PM Daily Market Commentary – 3/5/2015
Gold fell -2.80 to 1197.50 on moderate volume, while silver dropped -0.01 to 16.20 on light volume. The recent intraday pattern is for PM to rally in asia, and then sell off later on in the trading day – and today gold and silver followed that pattern. Gold printed a shooting star doji, showing yet another failed rally.
Overall gold is forming a descending triangle, slowly moving closer to 1190 support.
Miners stabilized today, with GDX rising +0.20% on very light volume, while GDXJ moved up +0.04% on very light volume as well. Perhaps – those traders who wanted to bail out of mining shares are all done selling? At the same time, nobody is stepping up to buy. Alternatively, the sellers could be waiting for a bounce. We'd need a close above 20.50 to mark a low, and with gold dropping and the current low trading volume in GDX, I'm not sure how likely that is.
The USD continued its strong rally, moving up +0.42 to 96.40, another closing high. That's because the Euro made another low, down -0.51 to 110.31. The rising dollar is making things difficult for gold and for the rest of the commodity index.
Gold in Euros continues looking good; it looks like gold had a decent "buy-the-dip" moment a few weeks back as gold dropped to the 50 MA and found support.
US equities (SPX) traded in a narrow range today, closing up +2.51 to 2104.22. VIX dropped -0.19.
Long bond ETF TLT dropped -0.13%. It did not benefit from the rising dollar.
The CRB (commodity index) dropped -0.48%, continuing to consolidate sideways as it has for the past two weeks. The drop in commodity prices was approximately equivalent to the rise in the buck – i.e. it was probably just a currency effect.
WTIC sold off today, dropping -0.63 to 50.97, but it still remains above its 50 MA, which is marginally bullish territory.
To summarize – existing trends all remain in place. The one current curiosity is that the rising dollar does not seem to be helping US asset prices any longer.
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Euro has fallen offf a small cliff today, down -0.94 to 109.31 (pushing the buck up +0.52 to 96.92) and hammering gold down to 1194. Gold is doing pretty well, considering the strength in the dollar – but I'm not sure how long it will last if the buck keeps climbing. So far gold has remained above support at 1190.
Silver has not been quite so lucky: it is hovering at 15.99…
An unexpectedly positive nonfarm payrolls report (unemployment rate: 5.5%, would you believe it?) drove the buck screaming higher, hitting a high of 97.45: the buck up more than +1.07 on the day. Euro hit 108.75, down -1.50.
Gold was hammered, breaking 1190 support to a new low: 1182. I'm not convinced that will even hold.
Gold needs to stay above the previous low of 1167.30 in order to keep our fading hopes of a "gold uptrend" alive.