Senior Trader Daily Update 14 December 2017

Hello everyone.
 
Gold and silver (in both USD and AUD terms) experienced what is commonly known as a “buy the rumour / sell the fact” rebound (or in this specific instance a “sell the rumour / buy the fact” bounce), as profit taking / shortcovering emerged when the US Federal Reserve confirmed a widely anticipated (and priced in) Fed Funds rate increase by announcing a 25 basis points hike at the conclusion of its FOMC monetary policy meeting. Additionally, guidance for next year suggested the likelihood of at least three more interest rate increases. The US central bank also signalled its intention to keep to its commitment to increase its monthly balance sheet runoff to $20b in Jan.
 
The ECB and Bank of England are scheduled to make monetary policy announcements on Thursday.
 
During the morning session of Far Eastern trade today, XAU/AUD was crunched lower when the AUD/USD surged on much better than expected employment data (+61,600 actual vs 19K expected). The early retreat in XAU/AUD had been completely reversed by the time the morning session concluded for lunch.
 
Technically, unless XAU/AUD’s sequence of lower highs and lower lows is broken soon, the October 19th low at AUD 1625.25 and a cluster of lows / support at the AUD 1615.00 level extending back to late August, will be brought into play. On a positive note, Tuesday’s ‘Hammer’ candlestick on the Daily chart and yesterday’s Fed-driven surge in XAU/USD (circled), give a strong indication that an interim low may have been posted (thereby averting a sustained decline down to the USD 1205.00 area for the moment), and increasing the likelihood of further gains on mean-reversion back towards resistance at the 200 Day moving average (1268.00) and extending potentially as far as the 55 Day moving average (1277.00)
Good luck.
 
Regards,
Andre