Demand for Safe Haven Spikes as Tension Increases in Middle East
While global currencies continue to remain strong, the last three trading sessions including today has seen some increase in activity among safe haven instruments such as Gold & Silver. The economic data has been dovish in United States in last three days and post three weeks on bullish US dollar, global currencies have started gaining momentum. One of the main reasons for the weak US dollar is disappointing US inflation data and another main reason being increase in conflict between IRAN and ISRAEL post US President Donald Trump’s decision to pull out of the nuclear pact with IRAN. This has resulted in gold and silver seeing a small uptrend momentum during the last three days. XAUUSD is currently trading at 1324.70 and when taking current position of US dollar and various global events into account we can expect gold price to go as high as 1326.45 as trading session closes for this week. Similarly XAGUSD is currently trading at 16.795 and is expected to go as high as 16.880 when trading session closes for the week.
Tension in the Middle East is reaching new heights as conflict between Iran & Israel continues and with recent missile launch last Wednesday, risk for open war has increased. This along with recent increase in demand for Oil has caused Crude Oil price to reach new 3 ½ year highs. WTIUSD is currently trading at 71.45 bbl post reaching high of 71.87 bbl during American market hours yesterday. The latest EIA data showed that the US crude inventories fell by 2.2 million, this along with prospect of tightening supplied post sanctions that could be imposed by US onto Iran has resulted in Crude Oil seeing bullish spike in price. WTIUSD is expected to close for the week above $70 in a range of $70 to $71. Traders are likely to take some profits as we head into the weekend.