Investing in precious metals 101

PM Daily Market Commentary – 5/17/2018

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  • Thu, May 17, 2018 - 09:42pm



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    PM Daily Market Commentary – 5/17/2018

Gold inched lower, down -0.10 [-0.01%] to 1290.00 on heavy volume, while silver rose +0.06 [+0.37%] to 16.45 on moderate volume. The buck moved up again today, this time just +0.10%, but it did make a new closing high to 93.10. No rally yet for gold, but silver is looking a bit better.

Gold chopped sideways again today, making a new low to 1284 at around 6 am before bouncing back, closing right where it opened. That resulted in another long-legged doji candle print, which was once again neutral. Forecaster liked the second doji in a row, moving up +0.40 to -0.36. That’s still not a reversal, but it does suggest there is some buy-side support down here at 1290.

COMEX GC open interest rose 2,279 contracts. Still no cash-register ringing by the commercials.

Rate rise chances (June 2018) remains at 95%.

Silver moved higher today starting roughly at 7 am, with the rally ending around 1 pm. Candle print was a swing low (43% reversal). Forecaster liked the move, rising +0.39 to -0.15. That’s still not a buy signal, but it is much improved over where we were two days ago. Silver remains in a downtrend in both the weekly and monthly timeframes, however silver continues to do substantially better than gold, and that’s a positive sign.

COMEX SI open interest fell by -576 contracts today.

The gold/silver ratio fell by -0.29 to 78.44. That’s bullish.

Miners moved lower, with GDX off -0.45% on moderately light volume, while GDXJ edged down -0.03% on very light volume. Forecaster rose +0.32 to -0.06, which is quite close to a buy signal for the miners. The 50 MA continues to provide fairly strong support.

The GDXJ:GDX ratio moved higher, while the GDX:$GOLD ratio fell. That’s neutral.

Platinum moved down -0.09%, palladium dropped -0.74%, and copper moved up +0.21%. Copper remains in a strong uptrend, platinum made a new low but the forecaster jumped strongly higher, as did the palladium forecaster.

The dollar rose +0.09 [+0.10%] to 93.10. The spinning top was bullish, and DX forecaster moved up +0.14 to +0.30. The buck continues to move higher. DX is still in an uptrend in both weekly and monthly timeframes.

Crude rose +0.07 [+0.10%] to 71.66. Crude made a new high to 72.30, but it wasn’t able to keep its gains. The doji candle was a bullish continuation; forecaster dipped -0.07 to +0.26. That’s a slow uptrend for crude.

SPX fell -2.33 [-0.09%] to 2720.13. There was a lot of back and forth movement, but SPX ended the day largely unchanged. The long-legged doji was neutral, and SPX forecaster dropped -0.09 to +0.33. SPX remains in an uptrend. Energy led (XLE:+1.51%) while utilities fell most (XLU:-0.81%). Energy equities are on a bit of a tear right now.

VIX rose +0.01 to 13.43.

TLT fell again, losing -0.51%, making a new low that dates back to June 2015. TY edged lower, losing -0.03%, making a new low also. 10-year treasury yield closed at 3.11%. Bonds continue to fall, although momentum appears to have slowed. TY forecaster remains very bearish at -0.90.

JNK was unchanged. JNK is in a slight downtrend.

CRB fell -0.10%, with 2 of 5 sectors moving lower, led by agriculture (-0.22%). It was another relatively boring day in the commodity complex.

Silver is once again outperforming gold.  The gold/silver ratio actually topped out back in early April, and it has been moving lower in fits and starts since then.  Is that poor gold performance, or improving silver performance?  Looking at the charts – silver has been chopping sideways, while gold has plunged.

Looking at the metals as a group, it appears as though it all might be ready to reverse.  I suspect that will depend on what the buck does next.  Gold is lagging the rest of the group.

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