Precious Metals News Update - 3 May 2018

PRECIOUS METALS RANGES - Trade Date: May 2nd

 
COMMENTS / HIGHLIGHTS:

• Precious metals firmed on modest shortcovering ahead of the anticipated US Federal Reserve monetary policy announcement. Prior to its release however, was the release of the private ADP national employment report (April) which came in +204K (vs +190K expected), to which the precious metals markets reacted with a yawn.

• The US Federal Reserve’s FOMC in a unanimous decision left interest rates unchanged noting that; “Inflation on a 12-month basis is expected to run near the Committee’s symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced,”. Additionally, the target for benchmark overnight borrowing rates will remain in a range between 1.5% and 1.75%. "The committee expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in the medium term and labor market conditions will remain strong,"

• Immediate attention now shifts to Friday’s US Bureau of Labor Statistics’ all-important April employment data with market consensus pegged at +192K jobs for the headline Non-Farm Payrolls figure and an Unemployment Rate of 4.0%

• Tensions surrounding the ongoing trade negotiations between the Trump Administration and China, the European Union and an assortment of other countries in relation to steel and aluminium quotas and tariffs also remain in play.

• Another “crunch” moment arrives on May 12th when President Trump will decide whether to renew “waivers” suspending some of the USA’s sanctions on Iran that were agreed by the previous Administration as part of the 2015 Iran nuclear accord. Any decision by the US President not to renew the waivers would likely see the termination of the accord and ramp tensions in the region higher (especially between Iran and Israel).

TECHNICAL COMMENTS:

• XAU/USD: There was a knee-jerk spike higher after the FOMC announcement but XAU/USD was unable to hold onto its gains, closing right at its 200 Day moving average (USD 1305.00). The market remains perched right at the juncture of its 200 Day moving average and the bottom of its textbook sideways trading range between USD 1306 - 1365. It now remains to be seen whether investors will pile in and “close their eyes and buy it” at current levels to again affirm the veracity of the well delineated support level.

• XAU/AUD: XAU/AUD remains trapped in its narrow sideways range between its 21 Day moving average (AUD 1738.00) and topside resistance in the AUD 1752.00 / 1757.00 zone.

• XPD/USD: A firmer XPD/USD yesterday appears to be corrective in nature and a move back down to where the USD 897 to 1,058 rally commenced a month ago, still seems probable.

Good luck.

Regards,
Andre