Precious Metals Gain Steadily as Safe Haven Demand Remains High on First Trading Session of 2019

Gold opens 2019 on positive note as safe haven demand boosts price to new six month highs.
Colin First
Gold daily chart, January 02, 2019

Gold’s year-end rally is pushing into 2019. Bullion advanced for a fifth straight day as equities posted fresh losses after the worst year since the financial crisis, with investors weighing more signs of slower growth across Asia and the U.S. government shutdown dragging on. Gold scaled a more than six-month peak earlier today on demand owing to concerns of global economic slowdown.  Current market scenario looks very optimistic and fundamentally supportive for gold as the overall mood is still very uncertain and the market confidence is still weak owing to geo-political woes. The dollar index which tracks the greenback against a basket of major currencies continues to hover near a two-month low hit in the previous session. A softer dollar makes the greenback denominated bullion cheaper for investors holding other currencies.

Crude Oil Continues To Decline on First Trading Session Of 2019

A boost in demand can be found whenever exchange rate is low amid global crisis, causing bullion to climb significantly. Also, Asian shares turned tail on the first trading day of the new year as more disappointing economic data from China, the world’s second-largest economy which completely eased early gains in U.S. stock futures increasing fund flow towards safe haven assets in broad market. As of writing this article, Spot Gold XAUUSD is trading at $1287.21 per ounce up by 0.54% on the day. US Gold Futures GCcv1 is trading at $1289.50 per ounce up 0.64% on the day. Meanwhile Spot Silver XAGUSD is trading at $15.47 per ounce down by 0.09% as silver failed to see increase in fund flow post profit booking activity on recent Bull Run. As uncertainty in market continues to rise owing to geo-political issues and partial shutdown in US government demand for safe haven assets will help precious metals stage solid bullish price action.

Crude oil markets dropped by around 1% in 2019’s first trading on Wednesday, pulled down by surging US output and concerns about an economic slowdown in 2019 as factory activity in China, the world’s biggest oil importer, contracted. International Brent crude futures were at $53.19 per barrel at 0544 GMT down by 1.1% from their final close of 2018. While West Texas Intermediate (WTI) futures were at $44.95 per barrel down by 1% on the day. Analysts and traders believe that futures prices fell on expectations of oversupply amid surging US production and concerns about a global economic slowdown. Factory activity weakened in December across Asia, including in China, as the Sino-US trade war and a slowdown in Chinese demand hit production in most economies, pointing to a rocky start for the world’s top economic growth region in 2019. Spot Crude WTIUSD is trading a $44.73 per barrel down by 0.60% on the day.

 

 

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