Senior Trader Daily Update 30 June 2017

Good morning everyone and Happy Friday!
 
Precious metals values remained on the backfoot with the normally supportive US dollar weakness factor, taking a back seat to general US equity market strength, higher US bond yields and perhaps more pertinently, market perception that comments from the President of the ECB and the Governors of the British and Canadian central banks, portend a shift back towards monetary policy normalisation and an accompanying rise in interest rates.
 
Of course, there may be an element of seasonality to the moves as well, with 2014 being the only year in a sequence going back to 2010 where price weakness (or price stagnation) has not eventuated over the northern hemisphere summer holidays when market interest and market liquidity is traditionally impacted - the proverbial “Sell in May and go away” element. Possible too, is that quarter / half yearly / financial year end book squaring is weighing.
 
Be that as it may, the previously robust XAU/AUD major support line was breached and as a result, XAU/AUD rapidly retreated to the March 31st low at AUD 1621.00 before finding support. Should the trek lower continue, then AUD 1591.50 (March 21st low) and AUD 1578.00 (March 15th low) would be the next likely areas of support.
 
XAU/USD for the moment, marks time within a sideways range between its 55 & 200 Day moving averages at USD 1257.00 and 1233.50 respectively.
 
Good luck and enjoy your weekend.
 
Regards,
Andre