Gold Loses Luster as US Treasury Yields Spike

Gold prices posted a six-month low on Thursday, weighed down by a firm dollar and as the U.S. Federal Reserve Chair kept its outlook for higher interest rates. Spot gold fell 0.4% to $1,262.88 an ounce by 06:37 GMT. It hit its lowest since Dec 20 at $1,261.36 earlier, having lost about 3% over the last five sessions. US Gold futures for August delivery were also down by 0.8%. Yellow metal is expected to continue moving downtrend as dollar index continues to gain strength and remain significantly higher against major global peers. A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies and so XAUUSD is expected to continue moving downwards in near future.
Silver also saw similar dovish decline value across this week’s trading session as Greenback continues to grow strong.

Gold Still Falls

The XAGUSD pair is currently trading at $16.23 price handle well below 30 day lows. Major dovish influence for the silver pair comes from slide in India & Singapore two major markets where silver is highly traded. With US Greenback continuing to grow strong post positive comments from Fed Chair Jerome Powell this week is expected to remain bearish across the week for both Gold and Silver.

The Organization of the Petroleum Exporting Countries is hosting a number of events in Vienna this week. And the meetings set for Friday and Saturday is expected to yield decisions on crude production that could shake up the oil market. Oil prices moved range bound on early Thursday as Iran signaled it may support a small rise in OPEC crude output, possibly paving the way for the producer cartel to agree a supply increase. At the time of writing, Brent crude traded at US$75.60 a barrel, with West Texas Intermediate changing hands at US$65.77 a barrel, both up moderately from yesterday’s close. Oil markets are bracing for a reshuffle of global trade flows as China threatens to impose tit-for-tat tariffs on imports of U.S. energy products, including crude.

China, which has bought an average 330,000 barrels per day (bpd) of U.S. crude oil this year, is threatening to place a 25 percent tariff on various U.S. commodity exports, including crude oil in response to U.S. President Donald Trump saying he was pushing ahead with hefty tariffs on $50 billion of Chinese imports. China has never feared US sanctions maintaining good trade relations with N.Korea despite US being at logger heads with N.Korea. If Trump continues to remain hostile or push tariff China is expected to move to Iran for Oil Imports which would help the country feel less weightage from US Sanctions while US Oil industry would lose over $1 billion per month on losing Chinese Crude Oil trade activity.