Precious Metals News Update - 21 February 2018

Chinese New Year and US Presidents Day holidays have impacted market liquidity during the early part of this week.

The return of US investors on Tuesday saw the precious metals driven lower and in the absence of anything significant of note to canvas, I’ll let the pictures tell the tale as follows:

1. Stronger US Dollar Index as the Greenback rallied against its major pairs
   

   

+

1. Firm US 10 Year Treasury yields
   

   

   
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   +

2. Stronger US Dollar / Weaker Euro
   

   

​+

1. Stronger US Dollar / Weaker JPY
   

   

​+

1. Lower DJIA
   

   

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1. Lower XAU in USD
   

   

=

& 7) Lower XAU in AUD

Technically, XAU/AUD has now advanced and retreated from the 1715.00 level on four occasions, which ultimately aligned with last Thursday’s comment that (at the time) “XAU/AUD’s advance and retreat from the 1715.00 level for the third time has registered a technical ‘triple-top’ which should, all things being equal, presage lower levels.” Yesterday’s retreat halted at the 21 Day moving average (AUD 1684.00) with additional support levels now emerging at 1671 (the 50 Day moving average) and 1669.50 (the 100 Day moving average). Since mid-August last year when XAU/AUD commenced its sideways trading band between approximately AUD 1615 and 1715, XAU/AUD has seen the 1666.00 level act as a pivot on numerous occasions.

XAU/USD advanced marginally beyond 1360 last Friday, failing to move beyond the Jan 25th high at USD 1366.00 and has subsequently retreated to the 1325 level (the low so far in the Far East this morning). A broader USD 1306 to USD 1366 sideways trading band appears to have established itself in XAU/USD for the time being.

Choppy / range-driven trading appears to be the order of the day - a gala for the scalpers and range traders but a test of patience for the trend-followers.

Good luck.

Regards,
Andre