Senior Trader Daily Update 6 December 2017

Good morning everyone.
 
Gold traded to its lowest level since August 9th in USD terms as the markets remained confident that the US Tax Reform legislation presently making its way through both Houses of government, will be passed before year end. ‘Risk on’ investor sentiment was thereby stoked as the US Dollar was driven higher against its major pairs.
 
The southward drift in prices was felt across the entire precious metals complex and the Gold/Silver ratio saw its highest level since July 10th (with silver depreciating at a faster rate than gold).
 
The Greenback was further buoyed by the likelihood that a US government shutdown will be averted before the December 8th deadline. US Senate Majority Leader Mitch McConnell stated unequivocally that “There’s not going to be a government shutdown,” indicating that a funding and debt-ceiling deal will be negotiated by the end of the week.
 
Technically, XAU/AUD pierced major trendline support before steadying around the 55 Day moving average at 1660.00 but a continued drift lower towards the 200 Day moving average at 1648.00 seems probable.
 
XAU/USD broke through support at the bottom end of its recent sideways range and below the all-important 200 Day moving average before picking up bids again at USD 1260.00 - the August 9th low. The August 8th low at USD 1251.50 emerges as the next support level on any break beneath USD 1260.
 
Friday’s latest monthly US employment data from the Bureau of Labor Statistics (consensus for the headline Non-Farm Payrolls (Nov) figure +199K) looms as the next potential major market moving event, barring any unforeseen ‘headline risk’ events in the interim.
 
Good luck.
 
Regards,
Andre