U.S. launches over 50 Tomahawk cruise missiles at Syrian airfield tonight.
There’s a new sheriff in town, and President Trump sent a strong message to that effect to the hideous Assad regime in Syria this evening as U.S. warships launched at least 50 Tomahawk missiles at a Syrian airfield in response to a chemical weapons attack 2 days ago that killed dozens of civilians and injured hundreds more. This is the first direct U.S. assault on the Damascus government since the beginning of that country’s bloody civil war in 2011, despite President Obama’s infamous “red line” that was crossed (with no consequences) after Assad’s earlier use of chemical weapons.
The strike, ironically, came as Trump was hosting Chinese President Xi Jinping in meetings focused in part on another pressing U.S. security dilemma – North Korea’s nuclear program. Trump’s actions in Syria signal to China, and other nations, that the new President means what he says and isn’t as reluctant as his predecessor to flex American military muscle, even on a unilateral basis, if and when necessary.
Speaking at his Florida resort following dinner with the Chinese leader, Trump stated: “Tonight I ordered a targeted military strike on the airfield in Syria from where the chemical attack was launched. It is in this vital national security interest of the United States to prevent and deter the spread and use of deadly chemical weapons. There can be no dispute that Syria used banned chemical weapons, violated its obligations under the chemical weapons convention, and ignored the urging of the UN Security Council. Years of previous attempts at changing Assad’s behavior have all failed and failed very dramatically. As a result the refugee crisis continues to deepen and the region continues to destabilize, threatening the United States and its allies…Tonight I call on all civilized nations to join us in seeking to end the slaughter and bloodshed in Syria, and also to end terrorism of all kinds and all types…We ask for God’s wisdom as we face the challenge of our very troubled world.”
Gold’s Response
The Syrian Sandbox is a “powder keg” featuring multiple countries, including bad actors Russia and Iran, and a myriad of radical Islamist terrorist groups. Tonight’s events mark a dramatic change in U.S. foreign policy, and one that’s not without risk for America and the world at large.
As expected, Gold responded bullishly to news of the U.S. action tonight, climbing as high as $1,270. As of 9:00 pm Pacific, bullion is up $11 an ounce at $1,263. The key will be for Gold to hold its gains and even add to them tomorrow for a strong close to the week, preferably above stiff resistance at the 200-day moving average (SMA) at $1,261 (U.S. jobs report comes out in the morning and could very well give Gold the additional lift it needs).
Would it not be the ultimate irony if the Trump administration, accused by so many discombobulated liberals of “collusion” with the Russians during last year’s U.S. election campaign, were to get into some sort of confrontation with the Putin regime over the situation in Syria?
Secretary of State Rex Tillerson said tonight that Russia has “failed” in its responsibility to deliver on a 2013 commitment to secure Syria’s chemical weapons. He added that Russia has either been complicit or “simply incompetent” in failing to deliver on its end of the agreement that was struck after a 2013 chemical weapons attack.
Gold 9-Month Daily Chart
While Gold has broken out above a downtrend line that formed after last summer’s high, the metal has been struggling with its 200-day SMA since February with multiple failed attempts to push through it.
Tonight’s events could very well change that.
Our broad take on Gold’s technicals, based on constructive overall chart patterns, has been that a breakout through the $1,260’s is inevitable – the only question being the exact timing.
It’s notable that over the past 2 decades, April has been a winning month for Gold 68% of the time (no other month has been better in that respect).
Buy pressure (CMF) has increased to its best levels of the year this month, the ADX indicator confirms a bullish trend, while RSI(14) at 59% has ample room to move higher.
First major resistance after the mid-$1,260’s is $1,300.
Base metals got a lift today as China returned from a 2-day holiday to buy up metals following brighter global manufacturing reports, while Zinc and Nickel tracked a rally in steel…factories across Europe and much of Asia posted another month of solid growth in March, rounding off a strong quarter for manufacturers overseas, while the U.S. economy continues to pick up steam – much to the astonishment of the alt-left, anti-Trump propaganda press…
