evening wrap,may 11
market vibes
Trading in NY on Monday was typically subdued. Stocks held small gains, the dollar was a little higher, oil was up 2% on another stillborn offer from Iran. The white metals, led by silver, had an outstanding day. The bond market suffered another beat-down from short sellers.
Some of the backstories overlapping the weekend highlight limit down plunges in left-wing politics last week…The UK Reform Party’s slaughter of Prime Minister Starmer’s policies. On May 9, Trump told reporters he might relocate some U.S. troops being withdrawn from Germany to Poland. Alberta has enough votes to trigger a secession referendum.
The Strait of Hormuz is losing value by the hour as oil companies and oil producers in the region move towards alternative routes. The 3.5 mm bpd drop in Chinese oil imports signaled a jaw-dropping decline in Asian demand for refined products. And the stunning statement by Putin, “The [war in Ukraine] may be nearing an end,” on Victory Day. In other speeches and remarks over the weekend, Putin referred to his “Friends and Partners,” China, India and the US.
In the markets
Silver rallied 7% on “little cat feet” today, quietly leaping vertically higher on one of the lower volume days in 2026. Open interest is still near the May cycle lows. Prices closed at the highest since March 13. Shhhh. No narratives are good narratives.
In gold, prices lagged. I pointed out last Wednesday or Thursday silver was leading the PM sector. From Monday last week to the close today, the gold silver ratio has fallen 6 big handles to 54 ounces of silver to an ounce of gold. This is the lowest level for the ratio since January 29, the day before the infamous 40% crash from $119/toz to $75 in 24 hours.
What is technically encouraging in the gold chart below is the nuanced behavior in today’s DMI. If June gold trades $25 to $30 above today’s highs we’ll have a well formed bullish 1 bar false positive in daily data. Gold positioning is flat and balanced. There are no FX or economic narratives and the oil story is a tremendous dud for precious metals. That may be better information for oil than gold.
July copper had an explosive 5% rally lending a big hand to the surge in silver.
WTI rallied 2% on congested and negative technical activity today. Volume was the second lowest since February 23 (before the conflict began). Open interest on Friday fell 10K lots. The range is solidly in force. is this distribution of risk from strong hands to weak one? More on that in the vibe…
