Precious Metals Continue Bullish Price Action Ahead of US FOMC UpdateGold hits 8-month highs as brexit chaos boosts demand for safe-haven assets in the broad market ahead of US FOMC update and Sino-U.S. trade talks.
Precious metals continue to trade positive supported by the overwhelming demand for safe-haven assets in the last 24 hours. As mentioned in yesterday’s article, prevalent safe-haven demand continued to sustain gold bulls and helped yellow metal breach 8 months high. While safe-haven demand helped underpin gold’s demand and maintain steady action near 7-month high the key factor that pushed gold to breach 8-month high is the outcome of UK parliament session. Yesterday parliament meeting resulted in Brexit proceedings falling back to Chaos as both PM May and Labor Party failed to get their amendments approved completely and PM May has been forced to renegotiate Irish Backstop while EU isn’t ready to budge resulting in investor sentiment turning cautious and creating high demand for safe-haven assets.
Oil Continues Positive Action On Lingering Influence From US Sanctions on Venezuelan Crude Oil
Further Greenback is trading dovish in the broad market owing to investors’ expectations of US Fed pausing rate hike plans for 2019. This has also boosted the participation of investors from emerging markets owing to low exchange rates. However, there is relatively low activity in major markets for gold such as China and India as the price in the spot market has hit multi-month highs. Further escalating tensions in the broad market owing to Sino-U.S. trade talks which is set to begin later today and investors’ reluctance to place major bets ahead of today’s US FOMC interest rate update also underpin demand for precious metals in the broad market. As of writing this article spot gold XAUUSD is trading at $1313.01 per ounce up by 0.10% on the day having hit an intra-day high of $1315.94 per ounce while US gold futures GCcv1 were trading at $1311.60 per ounce up by 0.20% on the day.
Meanwhile, spot silver XAGUSD is trading at $15.92 per ounce up by 0.56% on the day. Crude oil continues to trade positively in the broad market as bulls still gain support from lingering influence of US Sanctions on Venezuelan crude oil. Spot market saw crude oil price rise by 2% yesterday owing to news of US sanctions which created some level of concerns about supply disruptions. But given record output from U.S. markets concerns eased prevented further gains in crude oil. The main imported of Venezuelan Crude oil are refiners from the U.S. and owing to recent political instability in Venezuela that resulted in decreased output US market has already begun looking at other crude producers for balancing supply disruption so it didn’t as high an impact on sanctions on Iranian Crude oil in the broad market. Spot US Crude Oil WTIUSD is trading at $53.48 per barrel up by 0.81% on the day.