Precious Metals Gain on Increased Safe Haven Demand Amid Subdued US Dollar in Broad MarketPrecious metals trade positive on increased safe-haven demand as US Dollar failed to make sharp gains owing to bearish pressure from U.S. political woes and dovish Fed stance.
Gold has experienced a zig-zag price action over the last 24 hours as safe-haven demand fuelled both USD bulls and yellow metals price action in the broad market. Following yesterday’s disappointing Chinese GDP data investors risk appetite ebbed down and the market saw fund flow change direction towards safe-haven assets. Amid holiday thin market owing to U.S. markets closed on account of Martin Luther King, Jr celebration day and subdued USD in broad market Yellow metal saw positive price action. But headlines later in the day hinted that IMF has reduced global growth forecast for the second time in last six months and the latest forecast indicates economic activity is to hit the slowest pace in three years and this triggered a fresh strong wave of sell-off in risk assets across all major global forex and equity markets.
Crude Oil Price Declines on Global Economic Growth Worries But Macro Data Helps Limit Sharp Decline
This move triggered USD bulls in broad market to move higher resulting in Greenback moving near 2-week highs. Investors took to profit booking activity in gold as USD gained value in the broad market, but upside move in USD was capped shortly as Greenback still suffers from dovish Fed rate hike outlook and partial shutdown in US government. Gold resumed its positive price action once again as dollar’s rally was capped and safe haven demand runs high in global markets. Having erased any losses made in the previous session, Gold has managed to regain foothold and trade steady above $1280 handle in Asian market hours today. As of writing this article, spot gold XAUUSD is trading at $1283.68 per ounce up by 0.27% on the day, while US gold futures GCcv1 is trading at $1280.30 per ounce down by 0.17% on the day. Meanwhile, spot silver XAGUSD is trading at $15.31 per ounce up by 0.29% on the day.
Crude oil price in the global market went down following the IMF growth forecast update which hinted at a slowdown in global economic activity. A slowdown in economic activity and growth indirectly refers to reduced demand for Crude oil consumption and this scenario is the major driving force behind crude oil bears. However sharp downside is prevented owing to recent data which signaled that major crude oil producers have decreased production as agreed last month. Further, support was received from US macro data, despite data hinting at production still remaining near record high, data also hinted that number of oil rigs drilling for crude went down by 21 last week – its lowest in three years which signals that US market is beginning to respond to low crude oil price and economic slowdown worries helping sustain price action above $50. Spot US Crude WTIUSD is trading at $53.36 per barrel down by 1.04% on the day.