Precious Metals Erase Early Gains and is on Steady Decline over Strong US Greenback

Gold prices edged higher on Monday towards a 2-1/2-month peak hit last week as the dollar eased and worries over rising political tensions and slowing global economic growth lent support to the metal. However yellow metal lost all its gains and took a steep bearish nose dive as US Greenback regained strength in broad market in late Asian market hours.

As of writing this article, Spot Gold XAUUSD is trading at $1222.86 an ounce down by 0.28% on the day while US Gold futures GCCv1 is trading at $1225.90 an ounce down by 0.22% on the day. While it is unlikely for Gold price action to go on sudden steep upward, short-term outlook has a potential for a bull run in yellow metals price action owing to factors such as global economic slowdown and geopolitical uncertainties.

Brent Crude Back Above $80/b On Escalating Tensions Between US & Saudi Arabia

The outlook for global growth in 2019 has dimmed for the first time, according to Reuters polls of economists who said the U.S.-China trade war and tightening financial conditions would trigger the next downturn. Meanwhile, concerns including tensions between Saudi Arabia and the West over the killing of journalist Jamal Khashoggi, developments related to Brexit, and Italy’s budget woes are keeping investors interested in gold, analysts said. Since gold is seen as a safe store of value during political and economic uncertainty there is a high possibility that gold price could get back.

Trade concerns between the U.S. and China remain elevated and the ongoing U.S.-Saudi tensions are likely to continue to underpin a bid tone for precious metals over the near-term. Spot Silver XAGUSD is currently trading at $14.60 an ounce down 0.25% on the day.

Oil edged above $80 a barrel on Monday, lifted by nervousness over a worsening diplomatic crisis between Saudi Arabia and the West, just two weeks before U.S. sanctions potentially choke off Iranian crude supplies. Saudi energy minister Khalid al-Falih told Russia’s TASS news agency that his country had no intention of unleashing a 1973-style oil embargo on Western consumers but rather was focused on raising output to compensate for supply losses elsewhere, such as Iran.

Several U.S. lawmakers have suggested imposing sanctions on Saudi Arabia over the killing of Saudi journalist Jamal Khashoggi, while the kingdom, the world’s largest oil exporter, pledged to retaliate to any sanctions with “bigger measures”. Benchmark Brent crude oil futures rose 45 cents on the day to $80.23 a barrel by 0900 GMT, while U.S. crude futures rose 31 cents to $69.43 a barrel. As of writing this article, spot Crude WTIUSD is currently trading at $69.28/b down 0.17% on the day.