Precious Metals Gains on Risk-off Sentiment Following Weekend Events

Gold has been on steady uptrend movement since the trading session began for the day and this is due to two main reasons. The first reason is Gold price hitting a 19-month low last week post which many scalpers and short-term traders have begun hoarding small amounts of Gold to be sold on right occasions while the second reason being multiple events across European market which occurred this weekend triggering demand for Gold. Some of the major events are – The latest gunshots fired at the US embassy in Ankara, The latest gunshots fired at the US embassy in Ankara putting Italy in direct conflict with EU and Sino-U.S trade-related talks scheduled to occur later this month.

With multiple Geo-political events being factored and analysts coming up with mixed-signal many of which point in bearish direction investors have turned towards precious metals. Spot Gold XAUUSD is currently trading at $1188.18 up 0.29% on the day, while US Gold futures GCcv1 is trading at $1194.90 an ounce up 0.83% on the day.

Precious Metals Trade Green As Investors Focus on Sino-U.S. Trade Talks

Meanwhile, the dollar’s advance has slowed ahead of lower-level trade talks between Chinese and U.S. officials in Washington amid reports that the world’s top two economies may meet on Aug 21 and 22 albeit remaining upbeat against major global currencies resulted in US dollar index DXY which move near flat across Asian market hours. Investors are focusing on FOMC & Sino-U.S. trade talk proceedings, precious metals are expected to see minor price swings based on various updates and outcome of trade talks. Spot silver XAGUSD has been neutral across the majority of Asian session and is currently trading at $14.187 up 0.01% on the day.

Oil prices dipped on Monday as concerns over slowing economic growth weighed on markets. The timing of the report is not ideal, coming amidst a currency crisis in Turkey, which has raised fears of financial contagion in other emerging markets. The EIA just published one of the “weakest” weekly oil reports in years, which suggests troubled waters ahead for the global oil market. The early signs of trouble to the oil market are starting to materialize.

The EIA’s weekly report showed a massive 6.8-million-barrel increase in crude oil inventories. The escalating U.S.-China trade war combined with the unfolding emerging market currency turmoil could put a serious dent in global oil demand for the rest of this year and into 2019. Oil demand in Asia is already starting to slow. The growth story is now more or less a U.S. growth story. The rest of the world isn’t playing along any longer. Spot Crude WTIUSD is currently trading at $65.97/b down 0.17% on the day.