PM Daily Market Commentary – 4/26/2018
Gold fell -6.60 [-0.50%] to 1317.80 on moderate volume, while silver dropped -0.05 [-0.30%] to 16.48 on very heavy volume. The buck rallied again today, up +0.45%; most of the move happened immediately following ECB Chairman Draghi’s press conference. Did he say anything important? “No change in policy”, which, compared to the steady rate increases by the Fed, generally leads to a weaker EUR/stronger USD.
Gold’s move was entirely driven by the plunge in the Euro, starting its drop at 9:45 and making a new low at about 12 noon. The long black candle was a bearish continuation, and gold forecaster dropped -0.30 to -0.39. Gold’s downtrend continues.
COMEX GC open interest fell 5,708 contracts.
Rate rise chances (June 2018) rose to 93%.
Silver dropped along with the falling Euro, but it was not as heavily affected as gold, and rebounded more rapidly from the plunge. Silver’s short black candle was a bearish continuation, but the silver forecaster jumped +0.24 to +0.06, which is a buy signal for silver. Silver is below all 3 moving averages, which is bearish, and remains in a downtrend in both weekly and monthly timeframes.
COMEX SI open interest fell by 6,472 contracts today. That’s another big drop – about 1006 tons of paper silver (or 14 days of actual global silver production), gone. I still can’t help thinking that silver is setting up for a big move higher. All this short-covering on silver’s move down seems bullish to me.
The gold/silver ratio fell -0.16 to 79.99. That’s bullish.
Miners rose today, with GDX up +0.40% on moderate volume, while GDXJ climbed +0.55% on moderate volume also. Really, not much happened today in the mining shares. XAU forecaster moved up +0.06 to -0.14; XAU remains in a downtrend.
The GDXJ:GDX ratio rose, as did the GDX:$GOLD ratio. That’s bullish.
Platinum fell -0.38%, palladium rose +0.69%, while copper climbed +0.37%. Copper remains in an uptrend, palladium printed a swing low (41% bullish reversal), while platinum made a new low and remains in a strong downtrend.
The dollar rose +0.41 [+0.45%] to 91.21, following through off yesterday’s strong breakout. The buck’s move came during Dragi’s press conference where he reported he wasn’t going to change anything. With Euro rates remaining at 0% while the Fed continues to raise rates, the interest rate differential between the Euro and USD continues to widen, which leads to capital flows from Europe to the US. DX is in an uptrend in all 3 timeframes.
Crude edged up +0.15 [+0.22%] to 68.16. While the short white candle was neutral, CL forecaster jumped +0.39 to +0.21, which is a buy signal for crude. Really, not much happened today. In spite of the buy signal, crude’s momentum does seem to have slowed – crude is encountering resistance at 68-69.
SPX rose +27.54 [+1.04%] to 2666.94. Candle print today was a swing low (51% bullish reversal), and forecaster jumped +0.57 to -0.28; that’s still a downtrend, but not for much longer at this rate. Tech led (XLK:+1.82%) while industrials trailed (XLI:-0.37%). It is earnings season, and there were lots of reports today; FB topped estimates and jumped 9%; selling 2 billion people’s innermost hopes and fears turns out to be ultra profitable. Who would have guessed?
VIX fell -1.60 to 16.24.
TLT also rallied strongly, up +0.70%, printing a swing low (50% bullish reversal). TY confirmed, rising +0.28% and also printing a swing low (52% reversal). TY forecaster jumped +0.14 to -0.47; in spite of the swing low, TY remains in a downtrend. Looks like some of that money flowing into the buck is ending up in bonds. The 10-year treasury ended the day at 2.99%.
JNK rose +0.34%, also printing a swing low (52% bullish reversal), and forecaster rose +0.41 to -0.39. That’s halfway to a buy signal.
CRB rose +0.26%, but only 2 of 5 sectors rose, led by energy (+0.65%). CRB remains near its recent highs.
The breakout of the dollar is continuing to run the show in PM. It will be very hard for gold and silver to climb as long as the dollar continues its move higher.
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