Gold Steady Above $1300 Handle Despite Dovish Price ActionPrecious metals hold steady near multi-month highs hit earlier this week despite seeing some declines on increased risk appetite in broad market.
Precious metals are trading red as profit booking activity and optimism surrounding China & U.S. trade talks boosted risk appetite to some extent. While headlines hinted that if deal is not reached before deadline of March 1, 2019 China is likely to see further tariff’s imposed on their goods, comments from U.S. President Donald Trump who expressed hopes for positive progress and possibility of trade deal when he meets with Chinese Premier Xi Jinping late in February, improved risk appetite in broad market. Sharp declines were prevented owing to the lingering influence of dovish Fed stance on U.S. dollar in the broad market and disappointing macro data in China which resulted in mixed price action across major Asian and European markets. However, a look at the price action in weekly charts suggests that despite today’s declines, gold is still on the path to see second consecutive week of gains.
Crude Oil Failed To Hold Position Above $55-PB
Also, headlines indicate at the possibility of further dovish market performance as E.U. & U.S. trade negotiations are expected to be held later this month and outcome for same doesn’t paint a favorable picture. Brexit is also on the path for no-deal exit and most major economies are seeing a slowdown in activity and growth outlook. All these paint a dovish medium to long term market outlook which suggests precious metals are likely to see steady demand over expected prolonged safe-haven demand in the broad market. This has helped both gold and silver trade near multi-month highs hit earlier in the week despite trading in the red. As of writing this article, spot gold XAUUSD is trading at $1320.97 per ounce down by 0.08% on the day while U.S. gold futures GCcv1 was unchanged at $1325.20 per ounce.
Meanwhile, spot silver XAGUSD is trading at $15.97 per ounce down by 0.56% on the day. Crude oil price saw a short burst of bullish activity during American market hours as optimism surrounding Sino-U.S. trade talks boosted demand temporarily despite headlines clearly indicating that trade deal between two parties has been delayed further. Price breached $55 price handle in both spot and futures market. However, concerns of a further slowdown in the economy and disappointing macro data updates from China in Asian market hours resulted in crude oil price action resuming its dovish price action. As of writing this article, spot US Crude oil WTIUSD is trading at $53.59 per barrel down by 0.43% on the day.