Senior Trader Daily Update 07 July 2017

Good morning everyone and happy Friday!
 
A good day for range-traders as the precious metals chopped around / consolidated on Thursday, managing to retain the bulk of recent gains by the close of business in New York.
 
XAU/AUD moved freely between AUD 1608 - 1616 while 1222 - 1230 was the range seen in XAU/USD.
 
Mixed economic data out from the US overnight on balance was beneficial for precious metals.
 
Private payrolls processor ADP’s national employment report came in under market expectations (+158,000 in June vs +180,000 expected). Meanwhile Initial Weekly U.S. Jobless Claims came in +4K and ISM Non-manufacturing Purchasing Managers Index came in 57.4% for June (vs 56.5% expected).
 
Geopolitically, the Korean Peninsula remains a flashpoint and continues to be monitored closely. Also on investor radars is the G20 meeting currently taking place in Hamburg.
 
Today’s highlight will undoubtedly be (all things being equal) the closely watched US Bureau of Labor Statistics Non-Farm Payrolls and Employment data release for June (+177K & 4.3% expected respectively).
 
This morning in thin, pre-market CME trading the metals were squashed in another of those farcical anomalies peculiar to the precious metals futures markets. In a one-minute span, 3,880 lots (388,000 ozs) were pushed through the August futures contract, sending gold from USD 1224.8 down to 1218.5 (and XAU/AUD from 1615.50 to 1610.00) before snapping back to unchanged almost instantly, suggesting a ham-fisted butchering of some poor sap’s stop loss order. September silver futures were likewise smashed from USD 16.0650 down to 14.34 as 5,000 lots (25 million ounces) were vomited out into a liquidity vacuum. The metal recovered the entirety of the downdraft almost instantly. It’s hard to choose the more appropriate response when these kind of moves are seen - bemusement or utter contempt for the mechanisms that permit them. Needless to say, other markets had not budged one iota nor had anything hit the newswires as this travesty was unfolding.
 
Technically the AUD 1591.50 (March 21st low support line) proved its mettle as the market held that level on Monday and Tuesday and has continued moving higher, removing for the moment the risk of the AUD 1578.00 (March 15th low) being tested. Expect some profit taking / speculative short selling at the previous support line at AUD 1621.50, which is now likely to act as initial resistance from present levels.
 
XAU/USD sees technical resistance at the 200 Day moving average (USD 1231.00) and at the top of the (downtrend) channel (USD 1236.25). The USD 1214 (May 9th low) held firm taking away the risk of a test of the USD 1195.00 (March 10th low) to 1197.50 (mid-March lows) area, at this point in time.
 
Good luck and have a great weekend.
 
Regards,
Andre