Investing in precious metals 101

PM Daily Market Commentary – 3/20/2017

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  • Tue, Mar 21, 2017 - 04:05am



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    PM Daily Market Commentary – 3/20/2017


Gold rose +5.10 to 1234.00 on very light volume, while silver moved up +0.02 to 17.43 on very light volume also. Trading ranges were narrow and volume was light; it was a positive but not very eventful day.

Gold rallied in Asia, dipped in London, and then rose in the US into the close. Print was a “closing white marubozu/NR7” – a narrow trading range day where prices closed at the high. Candle code sees this as mildly bullish.  The volume has been declining as price has risen over the past few days; that’s generally a bearish sign.

Open interest at COMEX for GC rose +2,195 contracts.

Rate rise chances (June 2017) are currently at 50%.

Silver followed gold’s track for the most part, except that it didn’t rally into the close as well. Candle print was a doji/spinning top/NR7 – like gold, a narrow trading range.  Candle code thinks that’s somewhat bearish.  The low volume is also bearish.

The gold/silver ratio rose +0.19 to 70.78.

Miners did better than the metal, with GDX up +1.10% on moderately light volume, while GDXJ rose +2.21% on moderate volume. For most of the day the miners languished, but they had a very nice run into the close, with most of the day’s gains happening in the last 30 minutes of trading. GDX printed a “closing white marubozu” which the candle code finds somewhat bullish. GDXJ printed a bullish harami, which the code finds quite bullish.

Platinum rose +0.60%, palladium climbed +0.60%, while copper fell -1.37%. Copper’s plunge takes it below the 50 MA, and the “closing black marubozu” print looks quite bearish to the code; 64% chance of marking a top. Copper is in a downtrend right now, and today’s print suggests it may well remain in one for a while longer.

The buck fell but then bounced back, ultimately closing up +0.12 to 100.23. Candle print was a hammer candle, which the code felt was somewhat bullish; 30% chance of marking a low here. We really need confirmation tomorrow to give us any confidence of a reversal. I have been expecting the buck to bounce off round number 100.

Crude fell -0.28 to 48.87; crude plunged relatively briskly in Asia and London, making its low 30 minutes before the US market opened, bouncing back to recover at least some of its losses. Candle print was a spinning top, which was mildly bullish, but also a confirmed bearish NR7, which was more seriously bearish. Let’s say we’re leaning bearish going into tomorrow.  The API report is out after market close tomorrow; crude oil bulls want that to be a bullish inventory draw, otherwise, we probably see another leg down for crude.

SPX fell -4.78 to 2373.47. Equities have been moving slowly lower for the past three days, but the emphasis is on the word “slowly” rather than on the word “lower”. Financials led the market down (XLF:-0.74%) while materials actually did best (XLB:+0.54%). XLF is starting to look genuinely ill at this point; today’s loss took XLF below 24.50 support. It looks as though the “Trump rally” in bank stocks may be over. A contributing factor was DB’s equity raise which caused DB to fall -3.42%. DB is just about to print a second lower low – it is well into a downtrend right now.

VIX rose +0.06 to 11.34.

TLT rose +0.43%, rising for 4 of the last 5 days. Maybe its just the weak equity market, or maybe traders think bonds are cheap with the 20 year yielding 2.83%. The chart of TLT is now starting to look mildly promising. Next stop: a close above the 50 MA.

JNK fell -0.10%, dropping along with equities for the past 3 days. JNK is gently signaling risk off.

CRB rallied slightly, moving up +0.16%; at this point CRB is pretty much treading water, but it did manage to squeak back above its 9 EMA just today.

Not much happened today; PM inched higher, bonds are looking better, financials are weakening, the buck might be thinking about making a low at round number 100, oil is unsure if it wants to rally, but there were no strong moves for anything.

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  • Tue, Mar 21, 2017 - 03:32pm



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    about those bank stocks

XLF down -2%, BKX down -2.81%, and DB off -6.69%.  If you'd wanted to go short, you had plenty of time to do so yesterday.

Now its probably not the best entry point…but they sure do look ugly today.

The tell was the break of support yesterday.

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