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Precious Metals Subdued Post Overnight Gains Following UK’s Political Debacle

By:
Colin First
Published: Nov 16, 2018, 09:05 UTC

Precious metals trade soft but positive as risk appetite remains high albeit relatively cautious investor sentiment while Crude oil price surges following news of OPEC supply cut.

Precious Metals Subdued Post Overnight Gains Following UK’s Political Debacle

Gold prices rose on Friday, having hit a one-week high earlier in the session, as investors sought safe-haven assets amid fears of a chaotic departure for Britain from the European Union. UK Prime Minister Theresa May’s draft Brexit plan ran into dispute after the resignation of key ministers from her government and eurosceptic lawmakers stepped up efforts to topple her, provoking fears the country could crash out of the EU without a divorce deal. Unstable UK politics and Brexit woes have invigorated a little bit of safe-haven buying in the market and the momentum in safe haven was further spurred following bearish rout in Wall Street overnight.

Optimism Surrounding Sino-U.S. Trade Talks Keep Risk Appetite Fresh In Market

While investors continue to maintain continue to maintain cautious stance, risk appetite has returned during Asian market hours over optimism surrounding Sino-U.S. trade related updates as news hit market that U.S. Trade Representative Robert Lighthizer has told some industry executives that another round of U.S. tariffs on Chinese imports has been put on hold. As of writing this article, Spot gold XAUUSD was trading at $1216.62 an ounce up by 0.62% on the day, while US gold futures GCcv1 were trading at $1217.60 an ounce up by 0.21% on the day. Precious metal prices are expected to end the week higher after declining nearly 2% last week. Gold should continue to find demand on dips, provided the U.S. dollar remains in check. Spot Silver XAGUSD is currently trading at $14.31 an ounce up by 0.15% on the day.

Oil prices rose on Friday amid expectations of supply cuts from OPEC, although record U.S. production dragged. U.S. West Texas Intermediate (WTI) crude oil futures were at $56.84 per barrel at 0353 GMT, up 0.7% from their last settlement. Brent crude oil futures were up 0.7% at $67.10 per barrel. Prices were mainly supported by expectations the Organization of the Petroleum Exporting Countries (OPEC) would start withholding supply soon, fearing a renewed rout such as in 2014 when prices crashed under the weight of oversupply. OPEC’s de-facto leader Saudi Arabia wants the cartel and its allies to cut output by about 1.4 million barrels per day (bpd), around 1.5 percent of global supply, sources told Reuters this week. Spot US Crude WTIUSD is currently trading at $57.24 per barrel up 1.24% on the day.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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