PM Daily Market Commentary | Gold, GDX, SPX & More

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Gold fell -4.70 to 1143.80 on moderately heavy volume, while silver dropped -0.12 to 14.94 on moderately light volume.  Once again, a strong dollar is giving gold heartburn.

Gold made a new low today at exactly 08:30 EDT, at the time of the jobless claims report.  The report didn’t look that interesting to me, but it appeared to cause gold to spike down and the dollar to start rallying.  Gold’s violation of the prior low at 1141.60 is a bad sign, and suggests we will probably test 1130 in the not too distant future.

Silver continued dropping too, appearing as though it is destined to re-test the 14.62 low it made on Monday of last week.  Silver downtrend remains intact.

Miners fell as well, with GDX off -0.98% on light volume, while GDXJ dropped only -0.23%, once again outperforming the seniors.  GDX is down 23% over the past eight weeks – compare that with the Shanghai composite, which is off 26% from its high.   At some point, traders will once again start to show interest in the mining shares, but its probably best to wait for some visible evidence of this happening before buying.  Low prices can always get lower.

Platinum: down -1.14%, palladium down -1.73%; both metals made new cycle lows.  Copper actually rose +0.16%.

The dollar rose +0.53 to 97.81, making another new closing high and apparently preparing to break above its previous high of 97.88.  The strong dollar is causing no end of trouble for commodities.

Gold in euros actually rose on the day.  This supports my thesis that gold’s weakness is still all about currency movements.

SPX (US equities) opened higher, and just continued rising all day long, climbing +16.89 to 2124.29.  SPX needs a close above 2130 to violate the “lower highs” downtrend now in place – that’s less than 6 points away.  From there it is not far to SPX making yet another new all time high.  US equities are looking strong at the moment – they apparently like the whole concept of a new Greek bailout.  VIX dropped -1.12 to 12.11.  That level in the VIX is usually a good buy point, but I think I’d wait until SPX showed some signs of slowing down before buying any puts.

Bond ETF TLT rallied +0.69%, climbing right alongside SPX.  Money is flowing into US assets right now – both stocks and bonds.

The CRB (commodity index) dropped again, falling -0.49%.  Most commodities I watch were down today.

WTIC (oil) fell once again, dropping -0.70 to 50.92, moving to the lower end of its recent trading range.  Oil is looking like it might break lower once again.  The shale drillers are really suffering, but then so too are the services companies.  Nobody in the industry seems to like oil down around $50/barrel.

Same story, different day.  PM continues to look weak – along with most commodities.  Strong dollar pushes commodity prices lower.  As I have said many times, if the buck continues to rise, commodities including PM will most likely continue falling.  I wish I had better news.

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Source: PM Daily Market Commentary – 7/16/2015

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