Precious Metals News Update - 4 May 2018

PRECIOUS METALS RANGES - Trade Date: May 3rd

COMMENTS / HIGHLIGHTS:

• Softer US Treasury yields, a softer US Dollar and weaker US equities on concerns surrounding the ongoing trade negotiations between the United States and China, assisted early precious metals bargain hunters in keeping support under gold at a crucial technical level.

• When comments emerged near the conclusion of negotiations on day one that carried the words "optimistic" and "pretty positive", equities, the US dollar and US Treasury yields partially reversed their early moves, which pared precious metals gains.

• Elsewhere, the World Gold Council released its ‘Gold Demand Trends Q1 2018’ report which amongst other things, highlighted the following:

  • “Gold demand had a soft start to 2018, reaching 973 tonnes, the lowest first quarter since 2008.

  • Global jewellery demand was roughly flat at 488t, down 1% on Q1 2017.

  • China, Germany and the US drove weakness in bar and coin investment: global demand was down 15% to 254.9t.

  • ETFs saw their fifth consecutive quarter of inflows. Holdings grew by 32t, due solely to growth in North America.

  • Central banks added 116t to global official reserves in Q1 2018.

  • Demand for gold in the technology sector continued to improve, up 4% on Q1 last year.”

  • (Source: World Gold Council ‘Gold Demand Trends Q1 2018’: https://www.gold.org/research/gold-demand-trends/gold-demand-trends-q1-2018 )

• Everyone is now strapped in for today’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%

TECHNICAL COMMENTS:

• XAU/USD: While further downside risk cannot be ruled out yet, higher lows over the past two days and yesterday’s price action in particular,  augurs well for XAU/USD to yet again demonstrate the robustness of support at the lower end of the sideways trading band it has been contained between since the start of the year.

• XAU/AUD: XAU/AUD remained trapped in its narrow sideways range between its 21 Day moving average (AUD 1739.00) and topside resistance in the AUD 1752.00 / 1757.00 zone.

• XPD/USD: Since retracing in excess of 61.8% of its USD 897 to 1,058 move, XPD/USD’s price action remains unconvincing and move back down to where the rally commenced a month ago still seems likely.

Good luck and have a great weekend.
 
Regards,
Andre