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Precious Metals News Update - 19 November 2018

19 November 2018

PRECIOUS METALS RANGES - Trade Date: November 16th

Precious metals ranges 

COMMENTS / HIGHLIGHTS:
 
Gold remained bid on Friday, driven largely by UK PM May’s self-inflicted Brexit chaos and some ‘dovish’ comments from US Federal Reserve Bank officials.
 
There is no point mincing words here. It is impossible to conceive a more antithetical outcome to the verdict delivered and desired by British voters in the June 2016 referendum, which was to leave the European Union and to regain its sovereignty by returning control of its law making and borders to its parliament (and adjudication on said laws to its own courts), than the 585 page capitulation aka the ‘Withdrawal Agreement’, served up by the British PM and her civil service to the UK Parliament last week. 28 months of negotiations (apparently carried out by halfwits), have resulted in a ‘deal’ that would keep the UK in Brexit ‘purgatory’ indefinitely (neither in nor out), for which British taxpayers would have the privilege of continuing to pay the EU for access, whilst stripping the UK of all voting rights and leaving the country at the mercy of the European Court of Justice and which would see Northern Ireland effectively split from the rest of the UK. The UK PM has managed to do the impossible, which is to unite the ‘Leave’ and ‘Remain’ factions in their contempt for the deal as it stands. This has opened a number of ‘forks in the road’: (i) Leaving with no deal and exiting on WTO terms (ii) Capitulation under the terms of the current ‘Withdrawal Agreement’ (unlikely) (iii) A second referendum (unlikely) (iv) A ‘no-confidence’ vote against the British PM with the possibility of new, ‘committed to Brexit’ leadership taking over negotiations. Whichever way its sliced or diced however, markets and investors hate uncertainty and Theresa May’s government has delivered that in spades.
 
Turning to the comments from US Federal Reserve Reserve officials now, and coming on the back of ‘dovish’ comments from Fed Reserve Chairman Powell last week which were perceived by the markets as walking back the central banks strident ‘hawkish’ tone of late, Fed members Clarida and Kaplan also issued dovish comments focusing on lower growth and leaving the impression amongst investors that the Fed might potentially slow its path of gradual rate increases.
 
Elsewhere, the EUR strengthened against the USD on Friday when President Trump indicated that the US may not have to impose additional tariffs on China.
 
Finally, Italy and the EU remain at loggerheads over EU member-state budget rules and with the Italian government steadfast in its position, it is within the realm of possibility that the EU could initiate an "excessive deficit procedure" against Italy.
 
Kind regards,
Andre