Gold and silver appear to be on a fulcrum, as some renewed optimism on trade is offering pressure but the upcoming Brexit vote(s) in Parliament is adding a level support.

President Trump said China has indicated that negotiations over an initial trade deal are advancing, raising expectations the nations' leaders could sign an agreement at a meeting next month in Chile. This followed comments yesterday from China Vice-Premier Liu expressed similar optimism.

There are two crucial votes today in Parliament, one about accepting the Brexit agreement and the other regarding the timeline, and it would appear that gold could fall off sharply if the votes succeed and rally if the votes fail, especially since the deadline for the exit is only nine days away.

ETFs were buyers of gold yesterday, and holdings have reached the highest level in 12 months. This is in contrast to managed money traders, who have liquidated some of their positons in recent weeks, and at least one commentator remarked that this is a recipe for volatility.

Recent Fed commentary has been mixed about whether a rate cut is necessary, but the Fed Funds were giving an 87% chance of a 25 basis-point cut at the October 29-30 meeting yesterday.

The IMF is estimating that the trade war between China and the US will reduce global growth to 3% in 2019, the slowest pace in a decade. Factors like potential rate cuts lurk in the background, but we expect the Brexit vote to be the most consequential event today.

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Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.