Senior Trader Update 6th June

Good morning everyone.
 
Economic data releases are seemingly providing the intraday speculative flux at present, with political and geopolitical events less dominant for the moment but still a major factor nonetheless.
 
In USD terms, both gold and silver trekked sideways on Monday but in AUD terms both were driven lower throughout the day, as the AUD found friends again, rallying almost 80 pips to just shy of 0.7500
 
Far Eastern trading yesterday saw the release of 1st Qtr company profits data for Australia (+6.0% Q/Q vs 5.0% expected) as well as Chinese CAIXIN Services PMI (May) which was 52.8 vs 51.5 in April. XAU/AUD had caught an early bid on the back of the weekend’s events in London but follow-through buying failed to materialise and as the AUD rallied, XAU/AUD rolled over. There is an Australian RBA MonPol announcement scheduled for today which should see cash rates left unchanged at 1.5%.
 
Attention in Europe remained focussed on Saturday night’s central London terrorist attack as well as this Thursday’s General Election. Reuters were carrying stories that the latest Survation poll has the Conservatives at 41.5% vs Labour at 40.4%. Whilst the credibility of the polling industry has taken a hammering over the past two years, if this latest poll is even remotely accurate, then Theresa May might end up delivering the greatest choke in history since Jana Novotna Novotna led Steffi Graf 6-7, 6-1, 4-1, and 40-30 in the sixth game of the deciding set, with service point for a 5-1 lead in the 1993 Wimbledon Final. Novotna would double-fault allowing Graf to claim the title 10 minutes later (7-6, 1-6, 6-4). Jean van de Velde’s monumental implosion at the 1999 British Open also springs to mind in terms of heroic success in snatching defeat from the jaws of victory. Friday morning in the Far East could be very interesting indeed.
 
A raft of economic data from the US saw;
 
·         U.S. Q1 Productivity revised to unchanged (vs -0.1% expected)
·         U.S. Markit Service PMI (May) 53.6 (vs 54.0 expected & vs 53.1 in Apr)
·         U.S. ISM Services (May) 56.9  (vs 57.0 expected & vs 57.5 in Apr)
·         U.S. Factory Orders (Apr) -0.2% (as expected)
 
US equity markets remained buoyant while the US Dollar Index softened marginally.
 
The big geopolitical news of the day were the decisions by Saudi Arabia, Bahrain, Egypt and the UAE to cut diplomatic ties with Qatar due to Qatar’s relationship with Iran and its support of the Muslim Brotherhood. Air and sea travel to and from Qatar was suspended with land crossings from The Kingdom also cut off. The impact was a panic buying at grocery stores by Qatari’s as more than 40% of the desert nation’s food comes by land via Saudi Arabia. Crude oil values were also pressured lower.
 
Technically, the ball is firmly in the precious metals’ bulls court to provide the ‘juice’ to further the advance. In XAU/AUD terms the way remains opens to the early November high at 1760 while XAU/USD will have its sights set on the mid-April high at USD 1295.50 (and then the psychological ‘big-figure’ at USD 1300).
 
Good luck.
 
Regards,
Andre