Precious Metals Edge Up on Geo-Political & Trade War Woes but Remains near Monthly Lows

Gold prices inched up on Friday but remained on course to rack up their longest monthly losing streak since 2013, hit by worries over lingering U.S.-Sino trade tensions. Spot Gold XAUUSD is trading at $1206.82 an ounce up 0.56% on the day as of writing this article, while US Gold Futures GCcv1 is trading at $1212.90 an ounce up 0.65% on the day. Prices are down 1.7% so far this month, on track for a fifth straight monthly decline. As $1,200 is always a psychological level, there will be some battle to regain that … It is going to be critical whether prices are going to close above or below that level today. Analysts and traders said gold would closely track moves in the dollar, in which the metal is priced, especially with investors bracing for the next round of the U.S.-China trade conflict. Gold price has declined about 7.7% so far this year amid international trade disputes and the Turkish currency crisis, with investors preferring the dollar as a safe-haven.

Upside Move Limited For Precious Metals As Profit Booking Activity Ahead of Long Weekend Could Erase Gains

The greenback was boosted overnight by data that showed U.S. consumer spending increased in July. An increase in number of similar headlines hitting market across globe on geo-political and trade war woes will likely force another dollar rally which could pressure precious metals even further. Investors have for now increased their short term bets to cash in end of week liquidity ahead of the long Labor Day weekend in the U.S. The ongoing outflows from ETFs, record high speculative shorts and upbeat U.S. economic data are still the major headwinds for precious metals and signify the recovery might be short lived. Spot Silver XAGUSD was trading at $14.68 an ounce up 0.96% on the day.

Oil is on track for a second consecutive week of gains, after two months of losses. Oil prices have climbed 10 percent in the past two weeks, and the big question is whether or not the momentum can continue. The reasons for the recent rebound are multiple. First, from the perspective of the physical market, there have been recent bullish data points that suggest the market is tightening. The latest EIA report revealed a surprisingly strong decline in crude oil inventories, gasoline inventories and also higher gasoline demand. Oil prices popped on the news. Iran is also back on the front burner. The U.S.-China trade war and the Turkish lira crisis have sucked up a lot of oxygen this summer, but the countdown to the implementation of oil-related sanctions on Iran continues. In addition to the physical market, the fall back in the dollar has helped add a bit of upward momentum to crude oil, since oil is priced in dollars. Spot Crude WTIUSD was trading at $70.58 down 0.13% on the day as of writing this article.