Geo-Political Woes And Weak Dollar Underpin Demand For Precious Metals

Precious metals continue to trade positively in the broad market on weak US Dollar. Dollar-denominated instruments always see positive price action when the greenback weakens. Last night saw US Treasury Yields decline as news of lawsuits against Us President Trump’s move to declare national emergency hit market. As per reports, nearly 16 states have filed a lawsuit against the declaration of national crisis calling it an abuse of power to circumvent Congress and divert funds for his border wall project. This has greatly weakened the dollar in the broad market. Weak USD makes it easier for participants across the globe to purchase gold owing to lower exchange rates.

US Shale Output Limits Crude Oil Bulls

Along with weak USD, a significant part of investors continues to invest in gold in order to safeguard their funds from the possibility of Sino-U.S. trade deal falling apart. Further Brexit deadlines approach with each passing day while there is also the threat of US tariff on European auto market which is viewed as a possibility for another trade war erupting while the first one is yet to be resolved. Cues from multiple political woes across the globe provide a steady foothold for precious metal bulls which have been highly active for quite a while now. As of writing this article, spot gold XAUUSD is trading at $1343.9 per ounce up by 0.34% on the day having hit a new intra-day / 10-month high of $1346.73 per ounce earlier in the day.

Spot gold has been trading range bound well above $1340 handle post hitting new intra-day high. Meanwhile, US Gold futures GCcv1 is trading at $1346.60 per ounce up by 0.13% on the day while spot silver XAGUSD is trading at $16.01 per ounce down by 0.12% on the day.

Crude oil has been trading positive in the global market however gains have been limited. While OPEC production cuts and US sanctions on Venezuelan/Iranian Crude oil continue to underpin bulls and keep price action steady near 3-month highs hit recently, news of Russia possible dropping out of OPEC production cut agreement and data from the USA which hint at continued production of Shale from US market well near record highs continue to limit Crude oil bulls.

Increased oil supply from the US offsets supply reduction from OPEC cartel leading to relatively healthy supply for ongoing demand and this has resulted in rangebound price action in crude oil future market.

Meanwhile, Spot US crude oil WTIUSD is trading at $56.22 per ounce up by 0.34% on the day.