Gold Edges Up On Weak USD Owing to Disappointing US Macro Data

Gold rose on Friday as the dollar faltered after softer-than-expected U.S. inflation data dimmed the case for a faster pace of policy tightening by the U.S. Federal Reserve, amid signs of movement in the Sino-U.S. trade standoff. U.S. consumer prices rose less than expected in August and underlying inflation pressures also appeared to be slowing, suggesting the Federal Reserve’s pace of rate hikes could slow. the data falling short of expectations, investors are thinking that the Fed may not go for a rate hike in December, even though a hike in September is definite. As of writing this article, Spot Gold XAUUSD is trading at $1205.87 an ounce up 0.36% on the day after having hit its highest since Aug. 28 at $1,212.65 during North American market hours yesterday, while US Gold Futures GCcv1 is trading at $1210.10 an ounce up 0.20% on the day.

Crude Oil Price To Remain Hawkish Supported By Supply Issue Woes

The dollar’s index against a basket of six major currencies was a shade lower at 94.442 after slipping to a session low of 94.427, a bottom since July 31.The months-long trade rift between Washington and Beijing has prompted investors to buy the U.S. dollar in the belief that the United States has less to lose from the dispute. However, the demand for the dollar eased this week on news that the White House had invited Chinese officials to restart trade talks. Beijing welcomed the invitation with the two countries now reported to be discussing the details. Trade negotiation is a favor to the (gold) market with the dollar a little bit soft and some shorts being covered. There is also some physical buying in Shanghai, with premiums rising. Spot Silver XAGUSD is trading at $14.229 up 0.37% on the day.

Oil futures rebounded during mid-morning trade in Asia Friday as lingering supply constraints overshadowed a lower demand growth forecast by OPEC. Prices had dipped Thursday amid profit taking, but even then analysts had noted that the short-term outlook was bullish. Crude oil price remains well supported as the market continues to fret about ongoing structural supply issues. Risk premiums lingered ahead of the re-introduction of US sanctions on Iran. S&P Global Platts Analytics estimates showed the market could lose around 1.4 million b/d of Iranian crude by November as buyers shift their allocations for fear of breaching US laws. OPEC’s latest survey of production on Wednesday showed Iranian output sliding to 3.6 million b/d in August, a more than two-year low. Concerns over Libya’s oil exports being disrupted by violence have also continued to support global oil prices. Spot Crude WTIUSD is trading at $69.14/b up 0.17% on the day.