PM Daily Market Commentary – 5/28/2015
Gold rose +1.20 to 1188.60 on moderately heavy volume, while silver was unchanged at 16.68. Unfortunately, the Euro gained +0.58% today, which says that gold's very modest rally in the US was entirely a currency effect. Gold priced in Euros actually fell.
Gold was hit early in NY, dropping down to 1180 just before 10:00 EDT, in tandem with a steady rise in the buck at that time. At the release of the Pending Home Sales Report, which was positive, the buck dropped and gold rebounded. Part of me wants to believe gold found support at 1180 – another part is concerned that gold was unable to rally even though the dollar had a bad day. If gold can mark a swing low and close above 1193 tomorrow, I'll feel more positive.
Miners did well, with GDX rallying +0.82% on light volume, while GDXJ climbed +0.90% on moderately light value. Both miner ETFs have put in a swing low, which is a positive sign indicating a possible reversal. Junior miners once again look better than the senior miners.
The buck fell today, dropping -042 to 97.06, mostly on the back of a rise in Euro of +0.58% – the Euro putting in a swing low. Has the dollar topped out for this particular move or is this just the pause that refreshes? The answer to this question will be influential in determining the near-term direction of PM and commodities.
SPX (US equities) encountered some selling in the early part of the NY session, but mostly recovered by end of day, closing down -2.69 to 2120.79. VIX rose +0.04 to 13.31.
Bond ETF TLT fell -0.24%, after rising 5 days in a row.
The CRB (commodity index) seemed encouraged by the falling buck, rising +0.33% and printing a (bullish) hammer candle. Commodity traders appear hopeful that the buck has topped out.
WTIC (west texas crude) also printed a hammer candle; first dropping to 56.51 and then rebounding to close up +0.36 to 58.01. The Petroleum Status report (one day late because of Memorial Day) released at 11:00 EDT showed a decrease of -2.8 million barrels in storage, and that seemed to help oil to rebound.
Gold still looks weak to me – it was unable to rally much on a day the buck fell. It did manage to rebound off its lows, but the daily chart of gold in Euros looks weak. Energy and the overall commodity index are looking more bullish, and that should help – gold has been outperforming CRB for the past few weeks. Will the buck top out? That's the question. A can-kicking resolution to the Greek situation would probably send the Euro screaming higher.
Hmm. Perhaps that's why the solution has been so long in coming. Who benefits from a stronger Euro? Not the German exporters, that's for sure.
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$100T, leveraged to the max.
Take home message. Too much Foresight can distort your timing. But she is going to blow.
Also of note: Fiat value is now down to 3%. (Sound about right. I remember going out on Sunday with 10c in my pocket. No, it's true!)
Egon von Greyerz-World Will Never Be Able to Cope…: http://youtu.be/y695HfzPv2g