle print looked more like a swing high than anything else. Code says its bearish, at 40-53% chance of marking the high.
Platinum fell -1.96%, palladium fell -1.34%, and copper fell -0.99%. It was a bad day all around for both metals groups.
The buck rallied today, up +0.20 to 95.56, moving back above its 50 MA as well as the 9 EMA. The buck now appears to be slowly moving higher. If it continues, it won’t do PM any favors.
Crude rallied for the fourth day in a row, up +0.60 to 48.65. While crude continues to move higher following last week’s OPEC news, pundits continue to suggest that there will be no agreement, that OPEC can’t possibly keep any deal they make, and so on. I think there are risks to be sure, but as long as prices are rising, I’m going to believe them. Crude is not far from testing its previous high at around 49. A close above 49 would be quite bullish.
SPX fell -7.07 [-0.33%] to 2161.20; utilities were stomped again today (XLU:-1.41%), which is relatively unusual behavior. This makes five red candles in a row for XLU; has the reach for yield morphed into something else? Energy equities took a rest (XLE:-0.07%) i spite of the continuing rally in oil. -VIX rose +0.28 to 13.57.
TLT fell -0.33%, and is now down below all three moving averages. TLT looks to have formed a bearish-looking lower high. That’s bearish for bonds.
JNK was mostly unchanged, up +0.02%. JNK continues to move steadily higher.
CRB rallied +0.38%; energy and agriculture led. CRB is slowly moving back into bullish territory.
PM weakness is continuing and is now even starting to accelerate. The close below the uptrend lines is a clear danger sign that should not be ignored. Next stop for gold is the previous low at 1302. A break below that – its probably “lookout below” given the lack of buy-side enthusiasm for PM right now. It could all reverse dramatically tomorrow, but for now, trend is down. Be careful out there.
Note: If you’re reading this and are not yet a member of Peak Prosperity’s Gold & Silver Group, please consider joining it now. It’s where our active community of precious metals enthusiasts have focused discussions on the developments most likely to impact gold & silver. Simply go here and click the “Join Today” button.
Gold was pounded through its previous low this morning a little after 8 am. Once through 1308, it didn't take long to plunge through 1302, and the selling has been intense ever since. Gold's low so far is 1283.
Miners of course have cratered, but not as badly as I might have expected, GDX is down -5.70%; we will know more after the first hour (and the first wave of selling) is over. So far the miners haven't experienced one of those relentless bail-out-at-all-costs days, but the day is still very young.
My suggestion: don't be too eager to buy this dip; PM might dip a whole lot further before it prints a low. I think the risk of that outcome is higher near-term than the risk of missing out on the next massive rally.
At least part of the problem is a strong dollar rally; buck is up +0.69% today, breaking out to a new high.
I think silver is the key these days. It led us lower, and – at least my theory is, it may also show the first signs of recovery at the lows. If gold finds support but silver continues to fall, then most likely we will continue going lower.
Silver should have some support around 18. Given that its at 18.07 right now, that's really not very far away.
price widget on peak prosperity for silver shows 19.06 right now, about $1 higher than everyone else.
silverprice.org shows 18.04
Silver down over 5% to $17.80 now and gold down over 3%. Just a brutal day.
Going to be very interesting to see what happens when they open again for business…. I have never seen the gap so big;
Seems like it's another chance for laggers (like me). Hooooorayyyyy!!!!
I would love to hear the observations of you economically sophisticated folks. (You know who you are.) So money flowed OUT of PM today. Were was it going to?
Martin Armstrong and Jeff Nielson have been two of the very few in the alt media/pm space who have not been super bullish on gold and miners. In fact, Nielson has been beating the drum that this entire move has been a fake rally, manipulated up to suck investors in and then to be crashed, along with the financial markets. Only then, would PMs experience a real, non-manipulated rise. Looks like there may be something to that premise after all.
Listening to various interviews and reading various blog posts across the Web, most PMers continue to expect the move this year to be the beginning of a new bull run. Lately, though, many of them are seemingly more and more perplexed.
Feels more like a pump and dump than a new bull market.
Now that $18 has given way, $17.50 would reperesent a 50% retracement from the run from $14-$21….Below there is the rising 200MA, currently $17.03.
I'm certainly not trying to catch this falling knife, but will be watching closely for the first sign of a reversal.
Recently, going into "market moving events," like FOMC, etc with an oversold RSI has resulted in big bounces, although short lived. The jobs #s on Fri should be interesting…