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Precious Metals News Update - 16 November 2018

16 November 2018

PRECIOUS METALS RANGES - Trade Date: November 15th Precious metals ranges 

Two noteworthy issues underpinned the ‘bid’ tone in gold on Thursday.

The first, somewhat more moderate comments from the US Federal Reserve Chairman, Jerome Powell vis-a-vis the Fed’s outlook on interest rates. Specifically, the Fed Chair on Wednesday described the US economy as ‘strong’ but warned that it would face ‘headwinds’ in 2019. Additionally, Mr Powell commented that while the Fed’s current monetary policy stance of slowly raising rates was unlikely to be altered for the present, the US central bank was closely monitoring anaemic world economic growth and that additionally, US equity market weakness might affect the Fed’s MonPol decisions in future. Consequently, the US dollar was weaker and bond yields were lower. Elsewhere, a raft of mixed U.S. economic data was largely disregarded by the precious metals markets.

The second and arguably more significant issue on the day, was the announcement by the hapless British Prime Minister, Theresa May, of her draft agreement on the UK’s withdrawal from the European Union. The draft was met with the resignations of her Brexit Secretary (Dominic Raab), her Work and Pensions Secretary (Esther McVey) and six other government officials, as well as scorn and derision from all sides of the political spectrum during Wednesday’s Prime Ministers Questions.
As a result, the GBP was torpedoed and European bond yields rallied. The gormless UK PM now faces the increasing prospect of a vote of ‘No confidence’ in her leadership (with the betting agencies currently pricing a likely exit date for her between October to December 2018 at $1.98)
In addition to the British Parliament’s approval, the 27 other member states comprising the sclerotic EU will also need to approve the UK's withdrawal agreement. Brussels has set November 25th as the date for this approval.
Kind regards,