PM Daily Market Commentary – 2/20/2014
Gold closed up +11.90 on moderately heavy volume, while silver was up +0.28 on heavy volume. Gold recovered all it lost yesterday, while silver did not. Still, the gold/silver ratio dropped -0.25 to 60.63. Both gold and silver traded steadily higher all day long, with a brief spike lower at 0745 EST.
Gold appears to be consolidating above its 200 day MA with the 200 MA as support, looking for all the world like it is preparing for a move higher. The 1360 price level is the next resistance.
The USD rose +0.10 [+0.12%] to 80.32, continuing its bounce off 80 support. Although the dollar rose, it seemed to have no negative effect on gold at all. Eventually if the buck continues to rise, it should provide headwinds for PM, but right now it is not behaving that way.
The mining share correction appears to be over, once again after only one day. GDX closed up +4.06% on heavy volume breaking out and making a new cycle high, while GDXJ was up +6.44% on on extremely heavy volume. From my perspective this is quite bullish; the market is telling us that buyers are so desperate to get onboard, they won't let miners correct any more than about 3-4% before they come out of the woodwork. I expected a 3-4 day correction, but it doesn't seem to be happening.