PM Daily Market Commentary – 12/29/2017

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  • Fri, Dec 29, 2017 - 06:23am

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    davefairtex

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    PM Daily Market Commentary – 12/29/2017

Gold rose +5.80 [+0.45%] to 1297.20 on moderate volume, while silver rallied up +0.16 [+0.96%] to 16.91 on moderately light volume. The buck plunged -0.34%, making another new low. This accounted for most of the move higher in gold.

Gold appeared to get hit with a mild spike attack around 8:05 am, but it bounced back immediately and ended up closing near its high. It was another short white candle, which had a 32% chance of being a bearish reversal. Forecaster agreed, dropping -0.07 to +0.23. Gold is slowly approaching round number 1300. Will it make it through on this move? Probably yes, if only to hose the shorts. Mostly today’s gold rally was about the buck, I think.

COMEX GC open interest rose by +13,562 contracts today. Hmm. That feels like the commercials going short to me.

Rate rise chances (March 2018) remains at 62%.

Silver outperformed gold again today, dropping along with gold at 8:05 am but then it too bounced back hard, climbing back to close at the highs of the day. Silver’s closing white marubozu had a 35% chance of marking a top, while silver’s forecaster fell -0.06 to +0.26. Like gold, silver’s uptrend is slowing – according to the forecaster. Maybe its the effect of the falling dollar.

COMEX SI open interest fell -2,763 contracts today.

The gold/silver ratio fell -0.39 to 76.71. That’s bullish.

The miners suffered a brisk morning dip, which was bought, more or less. GDX rose +0.17%, while GDXJ fell -0.03%. Volume was light. The print was a spinning top, which the candle code felt had a 35% chance of marking the high. Forecaster for HUI fell -0.14 to +0.21. Thats still an uptrend, but miners continue to see selling pressure – they couldn’t rise on a fairly decent day for PM. That’s another warning sign.

Today, the GDXJ:GDX ratio fell, as did the GDX:$GOLD ratio. That’s bearish.

Platinum rose +0.67%, palladium climbed +0.40%, and copper rose +0.75%. It was another good day all around for the other metals group – new highs for both copper and palladium, and platinum forecaster actually issued a buy signal. Kind of odd, but it didn’t like something it saw a few days back.

As mentioned, the buck fell -0.31 [-0.34%] to 92.30, making a new low and looking quite bearish. The black marubozu had a 41% chance of being a bullish reversal – I’ll believe that when I see it. Forecaster did move up +0.04 to -0.56 – that’s still a strong downtrend. Buck made a new closing low today. If the buck keeps falling (mainly due to a strong Euro), the PM rally could just keep going and going…

Crude rose +0.30 [+0.50%] to 59.89. The trading range was narrow (resulting in a short white candle) and the forecaster dipped -0.04 to +0.11. Crude is struggling here at just below 60, but the longer it stays up here, the more likely we are to break out. EIA report was relatively bullish (crude -4.6m, gasoline +0.6m, distillates +1.1m) and the market responded positively to the report, rising off the days low right after the report.

SPX rose 4.92 [+0.18%] to 2687.54. SPX had another small sell-off, bought at end of day once more. The short white candle was a bullish continuation. SPX forecaster rose +0.41 to +0.52. Looks like more highs are ahead. Utilities did best (XLU:+0.55%) while consumer staples brought up the rear (XLP-0.16%). I’m not sure this sector map means anything.

VIX fell -0.29 to 10.18.

TLT fell -0.09%, retreating somewhat after yesterday’s big move. Forecaster dropped -0.10 to +0.51, which is still a strong uptrend. TY also dropped, falling -0.14%. Both remain in uptrends.

JNK fell -0.08%, moving slowly lower; its actually a swing high, but not one my code recognizes because the candles are too small. JNK forecaster fell -0.14 to +0.24. It may tip over again here soon. FWIW, I finally sold my junky oil driller bond.

CRB rose +0.82%, making a new multi-month closing high. 4 of 5 sectors rose, led once more by industrial metals (+0.94%). Commodities have done really well, up 9 days out of the last 10 days. It feels like traders really are setting up for a rotation into the commodity sector – which bodes well for PM, since it tends to follow along.

Not much else to say – PM uptrend remains in place, and until that changes, stay the course. We appear to have a broad-based commodity rally going on, with money pouring into the sector hand over fist. Miners are looking a bit iffy these past few days, but they will come around if the metals continue to move higher.

The falling buck does its part too, and right now the pace of the decline is increasing, rather than slowing down.

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