Gold Retreats Post Hitting Two Week High

The XAUUSD pair saw price movement take a steep dive post hitting two weeks high of $1265.90 and the price went as low as $1257.06 as North American market hours came to a close. However political uncertainties over Brexit and steady US dollar near its three-week lows have helped the pair remain above crucial support of $1250 price handle and the price action for the majority of Asian market hours today has been range bound with the price of the pair hitting intra-day high and low at $1260.31 & $1254.90 respectively.

U.S. gold futures for August delivery were nearly unchanged at $1,259.90 an ounce as of 0357 GMT. U.S. President Trump’s assertion that China was impeding North Korean progress on denuclearization has provided some support for gold. The dollar was little changed against a basket of six major currencies on Tuesday after dropping to its lowest since mid-June in the previous session.

President Donald Trump suggested on Monday that China might be seeking to derail U.S. efforts aimed at denuclearizing North Korea, but said he was confident that North Korean leader Kim Jong Un would uphold a pact the two agreed on last month. The ongoing trade war is finally looking like it’s going to affect precious metals as the yellow metal saw an increase in net long position on Monday. Silver was less affected in comparison to Gold in that the XAGUSD pair has managed to secure its momentum above $16 price handle and the pair is expected to continue stable price action above $16 handle as long as global currencies have upper hand against US Greenback.

Oil prices rose on Tuesday on escalating concerns about potential supply shortages, with Brent crude leading the way as hundreds of oil workers in Norway are set to strike later in the day after failed wage talks. The Canada production outage may also last till September and the country is losing 360,000 barrels per day. That is where the US crude oil prices are getting their support from.

More Europe and Asian countries are now cutting down their Iran oil purchase, this is also adding the premium to prices. U.A.E. Energy Minister Suhail Al Mazrouei mentioned today that OPEC has enough capacity to offset output shortfalls. He also said “OPEC alone cannot be blamed for all the problems that are happening in the oil industry, but at the same time we were responsive in terms of the measures we took in our latest meeting in June” in response to US President Donald Trump’s accusations on OPEC driving oil prices higher. WTIUSD pair is currently trading at $74.20 per barrel.