PM Daily Market Commentary – 12/02/2020

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  • Thu, Dec 03, 2020 - 04:48am

    #1

    davefairtex

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    PM Daily Market Commentary – 12/02/2020

Gold rallied +15.13 [+0.83%] to 1834.81 on moderately light volume, and silver climbed +0.09 [+0.37%] to 24.23 on moderately light volume. The buck continued falling [-0.20%], SPX moved higher [+0.18%], crude climbed too [+1.33%], while bonds fell [the 10-Year yield rose +3.0 bp to +0.95%].

Gold chopped sideways in Asia, then rallied in London and New York, ending the day at the highs. The closing white marubozu candle was a bullish continuation, forecaster fell, but remains in an uptrend. Gold is in a downtrend in both the weekly and monthly timeframes.

Gold/euros climbed +6.43 [+0.43%] to 1516.90 on moderately light volume. The swing low2 candle was a likely bullish reversal (70%), forecaster climbed, moving higher into its uptrend. Gold/euros is in an uptrend in the daily and monthly timeframes.

COMEX GC open interest rose +5.1K contracts. Current open interest for GC: 50% of global annual production, up +0.47% today. 22 GC contracts stood for delivery at COMEX today.

While there was no short-covering, and few contracts stood for delivery, gold continued moving higher following yesterday’s swing low pattern. Today’s move price back above the 9 MA, but forecaster is suggesting that the uptrend is a very mild one.

Silver chopped sideways in a fairly large range, ending the day just slightly higher than when it started. The high wave candle was a bullish continuation, forecaster dropped, but remains in an uptrend. Silver is in an uptrend in the daily and monthly timeframes.

COMEX SI open interest fell -654 contracts. Current open interest for SI: 87% of global annual production, down -0.38% today. 1829 SI contracts stood for delivery at COMEX today.

The gold/silver ratio climbed +0.34 to 75.72. That’s somewhat bearish.

The trading range for silver was fairly wide, and it just didn’t seem quite as bullish as gold. Silver ended the day just barely above the 50 MA, which is a positive sign. It really just looked like a day of rest for silver, after yesterday’s monster move higher. A relatively large number of contracts stood for delivery for silver today.

Miners fell at the open, bounced back almost immediately, then chopped sideways for the remainder of the day. GDX inched up +0.03% on moderate volume, while GDXJ fell -0.27% on moderate volume. XAU rose +0.52%, the spinning top candle was a bullish continuation, forecaster climbed, moving higher into its uptrend. XAU is in a downtrend in both the weekly and monthly timeframes.

The GDX:gold ratio dropped -0.80%, while the GDXJ:GDX ratio dropped -0.29%. That’s mildly bearish.

As with silver, today looked like a day of rest for the miners.

Platinum rose +13.20 [+1.29%], while palladium fell -9.09 [-0.38%]. Platinum broke out to a new 4-month high today. Something is definitely up with this metal – it is very bullish right now. The gold/platinum ratio, hitting 2.50 at the March lows, is now down to 1.80. For whatever reason, the ratio just fell off a cliff starting in early November. Money really is pouring into platinum right now.

Platinum rose +13.20 [+1.29%], while palladium fell -9.09 [-0.38%]. Platinum broke out to a new 4-month high today. Something is definitely up with this metal – it is very bullish right now. The gold/platinum ratio, hitting 2.50 at the March lows, is now down to 1.80. For whatever reason, the ratio just fell off a cliff starting in early November. Money really is pouring into platinum right now.

Copper fell -0.01 [-0.29%] to 3.48 on moderate volume. The long white candle was a bearish continuation, forecaster dropped, but remains in an uptrend. Copper is in an uptrend in all three timeframes.

Copper remains in an uptrend, just pennies from its recent high.

The buck fell -0.18 [-0.20%] to 91.05 on moderate volume. The long black candle was a bearish continuation, but forecaster climbed, rising into an uptrend. The buck is in a downtrend in both the weekly and monthly timeframes.

Major currency moves included: EUR [+0.40%], GBP [-0.46%], AUD [+0.45%].

Mixed signals today for the buck; forecaster thought today’s move was positive, while the canddle code didn’t agree. The buck made a new multi-year low; d/w/m RSI7 is 14/31/27, which is oversold.

Crude climbed +0.59 [+1.33%] to 45.04 on moderate volume. The long white candle was a bearish continuation, but forecaster climbed, rising into a state of no-trend. Crude is in an uptrend in the weekly and monthly timeframes.

EIA: crude -0.7m, gasoline +3.5m, distillates +3.2m.

Crude had a very wide trading range today; the EIA report seemed to cause a sharp rally, which was then almost completely retraced by end of day. The current trend is basically flat.

The OPEC+ group still hasn’t come to a resolution yet on extending its output cuts.

https://oilprice.com/Energy/Crude-Oil/Is-OPEC-Finally-Making-Progress-Towards-An-Oil-Output-Deal.html

SPX rose +6.56 [+0.18%] to 3669.01 on moderate volume. The closing white marubozu candle was a bearish continuation, forecaster dropped, but remains in an uptrend. SPX is in an uptrend in all three timeframes.

