Senior Trader Update 2 June 2017

Good morning everyone and Happy Friday. The winning post is in sight!
 
A real mixed bag across the precious metals complex yesterday with various data releases creating flux ahead of today’s all-important employment data release by the Bureau of Labor Statistics in the US.
 
XAU/AUD moved beyond the previously solid technical barrier at the 1710 level. XAU/USD which had drifted lower throughout the day, pared losses by the New York close. Silver which had been driven lower during Asian and European trading, bounced rubber-like once US trading was underway. Platinum on the other hand was shunned by investors while palladium advanced solidly.
 
During Far Eastern trade yesterday, an early slide in XAU/AUD was arrested and reversed as a result of;
 
·         A Chinese Yuan Fix that was six ‘big figures’ below the previous day with the benchmark rate set at 6.8090
·         A weak Caixin Purchasing Managers Index (PMI)
·         A disappointing Q1 Australian private capex (up 0.3%) which weighed on AUD/USD and consequently drove XAU/AUD higher.
 
The markets consolidated during European trade but mixed data from the US created choppy trading conditions. Specifically, US Construction Spending (April) showed a 1.4% retreat (vs +0.5% expected and vs a positive revised 1.1% for March which was previously -0.2%). Then, the private ADP jobs report (May) blew expectations out of the water, coming in at +253,000 (vs +180K expected). Initial Weekly U.S. Jobless Claims however, showed a 13K increase somewhat contradicting the ADP news.
 
Probably the biggest news of the day was the announcement by US President Trump of his decision to withdraw the US from the 2015 Paris Climate Accord. During his announcement, the President stated that he was keeping a promise he made during the 2016 election campaign to put America and Americans first, quipping that “I was elected to represent the citizens of Pittsburgh, not Paris,”. He added that his Administration will “begin negotiations to re-enter either the Paris Accord or a really entirely new transaction on terms that are fair to the United States, its businesses, its workers, its people, its taxpayers.”
 
Investors cheered, driving the Dow Jones Index to record highs.
 
Technically, the fact that XAU/AUD has surmounted major resistance at 1710 should be respected and the way now opens to the early November high at 1760 - with the proviso that monthly Non-Farm Payrolls releases can be a complete lottery, so beware of significant volatility either side of 08:30 New York time.
 
XAU/USD moves deeper into the ever-contracting triangular congestion zone which is today bounded between USD 1231 and 1274 and momentum and stop-loss buying (or selling) is likely on a breakout from the zone.
 
So, onwards to US payrolls tonight and the markets’ verdict on the data’s likely impact on the Federal Reserve’s MonPol announcement later this month.
 
Have a great weekend and good luck.
 
Regards,
Andre