Senoir Trader update 18.04.2017

Good morning everyone and I trust you had a good long weekend.
 
Investors (and I would venture, most people in general) remained on edge as major geopolitical events continued to unfold while the markets were closed for the Easter break.
 
Following on from its Syrian spanking, the US military dropped the largest non-nuclear bomb ever used on a complex of ISIS caves and tunnels in Afghanistan. The 22,000lb Massive Ordinance Air Blast aka the “Mother Of All Bombs” with its 1.6Km blast radius, reportedly killed 94 ISIS militants as President Trump backed up his campaign promise to “wipe ISIS off the face of the earth” with action.
 
Simultaneously, tension continued to build on the Korean Peninsula as the US navy’s Carl Vinson armada assembled with the intent of military engagement in the event of North Korea going ahead with a proposed nuclear test.
White-hot rhetoric from both sides did nothing to diffuse the situation as the US reserved its right to a pre-emptive military strike and North Korea signalled its intention to pursue all out war (including the use of nuclear weapons) in response to any act of US aggression.
 
China meanwhile acquiesced to US demands for it to engage and assist the US in heaping pressure on Pyongyang with the world’s second largest economy turning back a shipment of North Korean coal.
 
Throw into the mix a reckless news headline from Bloomberg during the North Korean annual "Day of the Sun" celebration parade, with Bloomberg stating that Chinese news agency Xinhua had reported that North Korea had fired a projectile (NORTH KOREA FIRES PROJECTILE, MEDIA SAYS: XINHUA) and the world could have been facing a much different and dire situation today. The headline subsequently turned out to be a misinterpretation of events by Xinhua with the correct translation equating to the appearance of a new submarine-launched missile at the parade for the first time (NORTH KOREA SUBMARINE-LAUNCHED BALLISTIC MISSILE SEEN AT MILITARY PARADE FOR FIRST TIME: RTRS) as reported by Reuters.
 
The result was that GOLD/USD pushed above the 1289 resistance line highlighted last week (albeit on exceptionally thin volume) but with liquidity absent and with the USD strengthening appreciably particularly against the JPY, gold retreated in both USD and AUD terms.
 
Perhaps it was not all that surprising that gold rolled over, given that the latest CFTC data which was released on Friday showed a huge net long increase in non-commercial positions of 17,230 contracts (Futures only equalling 1.723 mio ozs) and an increase of 15,948 contracts (Futures & Options equalling 1.595 mio ozs).
 
Technically, given the level of long speculative length in the market (and assuming the geopolitical temperature subsides somewhat), GOLD/AUD could easily find itself consolidating back within the AUD 1660 – 1675 region (which would be healthy for further advances), while GOLD/USD’s peek above the MAJOR trendline resistance dating back to September 6th 2011 and which must be respected, appears to have been a false break for the present.
 
Have a good week ahead.
 
Regards,
Andre