Precious Metals Steady Near Recent High’s On Weak USD In Broad Market

Gold prices held steady near a five-month peak hit early on Monday, supported by a disappointing U.S. jobs report that fueled speculation that the Federal Reserve may stop raising interest rates sooner than expected. U.S. non-farm payrolls increased by 155,000 jobs last month, below economists’ median forecast of 200,000 jobs and the wage increase was softer than expected. Fed policymakers have struck a cautious tone about the economic outlook, possibly flagging a turning point in its monetary policy.

Yellow metal usually sees positive price action when rate hike expectations recede because lower rates reduce the opportunity cost of holding non-yielding bullion. Lower interest rates also tend to weigh on U.S. yields and the dollar, in which gold is priced making it highly attractive opportunity to stock up on bullion.

Weaker Dollar Helps Gold Fare Better As Safe Haven Asset

As of writing this article, spot gold XAU/USD is trading near flat at $1248.65 an ounce up by 0.01% on the day, while US gold futures GCcv1 is trading at $1253.70 up by 0.08% on the day. Also, investor sentiment has taken a dovish tone since the trading session began for the week over weekend headlines which indicated at a possible slowdown in major economies across the globe such as U.S.A, China, Japan & Europe.

Investors are also maintaining cautious tone over possibility of fall out between China & U.S in trade negotiations and Brexit parliament vote which for now looks likely to be rejected boosting demand for safe haven in broad market and given the subdued market for US Greenback, Yellow metal which is the second most preferred safe haven asset in recent times has regained its positive as instrument with high demand among safe-haven pairs.

Spot Silver XAG/USD is currently trading at $14.57 an ounce down by 0.30% on the day. Oil prices extend gain on OPEC’s output pact and Libya’s field outage. Oil prices rose on Monday, extending gains from Friday when producer club OPEC and some non-affiliated producers agreed on a supply cut of 1.2 million barrels per day (bpd) from January in defiance to US President Donald Trump’s call for the producer group to keep taps open.

Prices surged on Friday after the OPEC and some non-OPEC producers including heavyweight Russia announced they would cut oil supply by 1.2 million bpd, with an 800,000 bpd reduction planned by OPEC-members and 400,000 bpd by countries not affiliated with the group. U.S. West Texas Intermediate (WTI) crude futures were at $52.63 per barrel, up 2 cents, held back as the booming U.S. oil industry is not taking part in the announced cuts. Crude oil price action was further supported on news that Libya’s largest oil field was halted after members of the Petroleum Facilities Guard shut down pumps leading to tanks. The OPEC-led supply curbs will be made from January, measured against October 2018 output levels. Spot US Crude WTIUSD is currently trading at $52.39 per barrel up by 0.65% on the day.