Gold Turns Range Bound Despite Strong Dollar amid Trade War WoesGold Range-bound as dollar lacks the strength to make breakout despite cues from trade war proceedings between China and US while Crude oil price goes up on news of Hurricane Florence and Libyan shooting.
Gold was steady on Wednesday, failing to break from a narrow trading range as investors remained concerned about a simmering trade war between the United States and China. The trade conflict between Washington and Beijing has prompted investors to buy the U.S. dollar in the belief that the United States has less to lose from the dispute. But it looks like gold will remain in a sideways trend until something forces it either way as short-term traders continue to buy small quantities of gold taking advantage of news-driven volatility which has been keeping gold price near 2018 lows.
As of writing this article, Spot Gold XAUUSD is trading at $1196.53 an ounce down 0.19% on the day, while US Gold futures GCcv1 is trading at $1201.70 an ounce down 0.04% on the day.
Crude Oil Price Bullish Supported by Reports of Hurricane Florence’s Impact on energy Production and Libyan Shooting
Gold has been stuck in a $20 price range over the past two weeks, with investors looking for technical breakouts for clues on further movements. Gold has lost out to the dollar in a battle for safe-haven flows as a firmer dollar makes gold more expensive for holders of other currencies.
Investors are awaiting new moves to see if bullion can prolong the weak recovery seen in the second half of August, even if the main trend still appears bearish. The U.S. central bank is widely expected to raise benchmark interest rates at its September meeting and expectations are growing for one more hike in December on positive economic data. Higher rates increase bond yields, making non-yielding bullion less attractive, and tend to boost the dollar in the broad market. Spot Silver XAGUSD is trading at $14.16 up 0.14% on the day as silver has remained relatively neutral to dollar’s momentum in recent past.
Crude oil prices soared – scoring the largest daily gain in nearly eight months – amid worries that hurricane Florence will disrupt energy production infrastructure. API data showing inventories shed 8.64 million barrels, the most since July, amplifying upward pressure.
Meanwhile, the upbeat crude oil price was supported by reports of shooting attack on the headquarters of Libyan state oil company NOC in Tripoli. Outside the United States, traders have been focusing on the impact of U.S. sanctions against Iran that will target oil exports from November. Iran is increasingly becoming the preoccupation of the crude market. The last couple of weeks have seen the expected squeeze on Iranian crude flows taking shape, with overall outflows down markedly. Spot Crude WTIUSD is trading at $70.12 up 0.03% on the day