PM Daily Market Commentary – 7/2/2014
Gold closed up +1.00 to 1328 on moderately heavy volume; silver was up +0.13 to 21.20 on moderately heavy volume also. Gold tracked sideways for most of the day, while silver was hit at 0815 by the unexpectedly positive ADP payrolls report. Silver soon rallied, and ended up hitting a new cycle high of 21.33; it faded a bit into the close but still had a pretty good day.
Looks like that correction will have to wait.
The buck definitely seems to have put in the low yesterday – the buck closed up +0.14 to 79.98. If it really has reversed course and continues higher, it should cause some amount of trouble for PM.
Mining shares were up today, with GDX up +0.91% on heavy volume, and GDXJ up +0.58% also on heavy volume. GDX rallied strongly until mid-day hitting a new cycle high, but faded in the last few minutes of the trading day. GDXJ behaved similarly, but its end-of-day fade was more dramatic, dropping perhaps 1.5% in the last five minutes. It was an unfortunate end to a reasonably good day.
The SPX traded sideways in a narrow range today with low volume, closing up +1 to 1975. Perhaps many traders have already left for the July 4th holiday. It is summer time, after all.
The bond traders were still on the job however; bonds were slammed hard today, off -1.07%. US long bonds did not like that ADP payrolls report, and were hit hard at 0815 EDT. TLT is now through its 50 MA and if we pull back to the weekly chart, bonds definitely seem to be rolling over. The 20 year rate is now up to 3.20%.
Brent crude was down hard today, losing -1.05 on high volume, closing at 111.24. There was some good news out of Libya – a rebel faction that had been blockading two oil terminals for the past year reached a political settlement with the government to reopen the terminal and allow oil exports. Good news for production is bad news for price.
Copper made a huge gain today, up 6 cents to 3.25. Looks like that whole situation in China has been cleared up – at least from copper's point of view it has been.
The "improving economy/rising inflation" story seems to be more or less hanging together, from what prices seem to be telling me. We have a nonfarm payrolls report tomorrow. It usually moves the markets – let's see what direction things take.