Gold Stable above $1200 Handle on Weak US Greenback

Gold prices held steady on Monday after seeing their best gain in over a year the session before, boosted by short-covering and as comments from the head of the U.S. Federal Reserve signaling a gradual approach to interest rate hikes weighed on the dollar. Speaking at a research symposium at Jackson Hole, Wyoming on Friday, Fed Chair Jerome Powell made the case that gradual rate hikes were the best way to protect U.S. economic recovery, keep job growth strong and inflation under control.

As of writing this article, Spot Gold XAUUSD is trading at $1203.65 down 0.19% on the day maintaining stable support around $1200 handle while US Gold futures GCcv1 is trading at $1210.70 down 0.21% on the day. While Dollar lost its safe haven approach among investors across globe post dovish Powell’s speech, risk appetite has returned to market which resulted in Gold taking a range bound movement. If Dollar’s weakness continues to persist in long-term, events that cause geopolitical fear in future should boost precious metals.

OPEC Meet Eyed For Clues on Crude Oil Price Action in Medium to Long Term

The reason US Greenback could see continues weakness in future is because of US President Donald Trump’s actions which undermine bullish influence on US Greenback from Fed rate hikes. Trump has announced that US will buy Italian debt bonds which are scheduled to be released in 2019 which would weaken US Greenback in the broad market.

The Treasury yield curve reached its flattest level since 2007 on Friday on dovish Powell’s speech. As Dollar remains weak in the global market, dollar-denominated precious metals could see some level of activity. Spot silver XAGUSD is trading at $14.80 down 0.09% on the day.

Oil prices fell on Monday on concerns the U.S.-China trade dispute will erode global economic growth, although looming U.S. sanctions against Iran’s oil sector kept crude from falling further. Meanwhile, mild profit-taking activity following the surge during Friday’s trading session on the back of the fall in US rig count also added bearish influence to Crude oil. Looking ahead, a meeting of the OPEC+ Joint Technical Committee is in focus.

Representatives of the cartel and like-minded producers will analyze compliance with the updated coordinated production cut regime since output quotas were increased in late June. Renewed sanctions on Iran, a slowdown in Saudi exports and one-off disruptions elsewhere may have undermined the planned increase in supply. If so, crude oil prices may rise. Evidence suggesting producers were able to ramp up shipments despite assorted complications might prove to punish, however. Spot Crude WTIUSD is trading at $69.12/b down 0.33% on the day.