Precious Metals Decline on Sino-U.S. Trade Optimism

Precious metals continue to decline for third consecutive trading session on optimism surrounding Sino-U.S. Trade talks. The weekend saw headlines hinting at an extension of the deadline for finalizing trade deal between China & U.S.A. which was followed by a tweet from U.S. President Donald Trump who stated that talks were proceeding in a positive direction. Further, news hit the market that E.U. is ready to extend Brexit deadline till 2021 just as UK Parliament is set to meet and discuss critical proceedings and this further increased risk appetite in the broad market on hopes of an extension of article 50 deadline. As risk appetite got a boost, major assets traded positive taking away fund flow from precious metals.

Crude Oil Recovers But Gains Limited

Meanwhile, profit booking activity also continues to chip away at precious metals gains. But US Greenback in which the precious metals are denominated is also weak and this has helped limit loss to a great extent. For now, the price is expected to continue declining but will still remain above critical price levels as a great deal of investment has gone into the precious metal market in recent past to safeguard investment from unstable geo-political even proceedings and investors are yet to touch a major part of the investment. As UK parliament session starts and deadline for China-U.S. trade deal nears with each passing day, unless official government order is released stating the deadline is released or clear details on what was discussed in trade talks is published, investors caution is likely to cause gold and silver to reclaim most of the loss suffered today and over last two trading sessions.

As of writing this article, spot gold XAUUSD is trading at $1323.68 per ounce down by 0.28% on the day, while US gold futures GCcv1 were 1.326.40 per ounce down by 0.24% on the day. Meanwhile, spot silver XAGUSD is trading at $15.80 per ounce down by 0.60% on the day. Crude oil price today reclaimed some of previous session loss as the market recovered from rally inspired by Trump’s weekend comments warning against high oil price. Indian attack on the terrorist base in Pakistan failed to have any impact on crude oil price as headlines hinted that Pakistan is unlikely to retaliate immediately. However, the upside move was capped below $56 handle as investors wait for clarity on Sino-U.S. trade talks proceedings with more details before deadline approaches. Spot US crude oil WTIUSD trades at $55.41 per barrel up by 0.53% on the day.