PM Daily Market Commentary – 8/23/2017
Gold rose +5.90 to 1296.30 on moderately heavy volume, while silver climbed +0.10 to 17.09 on heavy volume. A plunge in the buck [-0.39] accounted for most of the move in gold and silver; gold-in-Euros actually inched lower on the day.
Gold rallied during the London session, running into a lot of resistance around 1296; there was lots of volume and not much upwards progress on the intraday chart from 7am-11am Eastern. Even so, gold managed to close quite near its day high. Candle print was a closing white marubozu which the code had no comment on. Forecaster jumped +0.18 to read a mildly bullish +0.25. Gold appears to be riding its 9 EMA steadily higher, but gold in Euros has been slowly declining from a high that was marked 4 trading days ago. The forecaster has also printed a number of lower highs – the uptrend seems to be fading.
COMEX GC open interest rose +8,286 contracts. It looked like a lot of new shorts today in gold.
Rate rise chances (Dec 2017) fell to 40%.
Silver managed to close above the 200 MA today by two cents; while that’s good news, I’d like to see a more convincing close before I get too excited. Silver’s forecaster moved up +0.13 which pulled the rating up to +0.12; barely bullish. That matches well with silver’s recent sideways chop. No direction right now for silver.
Open interest in COMEX SI contracts rose +6,020 contracts. Someone went heavily short today.
The gold/silver ratio fell -0.12 to 75.50. That’s slightly bullish.
The miners moved higher, with GDX up +0.74% on moderately light volume while GDXJ climbed +0.84% on very light volume. Both ETFs printed spinning top candles which were continuations. Both ETFs remain above their respective 9 EMA lines, and while both forecasters are in an uptrend, its a very mild one.
The GDXJ:GDX ratio rose slightly, as did the GDX:$GOLD ratio. That’s bullish.
Platinum inched up +0.06%, palladium climbed +0.47%, while copper dropped -0.13%. It was a relatively quiet day for the other metals; copper remains quite near its multi-year high at 3.01, as does palladium at 936.40.
The buck plunged -0.39 (-0.42%) to 92.93, dropping back below its 9 EMA once more. The candle print wasn’t specifically bearish, and the forecaster remained even at -0.17; the buck appears to be chopping sideways here just below 93 – not rallying, but not really dropping either.
Crude rallied +0.74 [+1.55%] to 48.37, with most of the move coming after a relatively bullish-looking EIA report (crude draw: -3.3m barrels, gas draw: -1.2m barrels). The rally was enough to pull crude back above its 9 EMA, and the forecaster rose +0.12 to a somewhat-bullish +0.32. It is hard to know if crude is back in an uptrend. Possibly.
There was an article on oilprice.com that talked about how China demand was an important driver for prices; it tells how China is constructing its own SPR. It occurs to me that China is buying oil right now hand over fist while prices are cheap, while the US congress is selling oil from our SPR at more or less the same time. http://oilprice.com/Energy/Energy-General/Forget-OPEC-China-Controls-Oil-Prices.html
SPX fell -8.47 to 2444.04, with all the losses coming in the futures markets overnight. Candle print was a bearish harami, which the code felt was actually just a (bullish) continuation following yesterday’s swing low. Energy did best (XLE:+0.43%), while industrials led the market lower (XLI:-0.94%). Today’s sector map looked like a bear market move.
VIX moved up +0.90 to 12.25.
TLT charged up +0.68%, making a new multi-month high. TLT remains in a slow but steady uptrend, above all 3 moving averages. The forecaster looks a bit weak at +0.26, but it has remained mostly above 0 for the past 4 weeks. That’s risk off.
JNK fell -0.05%, moving gently lower after yesterday’s strong rally. JNK remains above its 9 EMA, but it is also in a downtrend – well below its 50 MA. No risk signal from JNK today.
CRB rose +0.48%, with 3 of 5 groups rising, led by energy. CRB is still struggling to recover – it remains in a longer term downtrend, well below the 200 MA.
It was a relatively quiet day today; PM direction is still mostly sideways, once you eliminate the currency effects. I get the sense from the OI numbers that there is a lot of shorting going on. That makes me a little nervous. The one bit of clearly positive news is the new high for TLT – the strong correlation with gold remains, and as long as TLT remains in an uptrend, that should help pull gold prices higher.
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