Precious Metals Hit Multi Month High Owing To Increased Safe Haven DemandPrecious metals hit multi-month high and have managed to sustain rally near the said level as escalating tension surrounding Sino-U.S. Trade talks and caution ahead of event-filled week underpins demand for safe-haven assets.
Spot gold is on the path the hit 8-month highs having managed to sustain its hold over 7 month high hit in the previous session as demand for safe-haven assets continues to be underpinned by risk-averse investor sentiment in the broad market. The metal started receiving positive price action yesterday as price action turned dovish in both Forex and equity markets yesterday despite opening on a positive note with cues from US Wall Street.
Given the fact that the week ahead is filled with high-risk events that can have a major impact on market price action in short to medium term, investors turned cautious once trading activity heated up in major markets. Investors decided to book profits from recent gains and hold back from placing major bets in risk assets. This combined with weak US dollar in broad market over headlines inspired market sentiment that hinted at a possibility of US Fed deciding to terminate ongoing rate hike plans resulted in steady demand for safe-haven assets.
Crude Oil Price Rebounds Despite Steady Resistance For Sharp Upside Move
This helped gold to breach $1300 handle and get a solid above-said level during yesterday’s trading session. However, risk appetite in the broad market recovered slightly as this provides traders with plenty of short term profit options owing to the high level of volatility that can be expected over news-driven price action. Despite divided investor sentiment in the broad market, there is a high level of safe-haven demand in the broad market and this has helped gold establish a sustained rally above $1300 level for the second consecutive trading session.
As of writing this article, Spot Gold XAUUSD is trading at $1307.90 per ounce up by 0.35% on the day, while gold futures GCcv1 is trading at $1307.30 per ounce up by 0.32% on the day. Meanwhile renewed tensions surrounding Sino-U.S. trade talk which is set to begin tomorrow as U.S. Justice Department decided to go through with indictments process against Chinese telecom firm Huawei just ahead of the meeting is causing increased demand for safe-haven assets.
This factor is also expected to help support maintain yellow metals price action in the broad market. Meanwhile, silver also hit a new six month top in spot market earlier today at $15.892 per ounce and is currently trading at $15.88 per ounce up by 0.95% on the day. The long term outlook for crude oil price in the broad market continues to suffer owing to Sino-U.S. trade tension which keeps escalating with each passing day. However the price action in the broad market today is positive as most losses suffered yesterday was erased on news of US imposing sanctions on Venezuelan crude oil. The up move is still limited as the sanction is unlikely to create a major dent in global supply given record production and supply from US markets. Spot US crude oil WTIUSD is trading at $52.24 per ounce up by 0.69% on the day.