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Precious Metals Gain As Investor Sentiment Retains Cautious Tone

By:
Colin First
Published: Mar 27, 2019, 12:42 UTC

Concerns of slowdown in global economy weighs demand for crude oil leading to decline in price while at same time boosted demand for safe-haven assets resulting in Yellow metal trading in green.

Precious Metals Gain As Investor Sentiment Retains Cautious Tone

Precious metals are seeing positive price action in the global market today. The market is seeing healthy demand for safe-haven assets as investors retained a cautious tone despite bearish bias easing to some extent yesterday. Traders continue to exercise cautious stance on concerns of recession in the US & global economic slowdown as the majority of macro data updates till date hint at dovish economic activity. Further, Brexit uncertainties ahead of today’s UK parliament indicative votes also added to bearish tone in European markets as current scenario hints at a stalemate between EU & UK.

Crude Oil Declines on US API Weekly Stockpile Data

While US T.Yields may have risen above multi-month lows, the overall scenario in the global market still remains dovish. A lackluster activity in equity and forex markets, disappointing macro data updates, speech from central bank members in major global economies have created a scenario that is highly positive for precious metals from a fundamental perspective. Given the amount of caution exercised by investors in the market today, precious metals are seeing a steady inflow of fund resulting in positive price action across Asian and European market hours. As of writing this article, spot gold XAUUSD is trading at $1316.99 per ounce up by 0.10% on the day while US Gold futures GCcv1 is trading at $1316.90 per ounce up by 0.14% on the day.

Meanwhile, spot Silver XAGUSD is trading at $15.38 per ounce down by 0.27% on the day having hit an intra-day high of $15.48 per ounce earlier today. Crude oil price declined in the global market today as Pacific-Asian market hours saw the release of US API weekly crude oil stockpile data which showed a significant build. While the data served as a trigger for the decline in price action, concerns of a slowdown in the global economy which continues to limit positive price action in global equity and forex market are the main factor supporting downside price action. A slowdown in the global economy is viewed as a scenario with decreased demand for crude oil and the current supply-demand situation could turn surplus once again despite OPEC’s production and supply cut. Spot US Crude oil WTIUSD is trading at $59.56 per ounce down by 0.32% on the day.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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