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PM Daily Market Commentary – 4/25/2018

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  • Wed, Apr 25, 2018 - 11:05pm



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    PM Daily Market Commentary – 4/25/2018

Gold fell -7.80 [-0.59%] to 1324.40 on moderate volume, and silver fell -0.18 [-1.05%] to 16.52 on very heavy volume. The buck rallied strongly today, up +0.45%, breaking out of its multi-month trading range. The metals were not happy with the dollar rally.

Gold started falling in Asia, and didn’t stop until about 8:30 am, making a new low to 1320.20. It moved slowly higher during the US session, recovering about $4. The long black candle was a bearish continuation, but the forecaster actually rose +0.06 to -0.08, suggesting that today’s move was actually slightly bullish. Certainly given the drop in the buck, the move lower in gold wasn’t all that severe. Gold remains in a downtrend in both weekly and monthly timeframes.

COMEX GC open interest rose 5,031 contracts.

Rate rise chances (June 2018) fell to 89%.

Silver mostly tracked gold, falling from the open in Asia to about 8:30 am making a new low to 16.47, after which it mostly chopped sideways for the remainder of the day. The opening black marubozu was a bearish continuation, but the silver forecaster moved up +0.24 to -0.17, suggesting that the downtrend momentum is slowing substantially – if not quite ready to reverse. Silver is also in a downtrend in all 3 timeframes.

COMEX SI open interest fell by 3,788 contracts today. That’s a fairly large drop – about 589 tons of paper silver is now gone.

The gold/silver ratio rose 0.37 to 80.15. That’s bearish.

Miners fell today, but all of the losses came on a gap down at the open, after which the miners moved somewhat higher during the trading day. GDX fell -0.88% on moderate volume, while GDXJ dropped -1.24% on moderate volume also. XAU forecaster thought the price action was bullish, rising +0.39 to -0.22; still a downtrend, but slowing rapidly. XAU broke its uptrend line today, which is bearish.  XAU is in a downtrend in the daily & weekly timeframes, but the monthly still is in an uptrend.

The GDXJ:GDX ratio fell, as did the GDX:$GOLD ratio. That’s bearish.

Platinum was hammered, dropping -2.26%, palladium rose +0.27%, while copper fell -0.18%. While copper remains in an uptrend, and palladium appears to be trying to put in a low, platinum just cratered for some reason today – it turned in the worst performance of all the metals.

The dollar rose +0.41 [+0.45%] to 90.80, breaking above its recent trading range. The buck has risen 6 of the last 7 days. DX forecaster rose +0.02 to +0.71, which is a strong uptrend. DX is now in an uptrend in all 3 timeframes.

Crude rallied +0.29 [+0.43%] to 68.01. Today’s EIA report was a bit bearish [crude: +2.2m, gasoline +0.8m, distillates -2.6m] but the market didn’t seem to mind. There was a fair amount of volatility following the report, but crude ended up moving higher by end of day. The short white candle was a bearish continuation, and the forecaster was unchanged at -0.16, which is a slight downtrend. Still, it seems as though a bid remains for crude here even though we are in the high 60s. Crude remains above all 3 moving averages, and remains in an uptrend in the weekly and monthly timeframes.

SPX moved up +4.84 [+0.18%] to 2639.40. SPX sold off right at the open, but the plunge lasted all of 15 minutes, after which SPX slowly recovered. The high wave candle was a bearish continuation, and the forecaster fell -0.16 to -0.85; that’s a fairly brisk downtrend. The sector map had energy in the lead (XLE:+0.79%) while financials trailed (XLF:-0.07%).  I’m not sure we can pull any trend information out of today’s sector map.

VIX fell -0.18 to 17.84.

TLT plunged -0.67%, making a new low, falling for the 6th straight day. TY confirmed, dropping -0.15%, making a new multi-year low. TY forecaster did edge up +0.04 to -0.57; perhaps the pace of the plunge is slowing down. The 10-year treasury broke 3% today, ending the day at 3.02%. Supposedly, the trader line-o-death for the 10-year yield is 3.05%, not 3%, since that was the previous high back in 2014.  Right now, the downtrend in bonds looks relentless.

JNK fell -0.14%, continuing to move lower for the 6th straight day, similar to TLT. The pace of the drop isn’t all that dramatic, however, so it is not as though junk debt is predicting anything dire. Junk is just slowly moving lower.

CRB rose +0.61%, with 4 of 5 sectors rising, led by agriculture (+1.33%). CRB appears to have found support at 200.

The 10-year broke the 3% mark today, but the world didn’t end – at least not just yet anyway. The move down in bonds hasn’t become disorderly.  Yet.

The buck finally broke out of its multi-month trading range.  Can it sustain the move higher?  If so, then we will probably see a steady move lower in gold and silver.  Gold in Euros is more or less moving sideways, so if the buck rises, gold in USD will fall.

The miners are doing surprisingly well given this situation; they still seem to be relatively well bid even though the buck has clearly broken out.

Crude really stands out as the most bullish item on the list of things I track. The crude rally is finally resulting in some fairly significant moves in the some of the shale drillers.  One driller I track (BTE: Baytex Energy) is up about 60% over the past month; another (OAS: Oasis Petroleum) is up 30%.  It looks as though the buyers have returned to fish some of these equities out of the almost-dead pile.

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