Gold Price Steady As Greenback Remains Relatively UnchangedGold prices were steady on Tuesday, as the U.S. dollar remained largely unchanged ahead of U.S. Federal Reserve Chairman Jerome Powell’s first congressional testimony.
XAUUSD was up 0.1% at $1,241.20 an ounce at 0420 GMT, while U.S. gold futures for August delivery were up 0.1% at $1,241.60 an ounce. The dollar index was steady against major peers on Tuesday, as investors awaited Federal Reserve Chairman Jerome Powell’s first congressional testimony for any clues on the pace of U.S. interest rate rises.
Fed’s Powell takes his upbeat view of the U.S. economy to Capitol Hill on Tuesday, with markets and many of his colleagues expecting two more interest rate increases this year amid a continued economic expansion. U.S. rates tend to boost the dollar, in which the metal it is priced. Looking at current price action and investment trend gold is expected to trade sideways in long term. Gold and Silver investment in the majority is influenced by high volatility from the US, China, and some Asian countries. The ongoing trade war has soured investor sentiment in China with local currency value seeing a decline.
Sustained trade conflicts following U.S. tariff actions threaten to derail the economic recovery and depress medium-term growth prospects, the International Monetary Fund warned on Monday. China is slowing down, there will be consequences to global commodity consumption and that’s going to drag gold down as well.
Similarly, Silver which is highly influenced by Asian markets is currently at a standstill in $15 handle as US Greenback has a positive outlook in long-term with two rate hikes priced in within this year which makes dollar-denominated Silver a costly investment with no interest gains thereby appearing less attractive to investors. XAGUSD pair is currently trading at $15.87 seeing 0.36% increase in value as Dollar has been weaker the last few sessions which have resulted in short-term bids but seeing limited upside momentum.
Oil prices slipped earlier on Monday dropping about $3 a barrel, as concerns about supply disruptions eased and Libyan ports reopened. U.S. Treasury Secretary Steve Mnuchin said some oil buyers could get waivers to continue buying Iranian supplies despite American sanctions on the Middle Eastern country.
Mnuchin told the reporters the Trump administration wants to avoid roiling global oil markets as it seeks to pressure Iran to make concessions on its nuclear program, ballistic missile tests and its role in regional conflicts. President Donald Trump withdrew the United States from the 2015 Iran nuclear deal and restored sanctions on Tehran in May. U.S. West Texas Intermediate crude oil prices ended Monday’s session down $2.95, or 4.2% at $68.06. WTIUSD has fallen for two weeks in a row, dropping from a 3½-year high above $75 a barrel and is currently trading at $68.20 with 0.24% increase in value.