Senior Trader Daily Update 26 June 2017

Good morning everyone. I trust you enjoyed your weekend.
 
Gold and silver closed out last week on a somewhat buoyant note, a weaker Greenback providing a boost but arguably, more likely due to the “breathing space” afforded to gold bulls after the latest CFTC COTR data (as at June 20th) showed a monumental level of long liquidation that had come in on the back of the US central bank’s hawkish monetary policy statement.
 
As at June 20th, CFTC data showed:
 
·         A colossal 4.8 million ozs of long liquidation / profit taking (Futures and Options Combined) from the non-commercial gold speculative community, tempered by short-covering as gold found a bottom near significant technical levels.
 
·         Silver non-commercial specs not only abandoned long positions but added to short positions in equal magnitude with a net change in speculative long length of 73 million ozs (Futures and Options Combined).
 
·         The Platinum Group Metals (PGM’s) both saw modest reductions in net non-commercial speculative long length.
 

Elsewhere, Commerzbank in a daily note on Friday highlighted data from customs authorities which showed that China had imported 407 tons of silver in May (nearly twice as much as the same period last year and the largest quantity since December 2010). Silver imports for Jan-May 2017 have exceeded the same period last year by and impressive 33%. Platinum imports reached a 16-month high (9.5 tons which exceeded the year-on-year level by 45%). Palladium imports were low at 1.3 tons and yet somewhat puzzlingly, palladium continues to outperform platinum.
 
Technically, the major uptrend support lines that commenced in mid-December last year remain crucial demarcation points for gold bulls in both AUD and USD terms and the fact that they have been tested and held firm on two occasions now since they commenced, underscores this.
 
In XAU/AUD, major trendline support sits at AUD 1637 today and the encouraging price action of recent days favours some mean-reversion back towards the conjunction of the 21 & 55 Day moving averages at AUD 1682 from here.
 
The major trendline support in XAU/USD is today located at USD 1245.00 with the 200 Day moving average at USD 1235.00. Gold has made good progress from that base towards the 55 Day moving average at USD 1260 and the 21 Day moving average near USD 1265 where the rally may potentially be held up initially.
 
Have a good week.
 
Regards,
Andre