PM Daily Market Commentary – 3/6/2017
Gold plunged -9.40 to 1225.50 on light volume, while silver dropped -0.19 to 17.80 on light volume also. No buyers showed up for gold today; the buck wasn’t particularly strong – just nobody was interested in buying gold, at least not at COMEX.
Gold fell slowly and steadily starting in Asia, and the decline accelerated after 08:30 in New York. Gold closed right at the lows of the day. Candle print was a closing black marubozu, which the code thinks is bearish. The volume was quite light, which suggests that the selling wasn’t all that intense. Gold somehow avoided making a new low, which is about the most positive thing that happened for gold today.
Open interest at COMEX for GC rose 4,402 contracts.
Rate rise chances (March 2017) jumped to 86%.
Silver sold off along with gold, falling in Asia, with the decline accelerating after 08:30 in the US. Silver did not close at its lows; it bounced slightly printed an “opening black marubozu” which the code thinks is more bearish than bullish. The gold/silver ratio rose +0.20 to 68.83, which is mildly bearish. Over the past two days, we see that the 200 MA has acted as resistance. Silver need a close above the 200 to get its mojo back again.
Miners sold off hard for the first half of the day, bounced somewhat, and then moved sideways into the close. GDX was off -2.52% on moderately heavy volume, while GDXJ dropped -5.94% on very heavy volume. Both miner ETFs made new lows. Candle print was an “opening black marubozu”, which the code feels is a little bit bullish – a 20% chance of marking a low here. Still, that’s probably not the low. Momentum does seem to be slowing a bit, but so far, no bottom.
Platinum fell -2.02%, palladium dropped -0.12%, and copper lost -1.90%. It was a fairly unpleasant day for the metals. Copper appears to have printed a lower low, which is the sign of a downtrend. It remains above the 50 MA, but not by much. If copper starts correcting more seriously, it could be a more general signal for a global economic downtrend.
The buck rose slowly for much of the day, breaking down once to test the 50 MA before ending the day up +0.09 to 101.53. The candle code felt the “spinning top” was fairly bullish: a 47% chance of marking the low here. That’s unusually good for a spinning top. This could be an artifact of the market’s increasing certainty of a rate rise coming next week.
Crude rose +0.06 to 53.30, first dropping to 52.75, then trying to rally to 53.50, and ultimately falling into the close. “Going nowhere” usually ends up with a doji print – and today we see a “northern doji” which the code felt was bearish. API report is out tomorrow after market close.
SPX fell, dropping -7.81 to 2375.31. All of the loss in SPX came at the (gap-down) open; the market then just traded sideways in a narrow range for the rest of the day. Candle print was a “southern doji”, which the candle code felt was bullish. Financials led the market lower (XLF:-0.76%) while energy did best (XLE:+0.22%). VIX rose +0.28 to 11.24.
TLT fell -0.48%, right at the bottom of its 118-122 trading range. Bonds don’t like the prospect of higher rates.
JNK plunged -0.43%; selling in junk debt is starting to accelerate. JNK is starting to hint at risk off.
CRB fell -0.16%, attempting to rally but ultimately failing. 4 of 5 groups fell, led by industrial metals. Probably, that’s about copper’s big move lower today. Commodities have been slowly falling since the high set back in mid-January.
Looking just at the technicals, GDX:$GOLD ratio continues to fall, as does GDXJ:GDX. Miners are leading the metal lower, and the gold/silver ratio continues to rise. There have been no swing lows. Everything is well below the 9 EMA lines. As long as these things remain in place, we’re in a downtrend. We have no early indications from the candle patterns that a low might be near.
From the macro view, we have another 8 days before the FOMC meeting occurs. I would think that the miners & the PM complex overall would bottom out prior to the FOMC meeting, but that’s just guesswork. Right now, the downtrend seems to be all about the plummeting mining shares, and much less about gold itself, which is actually holding up fairly well.
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It started earlier today. Nice! Should see gold under $1200 and silver under $17 soon. Hopefully, they're being washed out before next Wednesday. All the up move will have been erased, allowing a move back to recent highs (assuming there are any actual fireworks next week), followed by another slam after that. Oh well…we'll just buy more on the cheap, I guess.