PM Daily Market Commentary – 2/12/2014
Gold closed up +0.50 to 1291.60 on light volume, and silver closed flat, remaining at 20.22 on very heavy volume. The gold/silver ratio rose +0.01 to 63.88. Gold traded in a relatively narrow range, making a new high to 1296 but then retreating back to flat at the close. Silver looked quite similar, except for the heavy trading volume, which looks worrisome. Heavy volume on a "doji" candle can signal a reversal of the current trend, which would be bearish for silver.
The USD attempted to rally and failed, closing up +0.03 [+0.03%] to 80.75. The buck is not looking strong, which should encourage gold and silver.
Recall yesterday I said I haven't seen signs of distribution. Well today, GDX sold off hard, down -3.43% on heavy volume, losing all the gains from yesterday and then some, closing back below the 200 MA. GDXJ looked similar, off -4.37% also on massive volume. Traders looked to be ringing the cash register on the decent rise in the mining shares.
Whenever I see mining shares selling off hard when PM is flat, it suggests to me that an interim peak may have been made, with a sell-off to follow. Add to this the high volume silver doji, and it leads me to believe that absent some specific gold-positive news, we may have seen the highs in PM for a time.
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