Senior Trader Daily Update 29 September 2017

Good morning everyone and Happy Friday as the curtain comes down on another month (and quarter) for the year.
 
Mixed trade on Thursday saw bargain hunters lift gold and silver away from Wednesday’s post-option expiration 4-week lows (in US Dollar terms). Closer scrutiny of US President Trump’s tax reform plan also saw investor enthusiasm come off the boil to a small degree, leading to the Greenback paring some of its recent gains to the benefit of gold and silver.
 
Garnering more attention however, was the price of palladium surpassing that of platinum (in US Dollar terms) on Thursday for the first time in 16 years. Commerzbank highlighting in their Daily Commodities note that “Besides different fundamental backdrops – a high palladium supply deficit is envisaged this year, while the platinum market is likely to be largely balanced – there are also differences in terms of investment demand: speculative financial investors have been betting heavily on rising palladium prices for months now, whereas platinum has seen high net short positioning for a time.”
 
Since the start of the year, XAU/USD has registered an +11.91% gain (as at yesterday’s close), XAG/USD +5.76%, XPT/USD +2.48% and XPD/USD, a colossal +37.57%!
 
Technically XAU/AUD has consolidated over the course of the week, suspended between its 200 & 21 Day moving averages at AUD 1633 and 1651.
 
Meanwhile, XAU/USD is confined within a well-defined downtrend channel (Upper channel resistance at USD 1303 and Lower channel support at USD 1266 today). Also in play are the 50% Fibonacci retracements (of the USD 1204.50 (July 10th) to 1357.50 (Sept 8th) move) located at USD 1281 and the 61.8% retracement at 1263, as well as the 100 Day moving average at USD 1272. Even though the trend is down, given the market’s recent proclivity to ‘whipsaw’ bears on any geopolitical news out of North Korea, it behooves short side speculative interests to exercise caution and to choose their entry levels wisely.
 
Good luck and have a great (long) weekend!
 
Regards,
Andre