Precious Metals Gain Momentum Over Subdued Demand For USD Amid Increased Risk Appetite Among Investors

Gold recovered on Thursday from a three-week low hit in the previous session as the recent fall in the metal prices and subdued demand for US dollar post hitting 16-month highs induced some bids. Bargain hunters are buying on the dips and the dollar being slightly off is also helping. Yesterday’s multi-month high of US Dollar combined with a return of risk appetite in equity markets had pressured the yellow metal to fall near $1211 per ounce which has resulted in buying activity as the dollar turned softer despite lack of demand for safe-haven instruments.

The bearish correction in global financial markets has waned off, but a few traders continue to remain guarded on riskier assets for the current term and have taken up current situation as an opportunity to stock up on spot gold. As of writing this article, Spot Gold XAUUSD is currently trading at $1226.48 an ounce up by 0.98% on the day, while US gold futures GCcv1 is currently trading at $1227.40 an ounce up by 1.02% on the day. Gold prices look poised to range broadly as investors balance between market uncertainties and a gradual but positive pick up in global equities.

Spot US Crude Oil Trades Bearish for 4th Consecutive Trading Session

Meanwhile, White House economic adviser Larry Kudlow said on Wednesday U.S. President Donald Trump has not “set in stone” any decisions on escalating tariffs on Chinese goods and may withdraw some duties if there are promising policy discussions with China. Any positive outcome in Sino-U.S. trade war is likely to put a dent in gold price action and could even see funds flow to change direction with funds being taken out of precious metal markets and moved to risk assets.

In the wider markets, Asian stocks rose as bruised investor sentiment got some relief from another robust Wall Street session. But market looks positive for precious metals in short-term as demand for US Greenback is likely to remain subdued across today’s European and American market hours. Spot Silver XAGUSD is currently trading at $14.471 an ounce up by 1.57% on the day. Top oil exporter Saudi Arabia is expected to cut prices for light crude grades it sells to Asia in December to track falling Middle East oil benchmarks and lower margins for gasoline and naphtha, trade sources said on Thursday.

Meanwhile, Libya has restarted three small oil fields and added around 10,000 bpd to its oil production—which has been steadily rising over the past two months—a spokesman for Libya’s National Oil Corporation (NOC) told Reuters on Wednesday. As US sanctions on Iranian Crude Oil Import is set to come into effect this weekend, the Oil market is heating up and investors look for signs and updates over Crude output increase from OPEC nations. However, oil prices fell early on Thursday, extending losses in previous sessions, amid signs of rising supply and growing concerns that demand might weaken on the prospect of a global economic slowdown. The Brent crude January futures contract lost 44 cents, or 0.32 percent, to trade at $74.72 per barrel by GMT 0054 GMT. West Texas Intermediate (WTI) crude futures fell 46 cents to $65.01 a barrel.

Both benchmarks posted their worst monthly performance since July 2016 on Wednesday, with Brent falling 8.8 percent for the month and WTI dropping 10.9 percent. As of writing this article, spot US crude WTIUSD is trading near flat at $64.81/b up 0.02% on the day, while historical data points to the fourth consecutive day of bearish price action.