Gold Price Edges up on Subdued Demand for USD in broad marketPrecious metals edge up on subdued demand for US Greenback in broad market.
Gold edged up in broad market on early Asian market hours as demand for US dollar decreased, with markets showing little worry over the latest escalation in the U.S.-China trade war. The news on tariffs did not help the U.S. dollar and parallel gold strength likely reflects the markets having had this outcome mostly priced in since last week. China and the United States plunged deeper into their trade feud on Tuesday after Beijing added $60 billion in U.S. products to its import tariff list in retaliation for President Donald Trump’s planned levies on $200 billion in Chinese goods. Last’s modest recovery in emerging market assets, helped push up stocks more broadly which trimmed safe haven demand for the dollar.
Oil Holds Steady Despite Facing Turbulence From Gains in US Stockpiles
Investors have been buying the dollar in the belief the United States has less to lose from the dispute. But a spot of weakness in the dollar may indicate investors are starting to worry about the impact of the tariffs on the U.S. economy. As of writing this article, Spot Gold XAUUSD is trading at $1202.79 an ounce up 0.37% on the day, while US Gold Futures GCcv1 was trading at $1206.90 an ounce up 0.33% on the day. Meanwhile DXY – the index which measures US Greenback’s strength against six major global pairs was at 94.54 down by 0.08% on the day. Spot Silver XAGUSD is trading at $14.21 an ounce up 0.47% on the day.
Oil prices were steady in late Asian market hours as concerns that producers will not be able to respond to a shortfall in supply once U.S. sanctions on Iran are enacted outweighed a gain in stockpiles in the United States, the world’s biggest oil user. Reuters reported on Sept. 5 that Saudi Arabia wants oil to stay between $70 and $80 a barrel to keep a balance between maximizing revenue and keeping a lid on prices until U.S. congressional elections. The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers, including the world’s biggest producer Russia, are meeting on Sept. 23 in Algiers, Algeria, to discuss how they can allocate supply increases within their quota framework to offset the loss of Iranian oil supply as U.S. sanctions affecting Iran’s petroleum sector will come into force from Nov. 4. Spot Crude WTIUSD is currently trading at $70.17/b up 0.52% on the day.