Senior Trader Daily Update 12 September 2017

Good morning everyone.
 
US equities rebounded sharply back towards recent record highs, as last week’s investor bearishness on the back of forecast apocalyptic devastation of Florida in the wake of Hurricane Irma, failed to materialise when the expected Category 5 hurricane (consistent wind speeds of 252 km/h or higher leading to catastrophic damage) made landfall closer to a Category 2 hurricane (consistent wind speeds of 154-177 km/h leading to extensive damage).
 
Consequently, US equity and Dollar strength weighed upon precious metals values, as profit taking / long liquidation was triggered amongst already heavily laden, non-commercial speculative long accounts.
 
As highlighted yesterday, some mean-reversion back towards the 21 Day moving average at XAU/AUD 1646.00 on speculative rebalancing was favoured prior to a (eventual?) clearing of resistance at AUD 1686.50 (the 76.4% Fibonacci retracement of the 1728 to 1552.50 move), which would then open the way to a move to the June 6th high at AUD 1728.00, which if obtained, would complete a technical “rounding bottom” pattern.
 
The sheer weight of speculative positioning to the long side as revealed in the latest CFTC Commitments data was of concern, leaving gold susceptible to bouts of long liquidation (also providing dip buying opportunities) and a pullback towards the 21 Day moving average at USD 1310 from present levels cannot be ruled out. However, targets at USD 1368 (August 2nd high) and USD 1375.50 (double top from July 6th & July 11th 2016 ) remain “in play”.
 
Good luck.
 
Regards,
Andre