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PM Daily Market Commentary – 11/6/2019

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  • Thu, Nov 07, 2019 - 05:41am

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    davefairtex

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    PM Daily Market Commentary – 11/6/2019

Gold rebounded +6.99 [+0.47%] to 1497.96 on heavy volume, while silver recovered just +0.02 [+0.11 %] to 17.72 on moderately heavy volume. The buck fell slightly [-0.05%] as did the buck [-0.05%], crude dropped a lot harder [-1.61%] while SPX edged higher [+0.07%] and bonds rallied [10Y yield -5.2 bp].

It appeared that the positive sentiment from yesterday’s trade news was at least somewhat unwound today; the parties appear to be having trouble sorting out where they will sign the agreement. Trump wanted Iowa (Xi said no), and the tussle over location appears to be giving everyone a bit of pause.

Gold moved slowly higher for most of the day. The short white candle was unrated, and while forecaster did bounce back, it remains in a strong downtrend. Gold remains in a downtrend in all 3 timeframes.

COMEX GC open interest rose +3,841 contracts.

Futures are projecting a 8% chance of a rate cut in December.

Silver didn’t look nearly as strong as gold, plunging to a new low of 17.36 before bouncing back by end of day. The takuri line candle was a bearish continuation, and while forecaster did move higher, it remains in a downtrend. Silver remains in an uptrend in both weekly and monthly timeframes.

COMEX SI open interest fell -1,213 contracts.

The gold/silver ratio rose +0.30 to 84.53. That’s bearish.


Miners rebounded today, with GDX up +1.22% on moderately heavy volume, while GDXJ rose +1.43% on light volume. XAU rose +0.80%, the spinning top candle was a bearish continuation, and forecaster fell, pushing XAU into a slight downtrend. XAU remain in an uptrend in both weekly and monthly timeframes.

The GDX:gold ratio rose +0.75%, and the GDXJ:GDX ratio climbed +0.23%. That’s somewhat bullish.


Platinum was unchanged, palladium rose +0.92%, while copper fell -1.07%.

The buck fell -0.05 [-0.05%] to 97.52. The bearish harami cross was actually a bullish continuation, and forecaster moved higher into its uptrend. The buck remains in an uptrend in the daily and monthly timeframes.

There were no large currency moves today.

Crude fell -0.92 [-1.61%] to 56.36. A reasonably strong intraday rally was cut short by a bearish-looking EIA report. The long black candle was a bullish continuation, and while forecaster fell, it was not enough to move crude into a downtrend. Crude remains in an uptrend in all 3 timeframes.

EIA today was bearish, as mentioned: crude: +7.9m, gasoline: -2.8m, distillates: -0.6m. The market plunged about $1.50 following the report.

SPX rose +2.16 [+0.07%] to 3076.78. The short white candle was a bullish continuation, and forecaster inched lower but remains in a reasonably strong uptrend. SPX remains in an uptrend in all 3 timeframes.

Financials did best (XLF:+0.51%) along with staples (XLP:+0.41%), while energy (XLE:-2.04%) and communication services (XLC:-0.35%) did worst. This was a slightly bullish sector map.

VIX rose -0.48 to 12.62.

TLT rose +0.61%, the swing low candle was bullish (49%), and forecaster moved higher but remains in a downtrend. The 30-year yield fell -4 bp to 2.30%. TY rallied also, moving up +0.22%, the bullish harami was a bearish continuation, and forecaster inched higher but remains in a strong dowtrend. TY remains in a downtrend in all 3 timeframes. The 10-year yield fell -5.2 bp to 1.81%.

JNK fell -0.16%, the long black candle was a bearish continuation, and forecaster dropped back into a downtrend. JNK is hinting at risk off right now. BAA.AAA differential was unchanged at +88 bp. Credit concern remains modest at best.

CRB fell -0.87%, with 4 of 5 sectors falling, led by energy (-1.63).

Copper gave back much of yesterday’s rally; its that pesky trade deal again. SPX doesn’t look as though it is impressed one way or the other, while junky debt continues to sell off.  There may be a message that the crappy debt market is trying to tell us; JNK may have formed a lower high, and while SPX is at new all time highs, JNK continues to move lower.  That’s not a good sign for risk assets longer term.  At the same time, gold’s bounce was a bit feeble – more than a bit feeble.  It does not look like a low.

After market close, in Asia trading, an article came out overnight that suggested the US had agreed to a tariff rollback in phases as progress is made on the agreement. This doesn’t sound too horrible, although it caused gold to sell off once again.

https://www.bloomberg.com/news/articles/2019-11-07/china-says-it-agreed-with-u-s-to-roll-back-tariffs-in-phases

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