Energy [+3.15%] led, along with financials [+1.08%], while materials [-1.30%] and REITs [-1.07%] did worst. This was a bullish sector map.

The VIX rose +0.40 to 21.17.

Not much happened today in equities. It was another new all time closing high – but on a very small move.

TLT dropped -0.79%. The long black candle was a low-percentage bullish reversal (29%), forecaster climbed, but remains in a downtrend. TLT is in a downtrend in both the daily and weekly timeframes.

TY was unchanged. The doji candle was a low-percentage bullish reversal (26%), forecaster dropped, moving deeper into its downtrend. TY is in a downtrend in all three timeframes. The 10-Year yield rose +3.0 bp to +0.95%.

Rates continue to move higher.

JNK moved up +0.20%. The long white candle was a bullish continuation, forecaster dropped, but remains in an uptrend. JNK is in an uptrend in the daily and weekly timeframes.

It was another new closing high for crappy debt today. It continues to signal risk on.

Physical Supply

The GLD ETF tonnage on hand was unchanged at +0.00 tons, with 1191 tons remaining in inventory.

ETF Discount to NAV:
* CEF -4.31%
* PHYS -1.87%
* PSLV -4.22%
Gold dealer big bar premiums:
* gold [1kg]: +1.29%
* silver [100 oz]: +5.64%

Physical ETF discounts remain fairly wide; retail gold premiums fell somewhat, as did the silver premiums.

Summary

Gold, silver, and the miners all moved higher. Gold looked to be the strongest, while silver and the miners had a day of rest. A fair number of contracts stood for silver delivery at COMEX today. Retail demand seems modest right now.

Not much happened today in risk assets, with crude being the exception. Crude’s trading range was very wide; possibly this volatility is due to trouble in OPEC+, which does not have a deal yet.

The 10-year bond rates are slowly creeping higher – before we know it, the 10-year might be yielding more than 1%.

While there are still lots of things up in the air, not much happened today. Perhaps it is the calm before the storm.

  • Thu, Dec 03, 2020 - 05:40am

    #2

    sand_puppy

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    Chris, Adam: Self Directed IRA link??

The topic of a Self Directed IRA was discussed maybe a year or two back but I can’t find it on the site.  I understand that Chris is using it to buy land.

I’m interested in saving in PMs, land-trusts and Cryptos and understand I will need to have a Self Directed IRA to do that efficiently.

What was the company recommended?

  • Thu, Dec 03, 2020 - 06:09am

    #3
    JimboJim

    JimboJim

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    Self-directed IRAs

Hi Sand_Puppy,

I know your question was directed to Chris and/or Adam, but I thought I would pass on my experiences using the Self-directed IRA structure.  I used CheckBook IRA in 2009 to set-up a Self Directed IRA in Idaho.  The custodian they used at that time was IRA Services, (now called Forge Trust I think). Using the structure of a Self-Directed IRA, I have bought PM in the US and abroad and land in Ecuador, as well as set up a brokerage account in Australia to take advantage of Asian equity markets.  Also corporate brokerage accounts in the US.

In 2018, my wife used CheckBook IRA to set up her own SDIRA, and this time they recommended Kingdom Trust as the custodian.  Through her SDIRA, she has bought and stored PM in Singapore through Silver Bullion, Ptd and bought heavily into Crypto using a corporate account with Gemini, a major crypto exchange.  Also has corporate brokerage accounts with Schwab, IB, and TDA.

Overall, we have both been very satisfied with the flexibility that SDIRAs have given us.  Much better than a Traditional IRA limited to stocks and bonds.

PM me if you want more details about costs, procedures, etc in setting one up.

  • Thu, Dec 03, 2020 - 10:13am

    #4
    MGRS

    MGRS

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    Self directed IRA/401k

Sandpuppy:

Damion Lupo: The Qualified Retirement Plan (QRP)

I didn’t use Damien Lupo’s company, which I kind of regret.  While I’m happy with the end result, I had to do a lot of paperwork myself and my guy is not very responsive to my questions.  I missed some opportunities because of delays.  But my guy was cheaper.  False economy.

I have both a self directed Roth IRA and a self directed 401(k) (ie the QRP Lupo talks about).  The self-directed 401k is definitely a superior structure, allowing many more options, including taking physical delivery of assets like gold – you are the custodian, you just have to do it responsibly.  The SD IRA doesn’t allow you to do that.

  • Thu, Dec 03, 2020 - 10:19am

    #5
    MGRS

    MGRS

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    PM Daily Market Commentary – 12/02/2020

Another major advantage of a SD-401k is liability protection:  as I understand it, IRA exemptions in bankruptcy/lawsuits are regulated by state law, and therefore can be used to satisfy the debt, while 401k’s cannot since they are federally protected.  So you can declare bankruptcy in the event of a lawsuit judgement and come through it with your 401k investments intact, while you may lose almost all of your IRA depending on your state.

ed: also happy to answer questions if you want 🙂

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