Gold Gains on Risk Averse Trading Activity in Global Markets

Gold trades steady on risk averse trading activity in Asian and European markets today. Both equities and forex markets suffered dovish price action as Chinese economic outlook continues to hurt investor sentiment at start of the day. However headlines from European markets continue to remain as main driving force behind global safe haven demand. At start of the week investors focus was on Brexit vote in UK parliament which was then followed by dovish comments from European Central Bank President Mario Draghi who warned European law makers that economic growth is slowdown. European market also saw no-confidence vote on Greece and UK Prime Ministers who won in the move against them.

Headlines Relating To European Market Continues To Play Major Role in Safe Haven Demand

However headlines from US last night which hinted at possibility of imposing tariff’s on European auto market in order to force them into considering opening Agriculture market is their trade negotiation caused investors sentiment to turn dovish even more so than at the start of week. While US Dollar is recovering in broad market owing to broad based risk asset sell off and rising US Treasury Yields, the upside is not significant as partial shutdown of US government still weighs down US Greenback in broad market. As USD remains weak despite slight pick up, precious metals are able to hold their fort for time being. As of writing this article, Spot Gold XAUUSD is trading at $1294.31 per ounce up by 0.05% on the day, while US gold future GCcv1 were unchanged at $1293.80 per ounce despite some action early in the day.

Meanwhile spot Silver XAGUSD is trading flat at $15.589 per ounce down by 0.07% on the day. Crude oil is trading with significant decline today following release of US Crude oil inventory data. While forecast hinted at slight draw in stockpile actual data displayed unexpectedly high stockpile compared to previous reading which hints at continued record production output in US market. This news caused oil price to decline by more than 1% in both spot and futures market. As of writing this article, spot crude oil WTIUSD is trading at $51.70 per barrel down by 1.19% on the day.