Spot gold is trading modestly higher, buoyed by a softer dollar. Markets are looking ahead to today’s trade talks between President Trump and EU officials, so price action may remain relatively subdued until there are initial indications of how those talk went.


President Trump tweeted that the U.S and Europe should drop all subsidies and tariffs. “Hope they do it, we are ready — but they won’t!,” said Trump.


The European Commission is reportedly preparing an additional $20 bln in retaliatory tariffs, presumably in case things don’t go well today. Meanwhile the Washington Post is reporting that President Trump is looking to impose a 25% tariff on pretty much all auto imports. It seems that neither side is terribly optimistic going into the talks today.


The President also lashed out at “vicious” China for targeting U.S. farmers. “We were being nice – until now!," threatened Trump; suggesting tensions are escalating on the Chinese front in the trade war.


Gold probed above the 9-day moving average at 1230.00, before slipping back into the range, leaving Monday’s high at 1235.14 intact. A push above the latter — and close above the former — would shift focus to the 20-day MA at 1242.00 today.


20180725 Gold Chart


At this point, the downside remains highlighted and a case can be made for an ascending wedge. Such a chart formation is typically a continuation pattern within the dominant trend. In this instance, the trend is negative with scope for a retest of the 1211.52/1204.72 lows which are bolstered by the midpoint of the broader 1046.18/1375.17 range, which comes in at 1210.67.


Silver eked out another new high for the week 15.62, but continues to straddle its 9-day MA (15.54 today). A close above this level today would be constructive, shifting focus to the 20-day MA at 15.79. A close above the 20-day would lend some credence to a bottoming scenario, suggesting the 14.16 low from last July is going to be left untested. The 15.17 level (10-Jul-17 low and 19-Jul low) now defines key short-term support.


Platinum is trading higher for a fourth consecutive day, but price action today is confined to yesterday’s range. Keep an eye on the 20-day MA at 833.50 today. A close above this level would suggest potential for additional corrective gains toward the 858.8 (09-Jul high). On the other hand, another failure to closes above the 20-day MA would keep focus squarely on the downside.


While palladium failed to close higher yesterday, it did notch a close just above the 9-day MA. Today we’re seeing upside follow-through that has resulted in a challenge of the 20-day MA at 931.49.


20180725 Palladium Chart


We’ve seen several rather significant rallies in palladium — one approaching 20% — going back to the beginning of the year, but all have ended at lower highs and ultimately lower lows. A close above 931.49 today would suggest this rally has further to run.


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