Precious Metals News Update - 16 May 2018

PRECIOUS METALS RANGES - Trade Date: May 15th

COMMENTS / HIGHLIGHTS:
 
A sea of red across the precious metals complex on Tuesday with gold in particular capitulating through a significant technical level as the ‘mighty’ Greenback soared overnight, in conjunction with US 10 Year Treasury yields touching their highest level since July 2011, peaking at 3.07%.
 
The US currency and bond markets are being propelled by the continuation of impressive macroeconomic data out of the US (on Tuesday it was Retail Sales and the Empire State manufacturing survey), which has emboldened investor confidence regarding the schedule of the US central bank’s interest rate tightening cycle.
 
 
On the geopolitical front, a cloud in the form of objections by the DPRK toward joint military exercises presently being conducted between the United States and South Korea, hangs over negotiations between the DPRK and South Korea and the scheduled historic meeting between the US President and the North Korean Leader on June 12th in Singapore. 
 
 
TECHNICAL COMMENTS:

• XAU/USD:  The trapdoor finally opened beneath the previously solid support at the USD 1300/1306 region. With capitulation at such a significant technical level, it is likely that any bounce back towards the recent support zone i.e. the psychological USD 1300.00/oz level to USD 1306.00 (the lower boundary of the sideways trading range that XAU/USD had been traversing since the start of 2018) will meet resistance now. Other than some minor technical support at the USD 1290 level (the Dec 1st, 2017 high), there is little obvious by way of technical support until the USD 1236.50 level (from where gold commenced its ascent to USD 1366.00 in mid-December last year), particularly as the technically significant 200 Day moving average has now been breached to the downside.   

 

• XAU/AUD: Yesterday’s retreat in XAU/USD drove XAU/AUD below its 21 Day moving average at AUD 1745 and straight to its next downside support at AUD 1727 (55 Day moving average) where it has halted for the present moment. Further weakness would target the previous major resistance / support line at AUD 1714.00

 
Good luck.
 
Regards,
Andre