Precious Metals Continue To Gain Ground on Weak US Greenback in Broad Market.Gold is reporting gains for a third straight day, courtesy of weak tone in the US dollar
Gold prices edged up on Friday to a one-week high as the dollar weakened on receding fears of a full-blown Sino-U.S. trade war, keeping the yellow metal on track for its first weekly gain in more four weeks. China’s measured response to new US tariffs earlier this week triggered hopes that a further escalation of trade war could be avoided. Spot Gold XAUUSD clocked an eight-day high of $1,211.05 earlier today and is currently trading at $1208.22 an ounce up by 0.10% on the day, while US Gold Futures GCcv1 are trading at $1212.80 an ounce up 0.12% on the day. New U.S. and Chinese tariffs on each other’s goods were set at lower rates this week than previously expected, rising hopes that hostilities between the world’s two largest economies may be easing.
Investors Focus on OPEC Summit This Weekend Before Placing Further Bets
Investors have been buying the dollar believing that the United States has less to lose from the dispute. But the dollar has weakened this week, with investor flows being diverted away from the greenback to its peers such as emerging market currencies as trade war concerns have ebbed. The dollar index is hovering near a 10-week low against a basket of major currencies while Investors await next week’s Federal Reserve meeting, where the U.S. central bank is widely expected to raise benchmark interest rates. Due to other external uncertainties including and not limited to trade tensions and a U.S. mid-term election within two months, it is possible that investors will be prepared to give the Fed more time for assessment of 2019 rate hike outlook. Meanwhile Spot Silver XAGUSD is trading at $14.41 up 0.63% on the day.
Crude oil futures were stable to slightly lower during mid-morning trade in Asia Friday as market participants adopted a wait-and-watch approach ahead of OPEC’s meeting in Algiers over the weekend to discuss future production policy. US President Donald Trump’s tweet on reducing oil prices also weighed on sentiment. OPEC and its partners will meet in Algiers this weekend to discuss production policy measures to offset any loss of Iranian crude barrels as a result of US sanctions that snap back in November. Iranian oil minister Bijan Zanganeh on Thursday said he would veto any OPEC deal that imperils Tehran’s oil market share, complicating the organization’s talks with Russia and other partners to institutionalize their supply management accord beyond this year. Sunday’s Algiers summit, the first formal meeting of the monitoring committee since OPEC, Russia and nine other non-OPEC partners on June 23 agreed to raise their collective production by 1 million b/d. Spot Crude WTIUSD is trading at $71.14/b up 0.82% on the day.