Precious Metals News Update 24 January 2018

Hello everyone,
 
The three day US government “shutdown” concluded prior to the commencement of Far Eastern trading yesterday, after the US Senate voted (81-18) to pass funding measures through until February 8th in exchange for a promise from Republican leaders to address the DACA (Deferred Action for Childhood Arrivals) issue.
 
The record books will show that precious metals advanced by the close of US trading on US Dollar weakness (resulting from fears of a potential trade war after President Trump slammed a 30% tariff on the importation of Chinese solar panels) but that belies what was an extremely choppy trading day, with silver in particular seeing a precipitous US $0.30 descent early in the US session before going on to erase the entirety of its morning losses.
 
The Bank of Japan set the tone during in the Far East when, in spite of leaving interest rates unchanged as anticipated by the markets, the central bank threw a banana skin at investors by skewing the wording of its latest MonPol statement in a more hawkish direction than prior statements. It was suggested that inflation expectations "have been more or less unchanged," versus previous statements stating that they were "weakening." Governor Kuroda then completely invalidated the newly worded statement when he stated at the subsequent presser that the BoJ had not arrived at the point where it was considering winding in its easy monetary policy stance, and that the 2% inflation target being pursued by the BoJ remained in place with no intention to reduce its JGB buying commitments.
 
Technically, XAU/USD albeit in extremely choppy intraday price action between “double-top” resistance at the USD 1345 level seen on Jan 15th and 17th and USD 1319.25 (the 23.6% Fibonacci retracement of the USD 1236.50 to 1345.00 move), advanced yesterday back towards the double-top at USD 1345. Another failure at this level would put a bearish technical “triple-top” in place. Penetration beyond USD 1345 however, would likely spark momentum-driven breakout buying and shortcovering / stop-loss buying, thereby clearing the way to last year’s September 8th high at USD 1358 and July 2016 highs at USD 1375.00.
 
 A bullish engulfing candlestick posted on the Daily Chart yesterday for XAU/AUD and a close above the 55 Day moving average, sets XAU/AUD up nicely for continuing advances towards resistance at the mid-Jan 2018 high at AUD 1695.00 (just beneath the psychological big-figure resistance at AUD 1700.00) and potentially on towards the late November 2017 high at AUD 1715.00 (the upper bound of an AUD 1615 – 1715 sideways trading band which has been in place since mid-August last year).
 
Good luck.
 
Regards,
Andre