Gold and silver ended the day with slightly better scores today but the miners continued their struggles. GDX, JNUG and NUGT all finished down for the day and the score remains at -100 for GDX. I am still leaning for a bounce here but gold has to continue higher for this to occur.
The dollar shot up with news from Europe that the ECB may lower rates again. This in turn caused the Euro to fall.
TNA has a very nice day and is up now $10 off the lows.
UGAZ broke to a lower low just north of $11 a share before turning positive for the day up 2% closing at $11.56. Thursday is when they announce the supplies and you can find the announcement here for those that want to bookmark it: http://ir.eia.gov/ngs/ngs.html
From the Trading Desk
After a wild last week for basically every market except the precious metals, the climate has calmed down substantially this week so far. The Vix volatility index has halved since it traded over 31 last Wednesday. Equities have found their footing and the Dow is on track for its third day of consecutive gains after forming a base at 16,000. There is an overall risk-on sentiment and gold continues to press higher, even bucking its normal inverse correlation to stocks and the USD. Gold has moved upwards through its 50 day moving average at $1,248.50 and the former double top at $1,250. Since the yellow metal has moved up $75 in the last two weeks, it would not be a surprise to see some profit taking though. Near term resistance is coming in at the 100 day moving average of $1,274.50 while $1,233 is current support. Silver is pressing against the higher end of its recent range and $18 is still the near term objective.
With gold in a lower trading range over the last two months, physical demand has picked up substantially. Swiss trade data released today showed September gold exports reaching 172.60 tons (5,549,090 ounces), the highest monthly outflow since February. Gold heading to China in September jumped to 12 tons which was four times the average of the previous four months. Indian exports were 58.5 tons which was the largest shipment year to date and twice the average monthly volume. Also, Russia purchased 37.33 tons of gold in September, its seventh month in a row of increasing its gold reserves.
Keep an eye out for US Core CPI m/m tomorrow and US Unemployment Claims out on Thursday.
10/22/2014 MORNING UPDATE
Gold never did follow through higher and the miners are all gapping down. CPI came in as expected but the dollar is up strongly with interest rates rising a bit. Gold needs some good news to get going. TNA gapped up to 65.29 and we might see a reversal coming through Halloween so I’d be careful. UGAZ still weak.
Tomorrow’s (Thursday’s) Unemployment Claims will be the next catalyst. Can’t see a real reason to be long anything right now.
10-21-14 GLD Chart
10-21-14 SLV Chart
10-21-14 GDX Chart
Disclosure:
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All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.
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About Doug EberhardtDoug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
Disclosure:
Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.