Daily Content
Fleck's Thoughts
IndexClose% Change
Dow Transports14333.33-1.17
Dow Utilities925.06-0.18
S&P 5004432.41-0.09
Nasdaq 10015133.110.16
Russel 20002239.95-0.35
VIX Index16.773.84
10 Year Gov't Yield1.332
Spot Gold1729.65-1.89
Spot Silver23.46-3.56
GDX-Gold Miners32.43-2.44
Crude Oil66.79-2.18
Dollar Index92.970.18
Euro Spot1.17-0.22
Japanese 10 Year0.0171.43
Shanghai SE3494.641.05
Long Bond 20-year163.53-0.4

Tumultuous Trading in Metals


The stock market was kind of a nonevent, at least compared to outside markets, with the indices plus or minus small amounts through midday. In the afternoon, nothing much happened.

As noted, away from stocks is where the action was, particularly in the land of commodities. Bonds were a little weaker and green paper was a bit higher, but those moves were inconsequential compared to what took place in the metals.

Night Moves Within about half an hour of opening last night, gold plunged around $86 to $1,678-ish while silver fell $2 to $22.30. It appeared that the selling was precipitated by a large order that, when executed at that time of night, would only have been done in that manner if the goal of the seller was to push prices lower. Who would do that, you may ask? Somebody with a big short position, which they could have initiated (or pressed) on Friday when the metals broke badly.

Obviously, someone operating in the kind of size needed to do this would have to be a rather big player. But even if we knew exactly who did it and why, it wouldn't change the fact that, after bouncing all the way back to where gold was only down about $15 shortly before the New York opening, it swooned again and lost 2% on the day. Silver followed a similar path and closed about 4% lower while the miners were roughed up, as you might imagine, although not disproportionately so, for the most part.

Gold and Silver Forks In the Road Where does this leave us? I'm probably stating the obvious when I say either this sort of action gets rejected, because we're at the end of this correction that has been going on for some time, or we're about to enter another period like we saw between January and April, where gold continually leaked until it didn't. I don't have a strong feeling as to which is more likely at this point, other than to say that, given sentiment (which is about as low as it gets) and positioning (no outsized long position in futures), it would seem unlikely for a big leg down to commence from these levels for both silver and gold. However, everything trades so bizarrely now, it's hard to hold a strong opinion about the short run.