Precious Metals Gain As Geo-Political Issues Inspire Risk-Off SentimentAs Gold hits $1200 handle, retail traders decided to stock up small volumes in order to make profit from recurring price cycles.
Gold prices edged higher on Tuesday as investors resorted to bargain-hunting after the precious metal fell to over one-month lows, weighed down by a stronger dollar. While a firmer greenback makes bullion expensive for holders of other currencies as the commodity is priced in dollars, it has been a while since Gold price went as low as $1200 which has resulted in some demand in physical market and short term traders who want to stock up on gold in small volumes in a bid to make profits as Gold price action has been going in circles in recent past and the trend is expected to remain intact atleast in near future as Geo-political events continue to dictate price action of precious metals and major currencies. As of writing this article, spot gold XAUUSD is currently trading at $1202.98 an ounce up by 0.20% on the day, while US Gold futures GCcv1 is trading at $1203.30 an ounce down by 0.01% on the day. While there has been significant level of buying activity, strong dollar capped gold’s upside move.
Trump Dissatisfied With Saudi Arabia’s Decision To Cut Crude Supply
The demand for safe haven is high in current market which has resulted in US Greenback growing stronger by the day. However gold has also started to gain focus of investors and with fears on multiple front because of political uncertainties in Europe, fears of a global economic slowdown and U.S.-Sino trade tensions. Investors have shunned riskier assets and preferred to stock up on other safe haven instruments such as precious metals. Spot Silver XAGUSD is currently trading at $14.07 an ounce up by 0.57% on the day. Oil prices fell by around 1% on Tuesday, with Brent crude sliding below $70 and WTI below $60 per barrel, after U.S. President Donald Trump put pressure on OPEC not to cut supply to prop up the market. The fall came amid a broad market sell off in Asia and before that on Wall Street, while the U.S.-dollar hit a 16-month high on Tuesday, making oil imports more expensive for any country using other currencies at home.
U.S. West Texas Intermediate (WTI) crude oil futures were at $59.15 per barrel at 0214 GMT, down 1.3% from their last settlement. International benchmark Brent crude oil futures were at $69.47 per barrel down 0.9%, from their last close. Both oil price benchmarks have shed more than 20% in value since early October. While top crude exporter Saudi Arabia has watched with alarm how supply is starting to outpace consumption and fearing a repeat of 2014’s price crash decided to cut supply, U.S. President Donald Trump did not like the rhetoric coming from his political ally in Saudi Arabia and tweeted “Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!” However analysts believe that following Saudi Arabia, many other OPEC members will likely cut supply in order to ease global oversupply concerns. Spot US Crude WTIUSD is currently trading at $59.27 per barrel up by 0.73% on the day