Senior Trader Daily Update 04 July 2017

Good morning everyone.
 
The DJIA posted a record high overnight ahead of the Independence Day holiday in the US and the Greenback rallied strongly against the majors (EUR, JPY etc). These factors in combination with thinner, holiday affected markets, allowed precious metals bears to press their advantage relatively unimpeded.
 
XAU/AUD retreated to and halted right at the AUD 1591.50 (March 21st low) highlighted in a few recent commentaries. Some mean-reversion on profit taking or a short squeeze may unfold and provide a bounce away from the support line in the short term, however it looks as though the AUD 1578.00 (March 15th low) will likely be tested at some point, especially in light of prices being driven beneath the technically significant 200 Day moving average in XAU/USD (1233) which triggered some momentum selling and opened the way to USD 1214 (May 9th low) as well as the USD 1195.00 (March 10th low) to 1197.50 (mid-March lows) area.
 
As we have seen repeatedly, geopolitical developments can change sentiment rapidly, and gold and silver at these lower levels may seem cheap further down the road, however at this stage the prudent course doesn’t appear to be stepping in to “catch a falling knife”.
 
US markets are closed today for Independence Day.
 
Good luck.
 
Regards,
Andre