Precious Metals News Update - 2 May 2018

PRECIOUS METALS RANGES - Trade Date: May 1st

 
COMMENTS / HIGHLIGHTS:

• Thin, illiquid markets resulting from May Day / Labour Day holidays spanning China and most of Europe, saw XAU/USD trade to its lowest level since Jan 2nd this year as the metal rendezvoused with the technically all-important 200 Day moving average at USD 1305.

• The May 1st deadline for the introduction / imposition of US tariffs on aluminium arrived with the Trump Administration issuing a statement that it was close to finalising details of deals with Brazil, Argentina and Australia and that it would also extend negotiations with Canada, Mexico and the EU for 30 days, beyond which there would be no further extensions to the imposition of tariffs.

• The latest instalment of the RUSAL saga saw the Wall Street Journal carrying reports that the US administration had amended its Russia sanctions program which would see the company avoid punitive measures. The US Treasury extended the deadline for controlling stake holder and Russian billionaire Oleg Deripaska to divest from En+ and related entities, to June 6th.

• Later today sees the US Federal Reserve monetary policy announcement. Market consensus is for rates to remain unchanged and there will be no updated economic forecasts or presser.

TECHNICAL COMMENTS:

• XAU/USD: Continuing US Dollar strength and the thinner markets due to May Day holidays saw XAU/USD descend to the conjunction of its 200 Day moving average and the bottom of its textbook sideways trading range between USD 1306 - 1365. The big question now is whether investors will “close their eyes and buy it” at the well delineated support level.

• XAU/AUD: US Dollar strength / AUD weakness acted as a shock absorber for XAU/AUD against the move lower in XAU/USD, keeping the market trapped in its narrow sideways range between its 21 Day moving average (AUD 1738.00) and topside resistance in the AUD 1752.00 / 1757.00 zone.

• XPD/USD: Continuing “headline risk” drove the industrial metal beneath weak trendline support at USD 974 and a move back to where the USD 897 to 1,058 rally commenced a month ago, seems probable.

Good luck.
 
Regards,
Andre