Gold and silver were choppy overnight, trading both sides of unchanged, as the markets were looking ahead to the ECB meeting on Thursday.

China has announced it will suspend certain tariffs on US imports for year, including some agricultural products like insecticides and feed, as well as drugs. There were reports that the exemptions were meant to reduce the trade impact on American companies in China and also to deal with some of their internal agricultural problems like swine fever and fall armyworm.

While it could be viewed as an accommodation ahead of the US/China trade talks, the fact that the suspensions did not include soybeans or pork suggests that the motivations were internally focused and not necessarily an appeasement to the US demands.

Spec positions in gold and silver are heavily long, which leaves the market vulnerable to liquidation as support levels are taken out, but with the trade anticipating that the ECB will cut rates, the market has found some support.

Such a move by the ECB could increase the pressure on the Fed to cut rates as well. We look for more back and forth action as we get into the ECB and FOMC meetings later this week and into next.

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