PM Daily Market Commentary – 3/26/2019
Gold fell -6.39 [-0.48%] to 1321.38 on +8.63 [+0.65%] to 1327.77 on extremely heavy volume, while silver fell -0.12 [-0.74%] to 15.43 on moderate volume. Crude moved higher [+1.57%] along with SPX [+0.55%], as did the buck [+0.16%], while the 10-year rate inched lower [-0.6 bp].
Gold’s drop came in Asia and London, bottoming out around 8 am; it bounced back, but not all that strongly during the US session. Gold’s moves were not aligned with today’s currency moves. The bearish harami candle print was actually a bullish continuation, but forecaster dropped, remaining in an uptrend, but a weakened one. Gold remains in an uptrend in all 3 timeframes. I think the recent very strong volume in gold visible both today, as well as over the past week, may have something to do with the contract roll, which took place after market close.
COMEX GC open interest fell -10,924 contracts today.
Futures are showing a 6% chance of a rate cut in May, and a 67% chance of one rate-cut by December and a 25% chance of 2 rate cuts. That’s slightly reduced from yesterday.
Silver tracked along with gold today but it bottomed a bit later – around 10:30 am – and the bounce was pretty feeble. The bearish harami was a bullish continuation, but forecaster fell fairly sharply, issuing a sell signal for silver. Today’s drop was enough to cause the monthly to issue a sell signal also. This puts silver in a downtrend in both the daily and monthly timeframes.
COMEX SI open interest rose +1,156 contracts.
The gold/silver ratio rose +0.19 to 85.42. That’s somewhat bearish.
Miners gapped down at the open, but then rallied for the rest of the day, closing at the highs; GDX rose +0.39% on moderate volume, while GDXJ fell -0.03% on moderately light volume. XAU climbed +0.50% making a new high; the closing white marubozu was a bullish continuation, and forecaster was unchanged, remaining in a strong uptrend. XAU appears as though it might be heading towards a breakout. XAU remains in an uptrend in all 3 timeframes. Given the decline in gold was fairly sharp, the move by the miners today looks that much stronger. Imagine – a new high for the miners when gold drops $6.
The GDX:gold ratio rose +0.87%, and the GDXJ:GDX ratio fell -0.42%. That’s somewhat bullish
Platinum rose +0.03%, palladium fell -1.94%, while copper moved up +0.17%. Both copper and palladium appear to be heading lower, while platinum is still undecided.
The buck moved up +0.15 [+0.16%] to 96.15. The long white candle was a bullish continuation, and forecaster rose sharply, moving higher into an uptrend. The buck remains in an uptrend in all 3 timeframes.
Strong currency moves included: EUR [-0.42%], JPY [-0.60%].
Crude rose +0.93 [+1.57%] to 60.17. Crude rallied for much of the day, topping out at about 10 am in New York. The opening white marubozu was a strong-looking swing low (62% bullish), and forecaster jumped higher, issuing a buy signal for crude. Crude is back in an uptrend in all 3 timeframes. Every dip is being bought in crude right now. The uptrend remains quite strong.
SPX climbed +20.10 [+0.72%] to 2818.46. Perhaps half of today’s move took place in the futures markets overnight. Today’s swing low was not a bullish reversal (it looked quite weak), but forecaster moved higher, resulting in a daily buy signal for SPX. SPX is back in an uptrend in all 3 timeframes.
Sector map had energy doing best (XLE:+1.44%) along with financials (XLF:+1.19%), while consumer discretionary trailed (+0.43%). This sector map was relatively bullish.
VIX fell -1.65 to 14.68.
TLT fell -0.07%, a minor move especially given the rally in equities. Forecaster fell, but remains in an uptrend. TY also dropped, losing -0.13%. TY’s spinning top candle was unrated, and forecaster moved lower, but remains in a strong uptrend. TY remains in an uptrend in all 3 timeframes. The 10-year treasury yield fell -0.6 to 2.41%.
JNK moved up +0.20%; the shooting star candle was a bullish continuation, and forecaster moved slightly higher, issuing a tentative buy signal for JNK. JNK’s current trend appears to be heading lower, but it is not descending in a straight line.
CRB rose +0.50%, with 2 of 5 sectors rising, led by energy (+1.15%). CRB is in a fairly steady uptrend at this point – it is more or less being led by oil prices, which have been moving slowly higher since the lows at the end of 2018.
Once again the miners came away looking strong, silver looks relatively weak, with gold somewhere in the middle. Crude’s rally seems to be helping SPX – at least to some degree anyway – and bonds cling to an uptrend even on what appear to be risk-on days.
As long as crude continues to rally – and currently there seems to be nothing stopping it – it is likely that SPX will avoid any major damage. That’s my sense.
In the meantime, we could see a breakout in the miners within the next few days to a week. All the dips right now are being bought. While bonds are the mainstream safe haven, gold and especially the miners are also receiving inflows, with the large-cap miners receiving more attention.
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