PM Daily Market Commentary – 11/3/2014
Gold dropped -8.10 to 1165.40 on moderate volume, and silver was off -0.05 to 16.12 on moderate volume also. PM traded in a range today, with gold closing at the lower end of the range, while silver ended up closer to the middle, printing a doji on the day. Are the buyers showing up with gold on sale? Not yet, they aren't.
The dollar had another big move higher today, up +0.44 to 87.41, continuing its breakout from last Friday. Next real resistance is the 89-90 resistance zone dating back to the March 2009/June 2010 previous highs. The dropping Yen is helping the buck to rise – Yen was off -1.41% just today, another big move.
Mining shares rallied today, with GDX up +4.07% on heavy volume, and GDXJ was up +5.88% on very heavy volume. Both mining ETFs confirmed rebounds of their doji prints from Friday, which is a buy signal for the miners. In addition, the GDX:$GOLD ratio also staged a nice rally today as well. That makes two bullish signs in PM today – the first in quite a while.
However, I'd feel a lot more confident about this signal if gold and silver had rallied today – given that they didn't, and oil dropped, and commodities retreated, I'm a little bit concerned that this signal might be less reliable than usual.
SPX tried to make a new high today and failed, dropping -0.24 to 2017.81 and printing a doji on the day. VIX rose +0.70 to 14.73. SPX is now mildly overbought – if it took a rest here or even retreated, I wouldn't be too surprised.
Commodities dropped -0.20%. WTIC was hit hard, dropping -2.51 and breaking below support, making a new low to 78.19. Brent was down only -1.08 to 84.78 and looked relatively better. It will be tough for gold and silver to rally with oil continuing to make new lows.
Mining shares actually had a good day today. Can they continue to rise with everything else dropping? They might be leading PM higher, but I'll be more of a believer if we can string together two days of upward movement in the mining shares.
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