3rd May 2017

 We had a very quiet day in the precious metals group on Tuesday, with gold finishing slightly higher, while the rest finished mixed. Earlier in the day, however, gold was under pressure, with prices trading down to a three-week low $1252 at one point. A stronger dollar contributed to the weakness, this after the greenback rose to a six-week high against the yen. In addition, a softer tone in crude was another negative for gold since it further contributed to the narrative of falling inflation -- now increasingly evident in a number of countries. Oil prices lost more than a $1/barrel on account of unease about the OPEC cuts, higher Libyan production and surging US output. We suspect that fund selling also contributed to the selloff given the recent accumulation of length in both crude contracts over the past two weeks. Late in the day on Tuesday, crude prices recovered after the API inventory numbers came out showing a surprising draw of 4.2 million barrels