Precious Metals News Update - 9 April 2018 (Trade date: April 6th)

Hello everyone.
 

COMMENTS / HIGHLIGHTS:

• Markets were driven hither and yon in thin Far Eastern trade on Friday (Shanghai closed for the Tomb Sweeping public holiday) as US President Trump continued aggressively pursuing policies intended to redress the United States’ $500 billion trade deficit with China, this time in the form of firing additional trade war salvos (“In light of China’s unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs”)

• The Greenback and US equity indexes weakened on the back of the news, while precious metals marched higher.

• Gains were quickly pared as end-of-week position squaring and profit taking commenced from the middle of the Far Eastern trading session right up until the all-important US Bureau of Labor Statistics’ employment data release for March.

• The headline US Non-Farm Payrolls figure for March came in below market expectations at +103K (vs +185K estimated) with the Unemployment Rate unchanged at 4.1% (a 17 year low). February’s strong Non-Farm Payrolls figure was revised upwards.

• Gold and silver rebounded from their intraday lows upon the release of the Non-Farm Payrolls data to post fresh intraday highs into the close as US stocks and the US Dollar Index were driven lower.

• Palladium continued trekking lower as nervousness surrounding the ramping up of the trade war rhetoric weighed.

• In addition to the ongoing trade war, the probability of a military conflagration increased with the United States President threatening action towards Syria (and Russia) on the basis of an as-yet unverified and alleged chemical weapons atrocity in the rebel held town of eastern Ghouta in Syria. Russia responding that “Military intervention under false & fabricated pretexts in Syria, where Russian servicemen stay at the request of the legitimate government, is absolutely unacceptable and may trigger the gravest consequences.”

TECHNICAL COMMENTS:
XAU/USD: Presently locked within a triangular congestion region bounded by support at USD 1320.00 (a break beneath which support is located in the USD 1303.00 – 1313.00 region (March 1st low and 100 Day moving average) and resistance at USD 1344.00.

XAU/AUD: Since its topside breakout beyond AUD 1715.00 (from its previously well-established sideways trading range), a nascent trading range bounded between previous resistance at AUD 1715 (which now acts as support) and the March 26th and April 2nd highs at AUD 1757.00, is presently in play in XAU/AUD.

XAU/XAG Ratio: Continues to trek along within its uptrend channel. The end of February 2016 high at 83.84 the next potential technical target.

Good luck.