Gold News Update - 21 September 2018

PRECIOUS METALS RANGES - Trade Date: September 20th

COMMENTS / HIGHLIGHTS:
Thursday saw the Dow Jones Industrial Average Index and the S&P Index rally to record highs, while the US Dollar Index pared recent gains and US Treasury yields hovered around 3% (with Russia and China reportedly significantly reducing their holdings of US Treasury notes in recent weeks)
 
Markets have largely been focusing on the salvos fired between the Trump Administration and the Chinese government in relation to tariffs and the ongoing ‘trade war’, with the latest exchanges in this ‘war’ seeing investor relief that the that U.S. and Chinese tariffs were less harsh than feared. The big winner from this outcome has been palladium, while US equities markets continue to roar on the back of solid economic data resulting from the ‘America first’ agenda of the Trump administration.
 
The Eurozone continues to undergo significant political flux vis-à-vis Brexit negotiations as well as the increasing influence of immigration-averse political parties throughout the block but there has been no discernible transmission of these issues across to precious metals values.

COMMENTS:
XAU/USD has crept higher to pick up its 55 Day moving average at USD 1210.50 but remains within the broader sideways trading range between the Aug 24th low at USD 1183.20 and the Aug 28th high at USD 1214.85. Technically, there is little to suggest other than to respect the support / resistance levels of this sideways / consolidation price action and to buy dips or sell rallies accordingly, pending a breakout. Two levels need conquering before thoughts of consistently higher levels can be entertained. The first is the 55 Day moving average at USD 1210.50 but of more significance is a move and close above the downtrend / resistance line (which comes in today at USD 1223.50) which has remained undefeated since gold began its retreat in mid-April.

COMMENTS:
 XAU/AUD continues holding above support at the 55 Day moving average for the moment (1654.955).  While the potential for continuing weakness down to the AUD 1643.70 level can’t be ruled out, further attempts at trendline resistance (1690.00) and the technically significant 200 Day moving average (1691.05) remain favoured.

COMMENTS:
Positive ‘basing’ type price action sees XAG/USD move above its 21 Day moving average (14.3575) for the first time since mid-June. A close above this level would go a long way toward bolstering the view that the Sep 11th low at USD 13.9375 may be in place, however there remains some formidable resistance levels at USD 14.8025, and near USD 14.9650 / 15.00 (55 Day moving average & August 28th high). Nonetheless, the magnitude of the move since mid-June, the technical significance of the USD 13.6475 level (having not been broken since December, 2015) and current market positioning, all lend weight to the view that silver may soon start to find some friends again. To the downside, a significant break and close beneath USD 13.6475, opens the way to 9-year lows.

COMMENTS:
XAG/AUD continues to hold a significant technical support line at AUD 19.54 (dating back to April 2016) for the fourth day this month but this notwithstanding, downside risk remains in play with the white metal unable to move beyond its 21 Day moving average (AUD 19.88). This market remains a “wait and see” proposition with little other than the presently solid support at AUD 19.54 to suggest that an interim low might be in place. A break beneath AUD 19.54 opens the way to the April 1st 2016 low at AUD 19.32.

Kind regards,
Andre