Senior Trader Daily Update 1 December 2017

Good morning everyone.
 
Gold and silver continued their southern drift on Thursday, pressured lower by the Dow Jones Industrial Average registering a record high above 24,000 and a spike in US Treasury Yields due to the shortening of odds in favour of the Republican Tax Reform Bill succeeding. Also weighing, were hawkish monetary policy comments from outgoing US Federal Reserve Chairman, Janet Yellen on the back of the seemingly robust US economy.
 
On the economic data release front, U.S. Weekly Initial Jobless Claims were  down 2K to 238K (vs 241K expected).
 
US Ambassador Nikki Hayley’s “fighting words” at the UN to the government of the Democratic People’s Republic of Korea, failed to inspire any ‘safe haven’ buying in the precious metals.
 
With XAU/USD entrenched within a well-defined sideways band, some investor attention has shifted back towards the gold/silver ratio (the number ounces of silver that 1 ounce of gold can purchase), which has rallied and broken through the topside of a triangular congestion zone in recent sessions in view of silver’s accelerated decline in comparison with gold (chart attached).
 
Technically, XAU/USD dropped into the bottom half of its sideways range and any further retreat towards the lower bound of the channel at USD 1265 and its 200 Day moving average at USD 1267, is likely to find good support from shortsellers taking profit, as well as bargain hunting from dip buyers, scalpers and range traders.
 
XAU/AUD continues its consolidatory price action within the triangular congestion region bounded by resistance at the June 6th high at AUD 1728 and major trendline support at AUD 1660. It found support on the dip back towards the 21 Day moving average at AUD 1683.00 on Thursday but a downside break of this level opens the way to the juncture of the 55 Day moving average and trendline support at the AUD 1658 / 1660 level.
 
Good luck and have a great weekend.
 
Regards,
Andre