PM Daily Market Commentary – 7/26/2017
Gold rose +10.60 to 1266.70 on very heavy volume, while silver climbed +0.16 to 16.64 on moderate volume. A surprisingly dovish Fed statement drove the buck down -0.39 making a new low, which helped PM to rally. From the perspective of the Euro which rose +0.76%, gold’s move was just a currency effect.
The Fed provided few clues as to when the balance sheet reductions would start; “relatively soon” is all they gave us. Some commentators interpreted that to mean that reductions would start at the September meeting – mainly because there was a press conference.
All of gold’s move came immediately after the FOMC announcement at 2pm. The Euro spiked higher, and gold moved right along with it. Gold made a new high, which invalidates yesterday’s swing high. Candle print was a long white candle which the code says has a 30% chance of marking a top here. The gold forecaster rose +0.20 points, now reading +0.61. The sense I have from looking at the chart is that while the uptrend remains in place, momentum seems to be slowing down.
Open interest at COMEX for GC fell -9,793 contracts.
Rate rise chances (Dec 2017) remains at 47%.
Silver followed gold’s track, jumping higher immediately after the FOMC statement was released. Silver also made a new high. Candle print for silver was a spinning top, which the code felt was probably a continuation of the uptrend. Silver forecaster jumped +0.21 to +0.47.
Open interest at COMEX for SI rose +1,720 contracts.
The gold/silver ratio fell -0.10 to 76.15. That’s bullish.
Miners jumped higher, with GDX up +2.56% on heavy volume, while GDXJ climbed +3.74% on moderately heavy volume. Both miners made new highs. The candle code thought the long white candle for GDX might be a high – a 43% chance, while GDXJ’s swing low was bullish. The GDX forecaster jumped up +0.59 pulling the miner ETF back into bullish territory. GDX is now back above all 3 moving averages. Juniors are lagging a bit, with GDXJ above the 50 and the 9, but remaining below the 200. Senior miners appear to have shaken off the selling pressure that has dogged them over the past few weeks. However, this could be a one-day affair; we’ll have to see.
The GDXJ:GDX ratio rose, as did the GDX:$GOLD ratio. That’s bullish.
Platinum rose +0.45%, palladium climbed +1.08%, and copper rose +0.84%. All the metals did well, but only platinum rallied off the FOMC announcement. The other two metals rallied for their own reasons. Copper made a new multi-year high today.
As mentioned, the buck fell -0.39 [-0.42%] to 93.43, making a new low. The move in the buck came entirely as a result of the FOMC statement, with the buck plunging right after release. This was all about the Euro today, which rallied +0.76% to a new multi-year high at 117.36. The buck printed a long black candle, which the code felt had a 47% chance of marking a low. The dollar forecaster fell just -0.08 to read -0.54; that’s a relatively mild reaction. The buck still seems to be trying to put in a low.
Crude moved up slightly, rising +0.17 to 48.72. The candle print was a high wave, which the code felt might be a top (42% chance). Given the move down in the buck, crude probably should have done better. The crude forecaster jumped +0.38 to +0.83, which looks quite bullish.
SPX rose +0.70 to 2477.83, printing a short black candle which the code gives a 37% chance of marking a top. Utilities did best (XLU:+0.95%) while financials did worst (XLF:-0.67%). Utilities made most of their gains following the FOMC statement, while the banks started selling off well before the announcement.
VIX rose +0.17 to 9.68.
TLT rose +0.16%, managing to claw back higher following the 2pm announcement. The candle print was a thrusting candle pattern, which the code felt was probably a continuation – downtrend remains intact. The forecaster concurs, dropping -0.10 to read -0.58.
JNK rose +0.13%, which is a breakout above the previous high set back in May. JNK has done nothing but rally for the past 3 weeks. Risk on.
CRB rose +1.01%, managing to make a new closing high for this uptrend. Thats a bullish sign for CRB. While 4 of 5 sectors rallied, the move today was mostly about energy, which was up +1.52%.
FOMC did not disappoint as a market-mover today; the currency markets moved strongly following the announcement, and that was the primary driver for moves in PM.
When viewed from the USD perspective, the metals did well; silver led gold, and miners led the metals. That’s what we want to see in a renewed uptrend for gold. However when viewed in Euros, gold ended the day largely unchanged. This tells us that gold is not rallying in all currencies, which means that the buyers in Europe remain on the sidelines. That suggests as soon as the buck stops dropping, gold’s uptrend will end.
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So far, kind of looks like it after the first 30 minutes of trading. Silver is up a little, but as expected, no follow through with the miners and gold is pretty much neutral. Probably get a sell off later.
Added to my DSLV position. I didn't think we would see $16.70s during market hours yesterday… What a treat.
Good call! This stuff is so easy sometimes. Waterfall collapse across the board.
Euro might have topped out today at 117.76. It appears to be unwinding the move from yesterday's FOMC meeting. This in turn is causing an unwind of gold's rally yesterday.
lately, platinum has been falling against gold and also against palladium, it is at or near the point of multi-decade lows.
usually an ounce of platinum buys 2 or 3 ounces of palladium, but now they are close to parity:
platinum is also cheap right now relative to gold. typically an ounce of platinum buys about 1.3 ounces of gold, but right now it's 0.8 (cheaper than gold) – an unusual situation.
platinum seems a very good buy right now, rarely this cheap, so i went and bought some last week, i found a deal from bay precious metals, seven 1oz canadian platinum maple leafs just under $1000 a piece.
not long after they were shipped out, i received an odd email from bay precious metals, saying:
Bay Precious Metals appreciates you as a customer and would like to thank you for your business. As we continue to grow together we are obligated under the United States Patriot Act to do a background check on all our customers. We have attached a copy of our customer application which you would need to complete in order to continue to do business together.
Again we appreciate your business. Thank you for your time.
AML Compliance Department
the included form asked for things like name, address, phone #, date of birth, and a copy of a "government-issued ID"
anyone else ever receive something like this?
i've bought from bay precious metals and other dealers before, never seen this before. and this was under $10k … $10k being the magical number the geniuses in government have come up with that triggers other AML nonsense in banking situations.
my reply to them:
i have no need to fill out this paperwork, and i don't support unconstitutional and unwarranted government spying on its citizens, which is a violation of the 4th amendment.
i have no doubt that my reply through gmail was parsed by the NSA's intercept at google and i was red-flagged by the NSA as a potential anti government extremist for mentioning the 4th amendment in the email.
i have no doubt that my citizenship ranking went down another notch.
china has a "social credit" system in place by which people are ranked by the government, and this ranking will affect things like getting a loan or an apartment, getting into college, etc.
it sounds monstrous, and it is, but it exists:
the feds here in the usa do it, too, just not as openly.
remember kids, don't say anything critical of government, or it will go down on your permanent record.