Senior Trader Update 26 May 2017

Good morning everyone and Happy Friday.
 
A mixed bag in precious metals as at the close of business in New York on Thursday.
 
XAU/AUD & XAG/AUD closed firmer, bolstered purely by Aussie dollar weakness as both metals managed to rally in AUD terms in the face of a stronger USD Index and higher US equity markets. The reason for the Aussie dollar weakness was likely the AUD’s reaction (as a perceived ‘commodity currency’) to the precipitous 5.7% drop in crude oil overnight (see intraday chart attached), which was administered the “baby seal treatment” by speculators stemming from investor displeasure with OPEC’s (and its partners’) decision to extend production cuts for only nine more months instead of the far deeper cuts anticipated. OPEC announced that no new non-OPEC members will join the global supply reduction deal and it would maintain production cuts of 1.8 mio bpd as agreed in late November 2016. And in a nutshell, that about covers it.
 
Technically, interest in XAU/AUD remains confined to intra-day speculative scalping / jobbing, and the shorter duration moving averages (21 & 55 Day moving averages) are providing good areas for investors to buy on dips, whilst the AUD 1700/1710 remains a formidable technical impediment for the moment. In broader terms, XAU/AUD remains an AUD 1650 - 1710 range-trading proposition.
 
The XAU/USD Daily price action remains contained within a triangular congestion region (with trendline support pegged at USD 1226 & trendline resistance at USD 1276 for today). Momentum buying or momentum selling is likely to ensue depending on which side of the congestion region gold eventually breaks out from.
 
Have a fantastic weekend.
 
Kind regards,
Andre