Senior Trader Commentary 1 June 2017

Good morning everyone.
 
After some backfilling (technical corrective & consolidation work) during Far Eastern trading yesterday, the precious metals complex (gold particularly) steadied and forged ahead to re-test Friday’s highs.
 
Supportive elements included the uncertainty created by the tightening of various polls ahead of next Thursday’s UK General Election (some showing the Corbyn led Labour party within 3% of the ruling Conservatives), with an additional leg-up provided by some soft economic data out of the US, especially a poor Pending Home Sales figure. This placed the US dollar under pressure, benefiting gold as investors were also forced to temper their expectations of an interest rate hike by the US Federal Reserve at their June meeting.
 
U.S. NAR Pending Home Sales (April) were down 1.3% (109.8 vs 112.0 expected and vs 111.3 for March; -5.4% y/y). This represents the biggest drop in pending home sales since August 2014 and the second monthly drop in a row in addition to downward revisions over the last few months.
 
Technically, both XAU/AUD & XAU/USD are positioned within striking distance of major resistance zones. XAU/AUD at 1710/15 & and XAU/USD at 1275. The release of US employment data on Friday could have the final say on whether these levels are dispensed with and if so, there is the potential for significant stop-loss and momentum driven buying.
 
Good luck.
 
Regards,
Andre