PM Daily Market Commentary – 2/27/2014
Gold tracked mostly sideways today, closing up +1.80 to 1331.70 on moderately heavy volume. Silver tested the 200 day MA today in asia trading and it held, silver rebounding to close +0.09 at 21.31 on heavy volume, printing a doji candlestick. That's a good sign. If silver finds support at its 200 MA, we might have seen the full extent of the correction. In a bull market, sometimes corrections can be sharp and short, with moving averages acting as support where the big guys step in and buy.
Still, while up-day volume was good today, down day volume from yesterday was even bigger, which is a bit of a warning sign. I'm about 50/50 on the 200 MA holding, vs a continued move lower to 20.50 support. If volume had been higher today, I'd be more positive.
The USD tried to rally and failed, closing down -0.12 [-0.15%] to 80.25. Even though Janet Yellen says that tapering will continue, the buck doesn't seem to be happy about it.
GDX was off -0.36% on light volume, while GDXJ closed flat on moderately heavy volume. Miners tried to rally early in the day but sold off in the afternoon. Miners still look a bit weak, but not horribly so. We may have more downside for the mining shares, but so far it doesn't look like a big correction is in store.
The commodity index $CCI was up +0.08%, closing almost flat on the day.
It looks like PM's path of least resistance is still down for the moment – I haven't seen any large volume test where the shorts attempted to drive the market lower, and the buyers showed up and ripped the market higher in response. Then again, the shorts may well be tentative at this point after the impressive bullish move in PM and commodities since Dec 31st.