Precious Metals News Update - 6 February 2018

Hello everyone.
 
Violent moves were seen across the gamut of financial markets spanning stocks, interest rates, currencies and commodities, as the week commenced.
 
Yesterday’s Far Eastern session was one of the choppiest I can recall in recent memory.
 
Friday’s 666 points poleaxing of the Dow Jones Industrial Average was just a pre-cursor to Monday’s rout. Triggered by the much better than expected US labor market data that was released on Friday and which had sent the US 10 year Treasury bond yields spiking above 2.8% and driven the Greenback higher, a follow through surge beyond 3% was seen in the US 10 Year yield overnight before the market flipped and retreated sharply, but in the process the DJIA Index tested the internal constitution of investors as it shed 1,500 points - the biggest single day decline in its history.
 
The US dollar roared back against the Euro and the AUD but weakened against the JPY, leading to an overall advance in the US Dollar Index. The bloodbath in the cryptocurrency markets continued apace with Bitcoin trading to a low of 6,579 against the USD overnight, having posted a high of 19,511 on December 18th - a mere 7 weeks ago. My trusted Casio tells me that’s a decline of a lazy 66% in value. A mere flesh-wound? As one wag wryly noted, “Looks like the pyramid formation from nothing to $20,000 back down to nothing is the next likely target.  Nothing from nothing leaves nothing and Bitcon (sic) was never something, was it?”  
 
Friday’s CFTC Commitments of Traders report (as at January 30th) showed:

• An overall reduction in speculative long length by non-commercial gold accounts of around ¾ of a million ozs.

• Long liquidation by long non-commercial silver accounts was significantly exceed by shortcovering, leading to a net increase in silver market length.

• Modest buying from long accounts in platinum in addition to some light shortcovering, resulted in a small increase in net long length.

• Heavy long liquidation in palladium by non-commercial speculative accounts lead to an overall reduction in long length just short of 200,000 ozs.

The retreat in the AUD/USD overnight allowed XAU/AUD to finally advance beyond the mid-Jan 2018 high at AUD 1695.00 (just beneath the psychological big-figure resistance at AUD 1700.00) and the way now opens for potential further gains into the AUD 1710.00 /1715.00 region.
 
XAU/USD’s failure last week to find support at the previous ‘double top’ resistance at USD 1345.00 has seen the market settle into a broader (and much choppier) USD 1325 - 1365 trading band, with immediate topside resistance at USD 1350.00
 
Safe to say that freshly ensconced US Federal Reserve Chairman Jerome Powell is unlikely to forget his first day in the new job!
 
Good luck.
 
Regards,
Andre