Precious Metals News Update - 25 May 2018

27 May 2018

COMMENTS / HIGHLIGHTS:

After Wednesday’s release of the somewhat ‘dovish’ FOMC minutes from its most recent meeting in May, - with the US central bank’s monetary policy committee indicating that while it intends to stick to its rate hike trajectory, it is willing to allow some levity for inflation to overshoot, - the brakes were slammed on the Greenback and US 10 Yr Treasury yields, providing gold with some respite from recent downside momentum.

The precious metals complex gathered a further head of steam on Thursday when US President Trump terminated the planned historic Summit meeting with North Korean Leader Kim Jong Un in Singapore on June 12th. The White House released a letter to the DPRK leader, giving the US President’s reason as “..based on the tremendous anger and open hostility displayed in your most recent statement, I feel it is inappropriate , at this time, to have this long-planned meeting.” This was followed up by the President stating that the US military would be “ready if necessary” and that South Korea and Japan "are not only ready should foolish or reckless acts be taken by North Korea, but they are willing to shoulder much of the cost of any financial burden" of any conflict.

Monday sees long weekends in both the US and the UK (US Memorial Day and UK Spring Bank Holiday) and all things being equal, trading activity should reduce to a trickle early on Friday as investors eye the exits.

TECHNICAL COMMENTS:

XAU/USD: Some formidable technical resistance appears in the form of the lower boundary of the sideways trading range that XAU/USD had been wedged between since the start of 2018 (USD 1306.00) & the conjunction of the 200 Day moving average (USD 1307.75), which if successfully negotiated would see XAU/USD move back into the previous USD 1306 to 1366 channel and would simultaneously confirm the veracity of the support line which commenced on 16/12/16 at USD 1121.00 and beneath which XAU/USD has yet to close.

XAU/AUD: Yesterday’s ‘Bullish engulfing’ candlestick on the Daily chart provides a good degree of confidence that an interim low was registered on Tuesday and a move and close beyond AUD 1730 (55 Day moving average) frees the way for XAU/AUD to move back towards the top end of the previous sideways range between AUD 1714 and 1757.

Good luck and have a great weekend.

Regards,
Andre